Representations and Warranties of Mego. (a) The Seller hereby represents and warrants to the Depositor, the Issuer, the Indenture Trustee, the Master Servicer and the Securityholders, that as of the Closing Date: (i) Mego is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Mego is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, "approvals") necessary for the conduct of its business as currently conducted and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Transaction Document unenforceable in any respect or would have a material adverse effect upon the Transaction; (ii) Mego has full power and authority to execute, deliver and perform, and to enter into and consummate all transactions required of it by this Agreement and each other Transaction Document to which it is a party; has duly authorized the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party; has duly executed and delivered this Agreement and each other Transaction Document to which it is a party; when duly authorized, executed and delivered by the other parties hereto, this Agreement and each other Transaction Document to which it is a party will constitute a legal, valid and binding obligation of Mego enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity); (iii) Neither the execution and delivery of this Agreement or any of the other Transaction Documents to which Mego is a party, the consummation of the transactions required of it herein or under any other Transaction Document, nor the fulfillment of or compliance with the terms and conditions of this Agreement or any of the other Transaction Documents will conflict with or result in a breach of any of the terms, conditions or provisions of Mego's charter or by-laws or any legal restriction or any material agreement or instrument to which Mego is now a party or by which it is bound, or which would adversely affect the creation and administration of the Trust as contemplated hereby, or constitute a material default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which Mego or its respective property is subject; (iv) There is no action, suit, proceeding, investigation or litigation pending against Mego or, to its knowledge, threatened, which, if determined adversely to Mego, would materially adversely affect the sale of the Loans, the issuance of the Securities and Residual Instruments, the execution, delivery or enforceability of this Agreement or any other Transaction Document, or which would have a material adverse affect on the financial condition of Mego; (v) No consent, approval, authorization or order of any court or governmental agency or body is required for: (a) the execution, delivery and performance by Mego of, or compliance by Mego with, this Agreement, (b) the issuance of the Securities and Residual Instruments, (c) the sale of the Home Loans under the Home Loan Purchase Agreement or (d) the consummation of the transactions required of it by this Agreement, except: (A) such as shall have been obtained before the Closing Date, and (B) such as may be required under state securities or "Blue Sky" laws in connection with the sale of the Securities by the Underwriter; (vi) Mego is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of Mego or its properties or might have consequences that would materially and adversely affect its performance hereunder; (vii) Mego received fair consideration and reasonably equivalent value in exchange for the sale of the Home Loans to the Depositor; (viii) Mego has transferred the Home Loans without any intent to hinder, delay or defraud any of its creditors; (b) Mego hereby agrees for the benefit of the Depositor, the Issuer, the Indenture Trustee and the Securityholders that the failure of any of the following representations and warranties to be true and correct as to any Home Loan as of the Cut-Off Date for such Home Loan, or such later date if so specified in such representation and warranty, gives rise to the remedy specified in Section 3.05; (i) The information pertaining to each Home Loan set forth in the Home Loan Schedule was true and correct in all material respects as of the applicable Cut-Off Date; (ii) As of the Cut-off Date, Home Loans representing 99.4% of the Original Pool Principal Balance are between 0 and 29 days past due and nineteen of the Home Loans representing 0.60% of the Original Pool Principal Balance are at least 30 days but no more than 59 days past due (without giving effect to any grace period); Mego has not advanced funds, induced, solicited or knowingly received any advance of funds from a party other than the Obligor, directly or indirectly, for the payment of any amount required by the Home Loan; (iii) The terms of the Debt Instrument and the related Mortgage contain the entire agreement of the parties and have not been impaired, waived, altered or modified in any respect, except by written instruments reflected in the related File and recorded, if necessary, to maintain the lien priority of the related Mortgage; and no other instrument of waiver, alteration, expansion or modification has been executed, and no Obligor has been released, in whole or in part, except