Resolution of Defaulted Mortgage Loans and REO Properties. (a) Promptly upon a Mortgage Loan becoming a Defaulted Mortgage Loan and if the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) to attempt to sell such Defaulted Mortgage Loan, the Special Servicer shall use reasonable efforts to solicit offers for such Defaulted Mortgage Loan on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. Subject to the provisions of this Section 3.18, the Special Servicer shall accept the first (and, if multiple offers are contemporaneously received, the highest) cash offer received from any Person that constitutes a fair price for such Defaulted Mortgage Loan.] (b) The Special Servicer shall give the Trustee, the 17g-5 Information Provider, the Majority Certificateholder of the Controlling Class and the Master Servicer not less than five (5) Business Days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person shall be obligated to submit an offer to purchase any Defaulted Mortgage Loan, and notwithstanding anything to the contrary contained herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any Defaulted Mortgage Loan pursuant hereto. (c) Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan for purposes of this Section 3.18 shall be determined by the Special Servicer, if the highest offeror is a Person other than an Interested Person, or by the Trustee, if the highest offeror is an Interested Person; provided, however, that, no offer from an Interested Person shall constitute a fair price unless (i) it is the highest offer received and (ii) at least two (2) other offers are received from independent third parties. In all cases under this Section 3.18, in determining whether any offer received from an Interested Person represents a fair price for any Defaulted Mortgage Loan, the Trustee shall be supplied with and shall rely on the most recent Appraisal or updated Appraisal conducted in accordance with this Agreement within the preceding nine month period or, in the absence of any such Appraisal, on a new Appraisal. The appraiser conducting any such new appraisal shall be an Appraiser selected by the Special Servicer if no Interested Person is making an offer with respect to a Defaulted Mortgage Loan and selected by the Trustee if an Interested Person is so making an offer. The cost of any such narrative appraisal shall be covered by, and shall be reimbursable as, a Servicing Advance. Where any Interested Person is among those making an offer with respect to a Defaulted Mortgage Loan, the Special Servicer shall require that all offers be submitted to the Trustee in writing and (x) if there is only one bidder, be accompanied by a refundable cash deposit in an amount equal to 5% of the offered amount and (y) if there is more than one bidder, be accompanied by a refundable cash deposit in an amount equal to 5% of the offered amount from the highest bidder. In determining whether any such offer from a Person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the Special Servicer shall take into account (in addition to the results of any Appraisal, updated Appraisal or narrative appraisal that it may have obtained pursuant to this Agreement within the prior nine months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser shall be instructed to take into account, as applicable, among other factors, the period and amount of any delinquency on the Defaulted Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy. The Purchase Price for any Defaulted Mortgage Loan shall in all cases be deemed a fair price. (d) Subject to the other subsections of this Section 3.18, the Special Servicer shall act on behalf of the Trust in negotiating and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage Loan, and the collection of all amounts payable in connection therewith. In connection therewith, the Special Servicer may charge prospective offerors, and may retain, fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or exchanging offers without obligation to deposit such amounts into the Collection Account. Any sale of any Defaulted Mortgage Loan shall be for cash. Any sale of any Defaulted Mortgage Loan shall be final and without recourse to the Trustee or the Trust (except such recourse to the Trust imposed by those representations and warranties typically given in such transactions and any customary closing matters), and if such sale is consummated in accordance with the terms of this Agreement, none of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee. (e) Subject to the rights of a holder of any related B Note, Serviced Companion Loan or mezzanine loan, under the respective Intercreditor Agreement or mezzanine loan intercreditor agreement, as applicable, to purchase a Mortgage Loan, unless and until a Defaulted Mortgage Loan is sold pursuant to this Section 3.18, the Special Servicer shall continue to service and administer such Mortgage Loan in accordance with the Servicing Standard and this Agreement and shall pursue such other resolutions or recovery strategies including workout, foreclosure or sale of such Mortgage Loan, as is consistent with this Agreement and the Servicing Standard. (f) The purchase price for any Defaulted Mortgage Loan purchased under this Section 3.18 shall be remitted to the Master Servicer for deposit into the Collection Account, and the Trustee or a Custodian on its behalf, upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, shall release or cause to be released to the purchaser of the Defaulted Mortgage Loan the related Mortgage File, and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in