in connection with an assumption agreement which assumption agreement is part of the related Home Loan File and the payment terms of which are reflected in the related Home Loan Schedule; (iv) The Debt Instrument and the related Mortgage are not subject to any set-off, claims, counterclaim or defense and will not have such in the future with respect to the goods and services provided under the Debt Instrument, including the defense of usury or of fraud in the inducement, nor will the operation of any of the terms of the Debt Instrument and the related Mortgage, or the exercise of any right thereunder, render such Debt Instrument or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto; (v) Any and all requirements of any federal, state or local law applicable to the Home Loan (including any law applicable to the origination, servicing and collection practices with respect thereto) have been complied with; (vi) No Debt Instrument or Mortgage has been satisfied, cancelled, rescinded or subordinated, in whole or part; and Mego has not waived the performance by the Obligor of any action, if the Obligor's failure to perform such action would cause the Debt Instrument or Mortgage Loan to be in default, except as otherwise permitted by clause (iii); and the related Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, subordination, release, cancellation or rescission; (vii) Each Mortgage is a valid, subsisting and enforceable lien on the related Property, including the land and all buildings on the Property; (viii) The Debt Instrument and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights in general and by general principles of equity; (ix) To Mego's best knowledge, all parties to the Debt Instrument and the related Mortgage had legal capacity at the time to enter into the Home Loan and to execute and deliver the Debt Instrument and the related Mortgage, and the Debt Instrument and the related Mortgage have been duly and properly executed by such parties; (x) As of the applicable Cut-Off Date, the proceeds of the Home Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all applicable requirements set forth in the Home Loan documents have been complied with; the Obligor is not entitled to any refund of any amounts paid or due under the Debt Instrument or the related Mortgage; (xi) Immediately prior to the sale, transfer and assignment to the Depositor, Mego will have good and indefeasible legal title to the Home Loan, the related Debt Instrument and the related Mortgage and the full right to transfer such Home Loan, the related Debt Instrument and the related Mortgage, and Mego will have been the sole owner thereof, subject to no liens, pledges, charges, mortgages, encumbrances or rights of others, except for such liens as will be released simultaneously with the transfer and assignment of the Home Loans to the Depositor (and the Home Loan File will contain no evidence inconsistent with the foregoing); and immediately upon the sale, transfer and assignment contemplated by the Home Loan Purchase Agreement, the Depositor will hold good title to, and be the sole owner of each Home Loan, the related Debt Instrument and the related Mortgage, free of all liens, pledges, charges, mortgages, encumbrances or rights of others; (xii) Except for those Home Loans referred to in Section 3.03(b)(ii) above that are delinquent as of the Closing Date, there is no default, breach, violation or event of acceleration existing under the Home Loan, the related Debt Instrument and the related Mortgage and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration and neither Mego nor its predecessors have waived any default, breach, violation or event of acceleration; (xiii) The Debt Instrument and the related Mortgage contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Property of the benefits of the security provided thereby, including, (A) in the case of any Mortgage designated as a deed of trust, by trustee's sale, and (B) otherwise by judicial foreclosure; (xiv) Each Home Loan is a fixed rate loan; the Debt Instrument shall mature within not more than 25 years, from the date of origination of the Home Loan; the Debt Instrument is payable in substantially equal Monthly Payments, with interest payable in arrears, and requires a Monthly Payment which is sufficient to fully amortize the original principal balance over the original term and to pay interest at the related Home Loan Interest Rate; interest on each Home Loan is calculated on the basis of a 360 day year consisting of twelve 30-day months, and the Debt Instrument does not provide for any extension of the original term; (xv) The related Debt Instrument is not and has not been secured by any collateral except the lien of the corresponding Mortgage; (xvi) With respect to any Mortgage Loan, if the related Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, or a valid substitution of trustee has been recorded, and no extraordinary fees or expenses are or will become payable to the trustee under the deed of trust, except in connection with default proceedings and a trustee's sale after default by the Obligor; (xvii) Mego has no knowledge of any circumstances or conditions not reflected in the representations set forth herein, or in the Home Loan Schedule, or in the related Home Loan File with respect to the related Mortgage, the related Property or the Obligor which could reasonably be expected to materially and adversely affect the value of the related Property, or the marketability of the Mortgage Loan or to cause the Mortgage Loan to become delinquent or otherwise in default; (xviii) Assuming no material change to the applicable law or regulations in effect as of the Closing Date, after the consummation of the transactions contemplated by this Agreement, the Master Servicer on behalf of the Trust and the Indenture Trustee will have the ability to foreclose or otherwise realize upon a Property, if the Home Loan is a Mortgage Loan, or to enforce the provisions of the related Home Loan against the Obligor thereunder, if the foreclosure upon any such Property or enforcement of the provisions of the related Home Loan against the Obligor are undertaken as set forth in Section 4.12; (xix) There exists a Home Loan File relating to each Home Loan and such Home Loan File contains all of the original or certified documentation listed in Section 2.05 for such Home Loan, subject to applicable grace periods set forth in Section 2.06(c). Each Indenture Trustee's Home Loan File has been delivered to the Indenture Trustee and each Servicer's Home Loan File is being held in trust by Mego for the benefit of, and as agent for, the Indenture Trustee, the Securityholders and the Owner Trustee as the owner thereof. Each document included in the Home Loan File which is required to be executed by the Obligor has been executed by the Obligor in the appropriate places. With respect to each Mortgage Loan, the related Assignment of Mortgage to the Indenture Trustee is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Property is located. All blanks on any form required to be completed have been so completed; (xx) Each Property is improved by a residential dwelling and is not a Home Loan in respect of a manufactured home or mobile home or the land on which a manufactured home or mobile home has been placed; (xxi) Each Mortgage Loan was originated by Mego in accordance with Mego's "Express 35/Swift 60 Loan Program", "Debt Consolidation 125 Loan Program", "Renovator 125 Loan Program" and "Zero Equity Loan Program" underwriting guidelines, as applicable, attached hereto as Exhibit D;
Appears in 2 contracts
Samples: Sale and Servicing Agreement (Mego Mortgage Corp), Sale and Servicing Agreement (Mego Financial Corp)
Representations and Warranties of Mego. (a) The Seller hereby represents and warrants to the Depositor, the Issuer, the Indenture Trustee, the Master Servicer Servicer, the Securities Insurer and the Securityholders, that as of the Closing Date:
(i) Mego is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Mego is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, "approvals") necessary for the conduct of its business as currently conducted and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Transaction Document unenforceable in any respect or would have a material adverse effect upon the Transaction;
(ii) Mego has full power and authority to execute, deliver and perform, and to enter into and consummate all transactions required of it by this Agreement and each other Transaction Document to which it is a party; has duly authorized the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party; has duly executed and delivered this Agreement and each other Transaction Document to which it is a party; when duly authorized, executed and 40 45 delivered by the other parties hereto, this Agreement and each other Transaction Document to which it is a party will constitute a legal, valid and binding obligation of Mego enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);
(iii) Neither the execution and delivery of this Agreement or any of the other Transaction Documents to which Mego is a party, the consummation of the transactions required of it herein or under any other Transaction Document, nor the fulfillment of or compliance with the terms and conditions of this Agreement or any of the other Transaction Documents will conflict with or result in a breach of any of the terms, conditions or provisions of Mego's charter or by-laws or any legal restriction or any material agreement or instrument to which Mego is now a party or by which it is bound, or which would adversely affect the creation and administration of the Trust as contemplated hereby, or constitute a material default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which Mego or its respective property is subject;
(iv) There is no action, suit, proceeding, investigation or litigation pending against Mego or, to its knowledge, threatened, which, if determined adversely to Mego, would materially adversely affect the sale of the Loans, the issuance of the Securities and Residual InstrumentsCertificates, the execution, delivery or enforceability of this Agreement or any other Transaction Document, or which would have a material adverse affect on the financial condition of Mego;