such purchaser ownership of such Mortgage Loan. In connection with any such purchase, the Special Servicer and the Master Servicer shall deliver the related Servicer Mortgage File (to the extent either has possession of such file) to such purchaser. (g) Notwithstanding any of the foregoing paragraphs of this Section 3.18 the Special Servicer shall not be obligated to accept the highest cash offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and the Special Servicer may accept a lower cash offer (from any Person other than itself or an Affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (for example, if the prospective buyer making the lower offer is more likely to perform its obligations or the terms offered by the prospective buyer making the lower offer are more favorable). (h) Notwithstanding anything to the contrary herein, any purchase of a Defaulted Mortgage Loan pursuant to this Section 3.18 will remain subject to the cure and purchase rights of any holder of a related mezzanine loan as set forth in the related mezzanine loan intercreditor agreement. The Special Servicer shall determine the price to be paid in accordance with the terms of the related mezzanine loan intercreditor agreement in connection with any such purchase rights in favor of the holder of the related mezzanine loan and shall provide such notices to the holder of the related mezzanine loan as is required by the related mezzanine loan intercreditor agreement in connection with such holders’ purchase rights. (i) The Special Servicer shall sell a REO Property in the manner set forth in Section 3.16(a). The Special Servicer may purchase any such REO Property (at the Purchase Price therefor). The Special Servicer may also offer to sell to any Person any REO Property, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best economic interests of the Trust Fund. The Special Servicer shall give the Trustee, the Master Servicer and the Directing Certificateholder, not less than [___] days’ prior written notice of its intention to sell any such REO Property, in which case the Special Servicer shall accept the highest offer received from any Person for any such REO Property in an amount at least equal to the Purchase Price therefor. To the extent permitted by applicable law, and subject to the Servicing Standard, the Master Servicer, an Affiliate of the Master Servicer, the Special Servicer or an Affiliate of the Special Servicer, or an employee of any of them may act as broker in connection with the sale of any such REO Property and may retain from the proceeds of such sale a brokerage commission that does not exceed the commission that would have been earned by an independent broker pursuant to a brokerage agreement entered into at arm’s length. In the absence of any such offer, the Special Servicer shall accept the highest offer received from any Person that is determined by the Special Servicer to be a fair price for such REO Property, if the highest offeror is a Person other than the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates, or if such price is determined to be such a price by the Trustee, if the highest offeror is the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any such REO Property pursuant hereto. The Special Servicer shall not be obligated by either of the foregoing paragraphs or otherwise to accept the highest offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders. In addition, the Special Servicer may accept a lower offer if it determines, in accordance with the Servicing Standard that acceptance of such offer would be in the best interests of the Certificateholders (for example, if the prospective buyer making the lower offer is more likely to perform its obligations, or the terms offered by the prospective buyer making the lower offer are more favorable). In determining whether any offer received from the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates represents a fair price for any such REO Property, the Trustee shall obtain and may conclusively rely on an Appraisal from a Qualified Appraiser, at the expense of the Trust Fund. In determining whether any offer constitutes a fair price for any such REO Property, the Trustee (or, if applicable, such Qualified Appraiser) shall take into account, and any appraiser shall be instructed to take into account, as applicable, among other factors, the physical condition of such REO Property, the state of the local economy and the Trust Fund’s obligation to comply with REMIC Provisions. Subject to the Servicing Standard and the REMIC Provisions, the Special Servicer shall act on behalf of the Trust Fund in negotiating and taking any other action necessary or appropriate in connection with the sale of any such REO Property, including the collection of all amounts payable in connection therewith. A sale of any such REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, any Servicer, or the Trust Fund (except that any contract of sale and assignment and conveyance documents may contain customary representations and warranties of title, condition and authority so long as the only recourse for breach thereof is to the Trust Fund) and, if consummated in accordance with the terms of this Agreement, none of the Master Servicer, the Special Servicer, the Depositor nor the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
Appears in 2 contracts
Samples: Pooling and Servicing Agreement (Banc of America Merrill Lynch Commercial Mortgage Inc.), Pooling and Servicing Agreement (Banc of America Merrill Lynch Commercial Mortgage Inc.)