(v) No consent, approval, authorization or order of any court or governmental agency or body is required for: (a) the execution, delivery and performance by Mego of, or compliance by Mego with, this Agreement, (b) the transfer of all FHA insurance reserves relating to the FHA Loans to the Contract of Insurance Holder, (c) the issuance of the Securities and Residual InstrumentsCertificates, (cd) the sale of the Home Loans under the Home Loan Purchase Agreement or (de) the consummation of the transactions required of it by this Agreement, except: (A) such as shall have been obtained before the Closing Date, (B) the transfer of the FHA insurance reserves by the FHA to the Contract of Insurance Holder with respect to the FHA Loans as to which an FHA case number has not been assigned as of the Closing Date, and (BC) such as may be required under state securities or "Blue Sky" laws in connection with the sale of the Securities Notes by the Underwriter;
(vi) Mego is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of Mego or its properties or might have consequences that would materially and adversely affect its performance hereunder;
(vii) Mego received fair consideration and reasonably equivalent value in exchange for the sale of the Home Loans to the Depositor;
(viii) HUD has approved in writing the transfer to the Contract of Insurance Holder of the FHA Reserve Amount relating to each FHA Loan and all actions have been taken by Mego (other than the filing of the Transfer of Note Report Form 27030 with HUD) and all required consents have been obtained (other than approval upon HUD's receipt of such Transfer of Note Report), in either case, necessary to effect transfer to the Contract of Insurance Holder of the FHA Reserve Amount relating to each FHA Loan (except for FHA Loans with respect to which a case number has not been assigned as of the Closing Date). The FHA Reserve Amounts with respect to the FHA Loans transferred to the Contract of Insurance Holder both prior to and following the transfer of the FHA Loans to the Co-Owner Trustee and Owner Trustee will be available to satisfy claims with respect to such FHA Loans. As of the Cut-off Date, the amount in the FHA Insurance Coverage Reserve Account, together with all amounts to be requested for transfer with respect to the FHA Loans, will equal $19,440,100 less approximately $4,252,273 representing claims paid, filed or pending filing as of the Cutoff Date against the Contract of Insurance. The amount to be requested for transfer with respect to the FHA Loans is $273,578, which is the sum of approximately 10% of the aggregate of the Principal Balances of the FHA Loans as of the Cut-Off Date;
(ix) Mego is a non-supervised lender in good standing with HUD under 24 CFR Section202.5 and is authorized to originate, purchase, hold, service and/or sell loans insured under 24 CFR Part 201 pursuant to a valid contract of insurance, Number 70497-00003;
(x) Mego has transferred the Home Loans without any intent to hinder, delay or defraud any of its creditors;
(b) Mego hereby agrees for the benefit of the Depositor, the Issuer, the Indenture Trustee Trustee, the Securities Insurer and the Securityholders that the failure of any of the following representations and warranties to be true and correct as to any Home Loan (and the related Debt Instrument and Mortgage, if applicable) as of the Cut-Off Date for such Home Loan, or such later date if so specified in such representation and warranty, gives rise to the remedy specified in Section 3.05;
(i) The information pertaining to each Home Loan set forth in the Home Loan Schedule was true and correct in all material respects as of the applicable Cut-Off Date;
(ii) As of the Cut-off Date, Home Loans representing 99.4Closing Date at least 99.44% of the Original Home Loans (by aggregate Initial Pool Principal Balance Balance) are between 0 and 29 30 days past due and nineteen not more than 0.56% of the Home Loans representing 0.60% of the Original Pool (by aggregate Initial Principal Balance Balance) are at least 30 days but no more than 59 between 31 and 60 days past due (without giving effect to any grace period); Mego has not advanced funds, induced, solicited or knowingly received any advance of funds from a party other than the Obligor, directly or indirectly, for the payment of any amount required by the Home Loan;
(iii) The terms of the Debt Instrument and the related Mortgage contain the entire agreement of the parties and have not been impaired, waived, altered or modified in any respect, except by written instruments reflected in the related File and recorded, if necessary, to maintain the lien priority of the related Mortgage; and no other instrument of waiver, alteration, expansion or modification has been executed, and no Obligor has been released, in whole or in part, except in connection with an assumption agreement which assumption agreement is part of the related Home Loan File and the payment terms of which are reflected in the related Home Loan Schedule;
(iv) The Debt Instrument and the related Mortgage are not subject to any set-off, claims, counterclaim or defense and will not have such in the future with respect to the goods and services provided under the Debt Instrument, including the defense of usury or of fraud in the inducement, nor will the operation of any of the terms of the Debt Instrument and the related Mortgage, or the exercise of any right thereunder, render such Debt Instrument or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto;
(v) Any and all requirements of any federal, state or local law applicable to the Home Loan (including any law applicable to the origination, servicing and collection practices with respect thereto) have been complied with;
(vi) No Debt Instrument or Mortgage has been satisfied, cancelled, rescinded or subordinated, in whole or part; and Mego has not waived the performance by the Obligor of any action, if the Obligor's failure to perform such action would cause the Debt Instrument or Mortgage Loan to be in default, except as otherwise permitted by clause (iii); and the related Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, subordination, release, cancellation or rescission;
(vii) Each Mortgage is a valid, subsisting and enforceable lien on the related Property, including the land and all buildings on the Property;
(viii) The Debt Instrument and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights in general and by general principles of equity;
(ix) To Mego's best knowledge, all parties to the Debt Instrument and the related Mortgage had legal capacity at the time to enter into the Home Loan and to execute and deliver the Debt Instrument and the related Mortgage, and the Debt Instrument and the related Mortgage have been duly and properly executed by such parties;
(x) As of the applicable Cut-Off Date, the proceeds of the Home Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all applicable requirements set forth in the Home Loan documents have been complied with; the Obligor is not entitled to any refund of any amounts paid or due under the Debt Instrument or the related Mortgage;
(xi) Immediately prior to the sale, transfer and assignment to the Depositor, Mego will have good and indefeasible legal title to the Home Loan, the related Debt Instrument and the related Mortgage and the full right to transfer such Home Loan, the related Debt Instrument and the related Mortgage, and Mego will have been the sole owner thereof, subject to no liens, pledges, charges, mortgages, encumbrances or rights of others, except for such liens as will be released simultaneously with the transfer and assignment of the Home Loans to the Depositor (and the Home Loan File will contain no evidence inconsistent with the foregoing); and immediately upon the sale, transfer and assignment contemplated by the Home Loan Purchase Agreement, the Depositor will hold good title to, and be the sole owner of each Home Loan, the related Debt Instrument and the related Mortgage, free of all liens, pledges, charges, mortgages, encumbrances or rights of others;
(xii) Except for those Home Loans referred to in Section 3.03(b)(ii) above that are delinquent as of the Closing Date, there is no default, breach, violation or event of acceleration existing under the Home Loan, the related Debt Instrument and the related Mortgage and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration and neither Mego nor its predecessors have waived any default, breach, violation or event of acceleration;
(xiii) The Debt Instrument and the related Mortgage contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Property of the benefits of the security provided thereby, including, (A) in the case of any Mortgage designated as a deed of trust, by trustee's sale, and (B) otherwise by judicial foreclosure;
(xiv) Each Home Loan is a fixed rate loan; the Debt Instrument shall mature within not more than 25 years, from the date of origination of the Home Loan; the Debt Instrument is payable in substantially equal Monthly Payments, with interest payable in arrears, and requires a Monthly Payment which is sufficient to fully amortize the original principal balance over the original term and to pay interest at the related Home Loan Interest Rate; interest on each Home Loan is calculated on the basis of a 360 day year consisting of twelve 30-day months, and the Debt Instrument does not provide for any extension of the original term;
(xv) The related Debt Instrument is not and has not been secured by any collateral except the lien of the corresponding Mortgage;
(xvi) With respect to any Mortgage Loan, if the related Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, or a valid substitution of trustee has been recorded, and no extraordinary fees or expenses are or will become payable to the trustee under the deed of trust, except in connection with default proceedings and a trustee's sale after default by the Obligor;
(xvii) Mego has no knowledge of any circumstances or conditions not reflected in the representations set forth herein, or in the Home Loan Schedule, or in the related Home Loan File with respect to the related Mortgage, the related Property or the Obligor which could reasonably be expected to materially and adversely affect the value of the related Property, or the marketability of the Mortgage Loan or to cause the Mortgage Loan to become delinquent or otherwise in default;