Resolution of Defaulted Mortgage Loans and REO Properties. (a) Promptly upon a Mortgage Loan becoming a Defaulted Mortgage Loan and if the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) to attempt to sell such Defaulted Mortgage LoanThe Master Servicer, the Special Servicer shall use reasonable efforts to solicit offers for such Defaulted or the Trustee may sell or purchase, or permit the sale or purchase of, a Mortgage Loan or an REO Property only on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. Subject terms and subject to the provisions of conditions set forth in this Section 3.18, the Special Servicer shall accept the first (and, if multiple offers are contemporaneously received, the highest3.18 or as otherwise expressly provided in or contemplated by Sections 2.03(a) cash offer received from any Person that constitutes a fair price for such Defaulted Mortgage Loanand 9.01.]
(b) The Special Servicer shall give the Trustee, the 17g-5 Information Provider, the Majority Certificateholder of the Controlling Class and the Master Servicer not less than five (5) Business Days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person shall be obligated to submit an offer to purchase any Defaulted Mortgage Loan, and notwithstanding anything to the contrary contained herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any Defaulted After a Mortgage Loan pursuant hereto.
(c) Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan for purposes of this Section 3.18 shall be determined by the Special Servicer, if the highest offeror is a Person other than an Interested Person, or by the Trustee, if the highest offeror is an Interested Person; provided, however, that, no offer from an Interested Person shall constitute a fair price unless (i) it is the highest offer received and (ii) at least two (2) other offers are received from independent third parties. In all cases under this Section 3.18, in determining whether any offer received from an Interested Person represents a fair price for any Defaulted Mortgage Loan, the Trustee shall be supplied with and shall rely on the most recent Appraisal or updated Appraisal conducted in accordance with this Agreement within the preceding nine month period or, in the absence of any such Appraisal, on a new Appraisal. The appraiser conducting any such new appraisal shall be an Appraiser selected by the Special Servicer if no Interested Person is making an offer with respect to a Defaulted Mortgage Loan and selected by the Trustee if an Interested Person is so making an offer. The cost of any such narrative appraisal shall be covered by, and shall be reimbursable as, a Servicing Advance. Where any Interested Person is among those making an offer with respect to becomes a Defaulted Mortgage Loan, the Special Servicer shall require determine the fair value of the Mortgage Loan in accordance with the Servicing Standard; provided, however, that all offers such determination shall be submitted made without taking into account any effect the restrictions on the sale of such Mortgage Loan contained herein may have on the value of such Defaulted Mortgage Loan; provided, further, that the Special Servicer shall use reasonable efforts promptly to obtain an Appraisal with respect to the Trustee related Mortgage Property unless it has an Appraisal that is less than 12 months old and has no actual knowledge of, or notice of, any event which in writing the Special Servicer's judgment would materially affect the validity of such Appraisal. The Special Servicer shall make its fair value determination as soon as reasonably practicable (but in any event within thirty (30) days) after its receipt of such new Appraisal, if applicable. The Special Servicer will be permitted, from time to time, to adjust its fair value determination based upon changed circumstances, new information and (x) if there is only one bidderother relevant factors, be accompanied by in each instance in accordance with the Servicing Standard; provided, however, that the Special Servicer shall update its fair value determination at least once every 90 days; provided further that absent the Special Servicer having actual knowledge of a refundable cash deposit material change in an amount equal to 5% circumstances affecting the value of the offered amount related Mortgaged Property, the Special Servicer shall not be obligated to update such determination. The Special Servicer shall notify the Trustee, the Master Servicer, each Rating Agency and (y) if there is more than one bidder, be accompanied by a refundable cash deposit in an amount equal the Majority Subordinate Certificateholder promptly upon its fair value determination and any adjustment thereto. The Special Servicer shall also deliver to 5% the Master Servicer and the Majority Subordinate Certificateholder the most recent Appraisal of the offered amount from related Mortgaged Property then in the highest bidderSpecial Servicer's possession, together with such other third-party reports and other information then in the Special Servicer's possession that the Special Servicer reasonably believes to be relevant to the fair value determination with respect to such Mortgage Loan (such materials are, collectively, the "Determination Information"). Notwithstanding the foregoing, the Special Servicer shall not be required to deliver the Determination Information to the Master Servicer, and shall instead deliver the Determination Information to the Trustee, if the Master Servicer will not be determining whether the Option Price represents fair value for the Defaulted Mortgage Loan, pursuant to this Section 3.18. In determining whether the fair value of any such offer from a Person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the Special Servicer shall take into account (in addition to the results of any Appraisal, updated Appraisal or narrative appraisal that it may have obtained pursuant to this Agreement within the prior nine months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser shall be instructed to take into account, as applicable, among other factors, the period and amount of any the delinquency on the Defaulted such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy. The Purchase Price for any Defaulted Mortgage Loan shall in all cases be deemed a fair price.