(xviii) Assuming no material change to the applicable law or regulations in effect as of the Closing Date, after the consummation of the transactions contemplated by this Agreement, the Master Servicer on behalf of the Trust and the Indenture Trustee will have the ability to foreclose or otherwise realize upon a Property, if the Home Loan is a Mortgage Loan, or to enforce the provisions of the related Home Loan against the Obligor thereunder, if the foreclosure upon any such Property or enforcement of the provisions of the related Home Loan against the Obligor are undertaken as set forth in Section 4.12;
(xix) There exists a Home Loan File relating to each Home Loan and such Home Loan File contains all of the original or certified documentation listed in Section 2.05 for such Home Loan, subject to applicable grace periods set forth in Section 2.06(c). Each Indenture Trustee's Home Loan File has been delivered to the Indenture Trustee and each Servicer's Home Loan File is being held in trust by Mego for the benefit of, and as agent for, the Indenture Trustee, the Securityholders and the Owner Trustee as the owner thereof. Each document included in the Home Loan File which is required to be executed by the Obligor has been executed by the Obligor in the appropriate places. With respect to each Mortgage Loan, the related Assignment of Mortgage to the Indenture Trustee is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Property is located. All blanks on any form required to be completed have been so completed;
(xx) Each Property is improved by a residential dwelling and is not a Home Loan in respect of a manufactured home or mobile home or the land on which a manufactured home or mobile home has been placed;
(xxi) Each Mortgage Loan was originated by Mego in accordance with Mego's "Express 35/Swift 60 Loan Program", "Debt Consolidation 125 Loan Program", "Renovator 125 Loan Program" and "Zero Equity Loan Program" underwriting guidelines, as applicable, attached hereto as Exhibit D;a
Appears in 2 contracts
Samples: Sale and Servicing Agreement (Mego Financial Corp), Sale and Servicing Agreement (Mego Mortgage Corp)
Representations and Warranties of Mego. (a) The Seller hereby represents and warrants to the Depositor, the Issuer, the Indenture Trustee, the Master Servicer and the Securityholders, that as of the Closing Date:
(i) Mego is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Mego is duly qualified to do business, is in good standing and has obtained all necessary licenses, permits, charters, registrations and approvals (together, "approvals") necessary for the conduct of its business as currently conducted and the performance of its obligations under the Transaction Documents, in each jurisdiction in which the failure to be so qualified or to obtain such approvals would render any Transaction Document unenforceable in any respect or would have a material adverse effect upon the Transaction;
(ii) Mego has full power and authority to execute, deliver and perform, and to enter into and consummate all transactions required of it by this Agreement and each other Transaction Document to which it is a party; has duly authorized the execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party; has duly executed and delivered this Agreement and each other Transaction Document to which it is a party; when duly authorized, executed and delivered by the other parties hereto, this Agreement and each other Transaction Document to which it is a party will constitute a legal, valid and binding obligation of Mego enforceable against it in accordance with its terms, except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);
(iii) Neither the execution and delivery of this Agreement or any of the other Transaction Documents to which Mego is a party, the consummation of the transactions required of it herein or under any other Transaction Document, nor the fulfillment of or compliance with the terms and conditions of this Agreement or any of the other Transaction Documents will conflict with or result in a breach of any of the terms, conditions or provisions of Mego's charter or by-laws or any legal restriction or any material agreement or instrument to which Mego is now a party or by which it is bound, or which would adversely affect the creation and administration of the Trust as contemplated hereby, or constitute a material default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which Mego or its respective property is subject;
(iv) There is no action, suit, proceeding, investigation or litigation pending against Mego or, to its knowledge, threatened, which, if determined adversely to Mego, would materially adversely affect the sale of the Loans, the issuance of the Securities and Residual Instruments, the execution, delivery or enforceability of this Agreement or any other Transaction Document, or which would have a material adverse affect on the financial condition of Mego;