(d) Subject to the other subsections of this Section 3.18, the Special Servicer shall act on behalf of the Trust in negotiating and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage Loan, and the collection of all amounts payable in connection therewith. In connection therewith, the Special Servicer may charge prospective offerors, and may retain, fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or exchanging offers without obligation to deposit such amounts into the Collection Account. Any sale of any Defaulted Mortgage Loan shall be for cash. Any sale of any Defaulted Mortgage Loan shall be final and without recourse to the Trustee or the Trust (except such recourse to the Trust imposed by those representations and warranties typically given in such transactions and any customary closing matters), and if such sale is consummated in accordance with the terms of this Agreement, none of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
(e) Subject to the rights of a holder of any related B Note, Serviced Companion Loan or mezzanine loan, under the respective Intercreditor Agreement or mezzanine loan intercreditor agreement, as applicable, to purchase a Mortgage Loan, unless and until a Defaulted Mortgage Loan is sold pursuant to this Section 3.18, the Special Servicer shall continue to service and administer such Mortgage Loan in accordance with the Servicing Standard and this Agreement and shall pursue such other resolutions or recovery strategies including workout, foreclosure or sale of such Mortgage Loan, as is consistent with this Agreement and the Servicing Standard.
(f) The purchase price for any Defaulted Mortgage Loan purchased under this Section 3.18 shall be remitted to the Master Servicer for deposit into the Collection Account, and the Trustee or a Custodian on its behalf, upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, shall release or cause to be released to the purchaser of the Defaulted Mortgage Loan the related Mortgage File, and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in such purchaser ownership of such Mortgage Loan. In connection with any such purchase, the Special Servicer and the Master Servicer shall deliver the related Servicer Mortgage File (to the extent either has possession of such file) to such purchaser.
(g) Notwithstanding any of the foregoing paragraphs of this Section 3.18 the Special Servicer shall not be obligated to accept the highest cash offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and the Special Servicer may accept a lower cash offer (from any Person other than itself or an Affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (for example, if the prospective buyer making the lower offer is more likely to perform its obligations or the terms offered by the prospective buyer making the lower offer are more favorable).
(h) Notwithstanding anything to the contrary herein, any purchase of a Defaulted Mortgage Loan pursuant to this Section 3.18 will remain subject to the cure and purchase rights of any holder of a related mezzanine loan as set forth in the related mezzanine loan intercreditor agreement. The Special Servicer shall determine the price to be paid in accordance with the terms of the related mezzanine loan intercreditor agreement in connection with any such purchase rights in favor of the holder of the related mezzanine loan and shall provide such notices to the holder of the related mezzanine loan as is required by the related mezzanine loan intercreditor agreement in connection with such holders’ purchase rights.
(i) The Special Servicer shall sell a REO Property in the manner set forth in Section 3.16(a). The Special Servicer may purchase any such REO Property (at the Purchase Price therefor). The Special Servicer may also offer to sell to any Person any REO Property, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best economic interests of the Trust Fund. The Special Servicer shall give the Trustee, the Master Servicer and the Directing Certificateholder, not less than [___] days’ prior written notice of its intention to sell any such REO Property, in which case the Special Servicer shall accept the highest offer received from any Person for any such REO Property in an amount at least equal to the Purchase Price therefor. To the extent permitted by applicable law, and subject to the Servicing Standard, the Master Servicer, an Affiliate of the Master Servicer, the Special Servicer or an Affiliate of the Special Servicer, or an employee of any of them may act as broker in connection with the sale of any such REO Property and may retain from the proceeds of such sale a brokerage commission that does not exceed the commission that would have been earned by an independent broker pursuant to a brokerage agreement entered into at arm’s length. In the absence of any such offer, the Special Servicer shall accept the highest offer received from any Person that is determined by the Special Servicer to be a fair price for such REO Property, if the highest offeror is a Person other than the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates, or if such price is determined to be such a price by the Trustee, if the highest offeror is the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any such REO Property pursuant hereto. The Special Servicer shall not be obligated by either of the foregoing paragraphs or otherwise to accept the highest offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders. In addition, the Special Servicer may accept a lower offer if it determines, in accordance with the Servicing Standard that acceptance of such offer would be in the best interests of the Certificateholders (for example, if the prospective buyer making the lower offer is more likely to perform its obligations, or the terms offered by the prospective buyer making the lower offer are more favorable). In determining whether any offer received from the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates represents a fair price for any such REO Property, the Trustee shall obtain and may conclusively rely on an Appraisal from a Qualified Appraiser, at the expense of the Trust Fund. In determining whether any offer constitutes a fair price for any such REO Property, the Trustee (or, if applicable, such Qualified Appraiser) shall take into account, and any appraiser shall be instructed to take into account, as applicable, among other factors, the physical condition of such REO Property, the state of the local economy in the area where the Mortgaged Property is located, and the Trust Fund’s obligation to comply time and expense associated with REMIC Provisions. Subject a purchaser's foreclosing on the related Mortgaged Property and the expected recoveries from pursuing a work-out or foreclosure strategy instead of selling the Defaulted Mortgage Loan to the Servicing Standard and the REMIC ProvisionsPurchase Option holder. In addition, the Special Servicer shall act refer to all other relevant information obtained by it or otherwise contained in the Mortgage Loan File; provided that the Special Servicer shall take account of any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect the value of the related Mortgaged Property reflected in the most recent related Appraisal. Furthermore, the Special Servicer shall consider all available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located.
(c) Subject to the terms set forth in Section 2.03, in the event a Mortgage Loan becomes a Defaulted Mortgage Loan, each of the Majority Subordinate Certificateholder and the Special Servicer (each, together with their assignees, an "Option Holder") shall have an assignable option (a "Purchase Option") to purchase such Defaulted Mortgage Loan from the Trust Fund at a price (the "Option Price") equal to (i) the Purchase Price, if the Special Servicer has not yet determined the fair value of the Defaulted Mortgage Loan, or (ii) the fair value of the Defaulted Mortgage Loan as determined by the Special Servicer in the manner described in Section 3.18(b) and in accordance with the Servicing Standard, if the Special Servicer has made such fair value determination. Any holder of a Purchase Option may sell, transfer, assign or otherwise convey its Purchase Option with respect to any Defaulted Mortgage Loan to any party at any time after the related Mortgage Loan becomes a Defaulted Mortgage Loan. The transferor of any Purchase Option shall notify the Trustee and the Master Servicer of such transfer and such notice shall include the transferee's name, address, telephone number, facsimile number and appropriate contact person(s) and shall be acknowledged in writing by the transferee. Notwithstanding the foregoing, the Majority Subordinate Certificateholder shall have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer; provided, however, if the Purchase Option is not exercised by the Majority Subordinate Certificateholder or any assignee thereof within 60 days of a Mortgage Loan becoming a Defaulted Mortgage Loan, then the Special Servicer shall have the right to exercise its Purchase Option prior to any exercise by the Majority Subordinate Certificateholder and the Special Servicer or its assignee may exercise such Purchase Option at any time during the fifteen day period immediately following the expiration of such 60-day period. Following the expiration of such fifteen day period, the Majority Subordinate Certificateholder shall again have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer. If not exercised earlier, the Purchase Option with respect to any Defaulted Mortgage Loan will automatically terminate (i) once the related Defaulted Mortgage Loan is no longer a Defaulted Mortgage Loan; provided, however, that if such Mortgage Loan subsequently becomes a Defaulted Mortgage Loan, the related Purchase Option shall again be exercisable, (ii) upon the acquisition, by or on behalf of the Trust Fund Fund, of title to the related Mortgaged Property through foreclosure or deed in negotiating and taking any other action necessary lieu of foreclosure or appropriate (iii) the modification or pay-off, in full or at a discount, of such Defaulted Mortgage Loan in connection with the sale of any such REO Property, including the collection of all amounts payable in connection therewith. A sale of any such REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, any Servicer, or the Trust Fund (except that any contract of sale and assignment and conveyance documents may contain customary representations and warranties of title, condition and authority so long as the only recourse for breach thereof is to the Trust Fund) and, if consummated in accordance with the terms of this Agreement, none of the Master Servicer, the Special Servicer, the Depositor nor the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trusteea workout.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)
Resolution of Defaulted Mortgage Loans and REO Properties. (a) Promptly upon a Mortgage Loan becoming a Defaulted Mortgage Loan and if the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) to attempt to sell such Defaulted Mortgage LoanThe Master Servicer, the Special Servicer shall use reasonable efforts to solicit offers for such Defaulted or the Trustee may sell or purchase, or permit the sale or purchase of, a Mortgage Loan or an REO Property only on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. Subject terms and subject to the provisions of conditions set forth in this Section 3.18, the Special Servicer shall accept the first (and, if multiple offers are contemporaneously received, the highest3.18 or as otherwise expressly provided in or contemplated by Sections 2.03(a) cash offer received from any Person that constitutes a fair price for such Defaulted Mortgage Loanand 9.01.]