(v) No consent, approval, authorization or order of any court or governmental agency or body is required for: (a) the execution, delivery and performance by Mego of, or compliance by Mego with, this Agreement, (b) the issuance of the Securities and Residual Instruments, (c) the sale of the Home Loans under the Home Loan Purchase Agreement or (d) the consummation of the transactions required of it by this Agreement, except: (A) such as shall have been obtained before the Closing Date, and (B) such as may be required under state securities or "Blue Sky" laws in connection with the sale of the Securities by the Underwriter;
(vi) Mego is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of Mego or its properties or might have consequences that would materially and adversely affect its performance hereunder;
(vii) Mego received fair consideration and reasonably equivalent value in exchange for the sale of the Home Loans to the Depositor;
(viii) Mego has transferred the Home Loans without any intent to hinder, delay or defraud any of its creditors;
(b) Mego hereby agrees for the benefit of the Depositor, the Issuer, the Indenture Trustee and the Securityholders that the failure of any of the following representations and warranties to be true and correct as to any Home Loan as of the Cut-Off Date for such Home Loan, or such later date if so specified in such representation and warranty, gives rise to the remedy specified in Section 3.05;
(i) The information pertaining to each Home Loan set forth in the Home Loan Schedule was true and correct in all material respects as of the applicable Cut-Off Date;
(ii) As of the Cut-off Date, all the Home Loans representing 99.4% of the Original Pool Principal Balance are between 0 and 29 days past due and nineteen of the Home Loans representing 0.60% of the Original Pool Principal Balance are at least 30 days but no more than 59 days past due (without giving effect to any grace period)due; Mego has not advanced funds, induced, solicited or knowingly received any advance of funds from a party other than the Obligor, directly or indirectly, for the payment of any amount required by the Home Loan;
(iii) The terms of the Debt Instrument and the related Mortgage contain the entire agreement of the parties and have not been impaired, waived, altered or modified in any respect, except by written instruments reflected in the related Home Loan File and recorded, if necessary, to maintain the lien priority of the related Mortgage; and no other instrument of waiver, alteration, expansion or modification has been executed, and no Obligor has been released, in whole or in part, except in connection with an assumption agreement which assumption agreement is part of the related Home Loan File and the payment terms of which are reflected in the related Home Loan Schedule;
(iv) The Debt Instrument and the related Mortgage are not subject to any set-off, claims, counterclaim or defense and will not have such in the future with respect to the goods and services provided under the Debt Instrument, including the defense of usury or of fraud in the inducement, nor will the operation of any of the terms of the Debt Instrument and the related Mortgage, or the exercise of any right thereunder, render such Debt Instrument or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto;
(v) Any and all requirements of any federal, state or local law applicable to the Home Loan (including any law applicable to the origination, servicing and collection practices with respect thereto) have been complied with;
(vi) No Debt Instrument or Mortgage has been satisfied, cancelled, rescinded or subordinated, in whole or part; and Mego has not waived the performance by the Obligor of any action, if the Obligor's failure to perform such action would cause the Debt Instrument or Mortgage Loan to be in default, except as otherwise permitted by clause (iii); and the related Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, subordination, release, cancellation or rescission;
(vii) Each Mortgage is a valid, subsisting and enforceable lien on the related Property, including the land and all buildings on the Property;
(viii) The Debt Instrument and the related Mortgage are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights in general and by general principles of equity;
(ix) To Mego's best knowledge, all parties to the Debt Instrument and the related Mortgage had legal capacity at the time to enter into the Home Loan and to execute and deliver the Debt Instrument and the related Mortgage, and the Debt Instrument and the related Mortgage have been duly and properly executed by such parties;
(x) As of the applicable Cut-Off Date, the proceeds of the Home Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all applicable requirements set forth in the Home Loan documents have been complied with; the Obligor is not entitled to any refund of any amounts paid or due under the Debt Instrument or the related Mortgage;