(b) The Special Servicer shall give the Trustee, the 17g-5 Information Provider, the Majority Certificateholder of the Controlling Class and the Master Servicer not less than five (5) Business Days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person shall be obligated to submit an offer to purchase any Defaulted Mortgage Loan, and notwithstanding anything to the contrary contained herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any Defaulted After a Mortgage Loan pursuant hereto.
(c) Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan for purposes of this Section 3.18 shall be determined by the Special Servicer, if the highest offeror is a Person other than an Interested Person, or by the Trustee, if the highest offeror is an Interested Person; provided, however, that, no offer from an Interested Person shall constitute a fair price unless (i) it is the highest offer received and (ii) at least two (2) other offers are received from independent third parties. In all cases under this Section 3.18, in determining whether any offer received from an Interested Person represents a fair price for any Defaulted Mortgage Loan, the Trustee shall be supplied with and shall rely on the most recent Appraisal or updated Appraisal conducted in accordance with this Agreement within the preceding nine month period or, in the absence of any such Appraisal, on a new Appraisal. The appraiser conducting any such new appraisal shall be an Appraiser selected by the Special Servicer if no Interested Person is making an offer with respect to a Defaulted Mortgage Loan and selected by the Trustee if an Interested Person is so making an offer. The cost of any such narrative appraisal shall be covered by, and shall be reimbursable as, a Servicing Advance. Where any Interested Person is among those making an offer with respect to becomes a Defaulted Mortgage Loan, the Special Servicer shall require determine the fair value of the Mortgage Loan in accordance with the Servicing Standard; provided, however, that all offers such determination shall be submitted made without taking into account any effect the restrictions on the sale of such Mortgage Loan contained herein may have on the value of such Defaulted Mortgage Loan; provided, further, that the Special Servicer shall use reasonable efforts promptly to obtain an Appraisal with respect to the Trustee related Mortgage Property unless it has an Appraisal that is less than 12 months old and has no actual knowledge of, or notice of, any event which in writing the Special Servicer's judgment would materially affect the validity of such Appraisal. The Special Servicer shall make its fair value determination as soon as reasonably practicable (but in any event within thirty (30) days) after its receipt of such new Appraisal, if applicable. The Special Servicer will be permitted, from time to time, to adjust its fair value determination based upon changed circumstances, new information and (x) if there is only one bidderother relevant factors, be accompanied by in each instance in accordance with the Servicing Standard; provided, however, that the Special Servicer shall update its fair value determination at least once every 90 days; provided further that absent the Special Servicer having actual knowledge of a refundable cash deposit material change in an amount equal to 5% circumstances affecting the value of the offered amount related Mortgaged Property, the Special Servicer shall not be obligated to update such determination. The Special Servicer shall notify the Trustee, the Master Servicer, each Rating Agency and (y) if there is more than one bidder, be accompanied by a refundable cash deposit in an amount equal the Majority Subordinate Certificateholder promptly upon its fair value determination and any adjustment thereto. The Special Servicer shall also deliver to 5% the Master Servicer and the Majority Subordinate Certificateholder the most recent Appraisal of the offered amount from related Mortgaged Property then in the highest bidderSpecial Servicer's possession, together with such other third-party reports and other information then in the Special Servicer's possession that the Special Servicer reasonably believes to be relevant to the fair value determination with respect to such Mortgage Loan (such materials are, collectively, the "Determination Information"). Notwithstanding the foregoing, the Special Servicer shall not be required to deliver the Determination Information to the Master Servicer, and shall instead deliver the Determination Information to the Trustee, if the Master Servicer will not be determining whether the Option Price represents fair value for the Defaulted Mortgage Loan, pursuant to this Section 3.18. In determining whether the fair value of any such offer from a Person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the Special Servicer shall take into account (in addition to the results of any Appraisal, updated Appraisal or narrative appraisal that it may have obtained pursuant to this Agreement within the prior nine months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser shall be instructed to take into account, as applicable, among other factors, the period and amount of any the delinquency on the Defaulted such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy. The Purchase Price for any Defaulted Mortgage Loan shall in all cases be deemed a fair price.
(d) Subject to the other subsections of this Section 3.18, the Special Servicer shall act on behalf of the Trust in negotiating and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage Loan, and the collection of all amounts payable in connection therewith. In connection therewith, the Special Servicer may charge prospective offerors, and may retain, fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or exchanging offers without obligation to deposit such amounts into the Collection Account. Any sale of any Defaulted Mortgage Loan shall be for cash. Any sale of any Defaulted Mortgage Loan shall be final and without recourse to the Trustee or the Trust (except such recourse to the Trust imposed by those representations and warranties typically given in such transactions and any customary closing matters), and if such sale is consummated in accordance with the terms of this Agreement, none of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
(e) Subject to the rights of a holder of any related B Note, Serviced Companion Loan or mezzanine loan, under the respective Intercreditor Agreement or mezzanine loan intercreditor agreement, as applicable, to purchase a Mortgage Loan, unless and until a Defaulted Mortgage Loan is sold pursuant to this Section 3.18, the Special Servicer shall continue to service and administer such Mortgage Loan in accordance with the Servicing Standard and this Agreement and shall pursue such other resolutions or recovery strategies including workout, foreclosure or sale of such Mortgage Loan, as is consistent with this Agreement and the Servicing Standard.
(f) The purchase price for any Defaulted Mortgage Loan purchased under this Section 3.18 shall be remitted to the Master Servicer for deposit into the Collection Account, and the Trustee or a Custodian on its behalf, upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, shall release or cause to be released to the purchaser of the Defaulted Mortgage Loan the related Mortgage File, and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in such purchaser ownership of such Mortgage Loan. In connection with any such purchase, the Special Servicer and the Master Servicer shall deliver the related Servicer Mortgage File (to the extent either has possession of such file) to such purchaser.
(g) Notwithstanding any of the foregoing paragraphs of this Section 3.18 the Special Servicer shall not be obligated to accept the highest cash offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and the Special Servicer may accept a lower cash offer (from any Person other than itself or an Affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (for example, if the prospective buyer making the lower offer is more likely to perform its obligations or the terms offered by the prospective buyer making the lower offer are more favorable).
(h) Notwithstanding anything to the contrary herein, any purchase of a Defaulted Mortgage Loan pursuant to this Section 3.18 will remain subject to the cure and purchase rights of any holder of a related mezzanine loan as set forth in the related mezzanine loan intercreditor agreement. The Special Servicer shall determine the price to be paid in accordance with the terms of the related mezzanine loan intercreditor agreement in connection with any such purchase rights in favor of the holder of the related mezzanine loan and shall provide such notices to the holder of the related mezzanine loan as is required by the related mezzanine loan intercreditor agreement in connection with such holders’ purchase rights.