(xi) Immediately prior to the sale, transfer and assignment to the Depositor, Mego will have good and indefeasible legal title to the Home Loan, the related Debt Instrument and the related Mortgage and the full right to transfer such Home Loan, the related Debt Instrument and the related Mortgage, and Mego will have been the sole owner thereof, subject to no liens, pledges, charges, mortgages, encumbrances or rights of others, except for such liens as will be released simultaneously with the transfer and assignment of the Home Loans to the Depositor (and the Home Loan File will contain no evidence inconsistent with the foregoing); and immediately upon the sale, transfer and assignment contemplated by the Home Loan Purchase Agreement, the Depositor will hold good title to, and be the sole owner of each Home Loan, the related Debt Instrument and the related Mortgage, free of all liens, pledges, charges, mortgages, encumbrances or rights of others;
(xii) Except for those Home Loans referred to in Section 3.03(b)(ii) above that are delinquent as of the Closing Date, there is no default, breach, violation or event of acceleration existing under the Home Loan, the related Debt Instrument and the related Mortgage and there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration and neither Mego nor its predecessors have waived any default, breach, violation or event of acceleration;
(xiii) The Debt Instrument and the related Mortgage contain customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Property of the benefits of the security provided thereby, including, (A) in the case of any Mortgage designated as a deed of trust, by trustee's sale, and (B) otherwise by judicial foreclosure;
(xiv) Each Home Loan is a fixed rate loan; the Debt Instrument shall mature within not more than 25 years, from the date of origination of the Home Loan; the Debt Instrument is payable in substantially equal Monthly Payments, with interest payable in arrears, and requires a Monthly Payment which is sufficient to fully amortize the original principal balance over the original term and to pay interest at the related Home Loan Interest Rate; interest on each Home Loan is calculated on the basis of a 360 day year consisting of twelve 30-day months, and the Debt Instrument does not provide for any extension of the original term;
(xv) The related Debt Instrument is not and has not been secured by any collateral except the lien of the corresponding Mortgage;
(xvi) With respect to any Mortgage Loan, if the related Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, or a valid substitution of trustee has been recorded, and no extraordinary fees or expenses are or will become payable to the trustee under the deed of trust, except in connection with default proceedings and a trustee's sale after default by the Obligor;
(xvii) Mego has no knowledge of any circumstances or conditions not reflected in the representations set forth herein, or in the Home Loan Schedule, or in the related Home Loan File with respect to the related Mortgage, the related Property or the Obligor which could reasonably be expected to materially and adversely affect the value of the related Property, or the marketability of the Mortgage Loan or to cause the Mortgage Loan to become delinquent or otherwise in default;
(xviii) Assuming no material change to the applicable law or regulations in effect as of the Closing Date, after the consummation of the transactions contemplated by this Agreement, the Master Servicer on behalf of the Trust and the Indenture Trustee will have the ability to foreclose or otherwise realize upon a Property, if the Home Loan is a Mortgage Loan, or to enforce the provisions of the related Home Loan against the Obligor thereunder, if the foreclosure upon any such Property or enforcement of the provisions of the related Home Loan against the Obligor are undertaken as set forth in Section 4.12;
(xix) There exists a Home Loan File relating to each Home Loan and such Home Loan File contains all of the original or certified documentation listed in Section 2.05 for such Home Loan, subject to applicable grace periods set forth in Section 2.06(c). Each Indenture Trustee's Home Loan File has been delivered to the Indenture Trustee and each Servicer's Home Loan File is being held in trust by Mego for the benefit of, and as agent for, the Indenture Trustee, the Securityholders and the Owner Trustee as the owner thereof. Each document included in the Home Loan File which is required to be executed by the Obligor has been executed by the Obligor in the appropriate places. With respect to each Mortgage Loan, the related Assignment of Mortgage to the Indenture Trustee is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Property is located. All blanks on any form required to be completed have been so completed;
(xx) Each Property is improved by a residential dwelling and is not a Home Loan in respect of a manufactured home or mobile home or the land on which a manufactured home or mobile home has been placed;
(xxi) Each Mortgage Loan was originated by Mego in accordance with Mego's "Express 35/Swift 60 Loan Program", "Debt Consolidation 125 Loan Program", "Renovator 125 Loan Program" and "Zero Equity Loan Program" underwriting guidelines, as applicable, attached hereto as Exhibit D;
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