(i) The Special Servicer shall sell a REO Property in the manner set forth in Section 3.16(a). The Special Servicer may purchase any such REO Property (at the Purchase Price therefor). The Special Servicer may also offer to sell to any Person any REO Property, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best economic interests of the Trust Fund. The Special Servicer shall give the Trustee, the Master Servicer and the Directing Certificateholder, not less than [___] days’ prior written notice of its intention to sell any such REO Property, in which case the Special Servicer shall accept the highest offer received from any Person for any such REO Property in an amount at least equal to the Purchase Price therefor. To the extent permitted by applicable law, and subject to the Servicing Standard, the Master Servicer, an Affiliate of the Master Servicer, the Special Servicer or an Affiliate of the Special Servicer, or an employee of any of them may act as broker in connection with the sale of any such REO Property and may retain from the proceeds of such sale a brokerage commission that does not exceed the commission that would have been earned by an independent broker pursuant to a brokerage agreement entered into at arm’s length. In the absence of any such offer, the Special Servicer shall accept the highest offer received from any Person that is determined by the Special Servicer to be a fair price for such REO Property, if the highest offeror is a Person other than the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates, or if such price is determined to be such a price by the Trustee, if the highest offeror is the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any such REO Property pursuant hereto. The Special Servicer shall not be obligated by either of the foregoing paragraphs or otherwise to accept the highest offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders. In addition, the Special Servicer may accept a lower offer if it determines, in accordance with the Servicing Standard that acceptance of such offer would be in the best interests of the Certificateholders (for example, if the prospective buyer making the lower offer is more likely to perform its obligations, or the terms offered by the prospective buyer making the lower offer are more favorable). In determining whether any offer received from the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates represents a fair price for any such REO Property, the Trustee shall obtain and may conclusively rely on an Appraisal from a Qualified Appraiser, at the expense of the Trust Fund. In determining whether any offer constitutes a fair price for any such REO Property, the Trustee (or, if applicable, such Qualified Appraiser) shall take into account, and any appraiser shall be instructed to take into account, as applicable, among other factors, the physical condition of such REO Property, the state of the local economy in the area where the Mortgaged Property is located, and the Trust Fund’s obligation to comply time and expense associated with REMIC Provisions. Subject a purchaser's foreclosing on the related Mortgaged 117 Property and the expected recoveries from pursuing a work-out or foreclosure strategy instead of selling the Defaulted Mortgage Loan to the Servicing Standard and the REMIC ProvisionsPurchase Option holder. In addition, the Special Servicer shall act refer to all other relevant information obtained by it or otherwise contained in the Mortgage Loan File; provided that the Special Servicer shall take account of any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect the value of the related Mortgaged Property reflected in the most recent related Appraisal. Furthermore, the Special Servicer shall consider all available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located.
(c) Subject to the terms set forth in Section 2.03, in the event a Mortgage Loan becomes a Defaulted Mortgage Loan, each of the Majority Subordinate Certificateholder and the Special Servicer (each, together with their assignees, an "Option Holder") shall have an assignable option (a "Purchase Option"), subject to the right of the related Companion Holder to purchase the related AB Mortgage Loan or the related REO Property described in Section 3.26(d), to purchase such Defaulted Mortgage Loan from the Trust Fund at a price (the "Option Price") equal to (i) the Purchase Price, if the Special Servicer has not yet determined the fair value of the Defaulted Mortgage Loan, or (ii) the fair value of the Defaulted Mortgage Loan as determined by the Special Servicer in the manner described in Section 3.18(b) and in accordance with the Servicing Standard, if the Special Servicer has made such fair value determination. Any holder of a Purchase Option may sell, transfer, assign or otherwise convey its Purchase Option with respect to any Defaulted Mortgage Loan to any party at any time after the related Mortgage Loan becomes a Defaulted Mortgage Loan. The transferor of any Purchase Option shall notify the Trustee and the Master Servicer of such transfer and such notice shall include the transferee's name, address, telephone number, facsimile number and appropriate contact person(s) and shall be acknowledged in writing by the transferee. Notwithstanding the foregoing, the Majority Subordinate Certificateholder shall have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer; provided, however, if the Purchase Option is not exercised by the Majority Subordinate Certificateholder or any assignee thereof within 60 days of a Mortgage Loan becoming a Defaulted Mortgage Loan, then the Special Servicer shall have the right, but subject to the right of the related Companion Holder to purchase the related AB Mortgage Loan or the related REO Property described in Section 3.26(d), to exercise its Purchase Option prior to any exercise by the Majority Subordinate Certificateholder and the Special Servicer or its assignee may exercise such Purchase Option at any time during the fifteen day period immediately following the expiration of such 60-day period. Following the expiration of such fifteen day period, the Majority Subordinate Certificateholder shall again have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer. If not exercised earlier, the Purchase Option with respect to any Defaulted Mortgage Loan will automatically terminate (i) once the related Defaulted Mortgage Loan is no longer a Defaulted Mortgage Loan; provided, however, that if such Mortgage Loan subsequently becomes a Defaulted Mortgage Loan, the related Purchase Option shall again be exercisable, (ii) upon the acquisition, by or on behalf of the Trust Fund Fund, of title to the related Mortgaged Property through foreclosure or deed in negotiating and taking any other action necessary lieu of foreclosure or appropriate (iii) 118 the modification or pay-off, in full or at a discount, of such Defaulted Mortgage Loan in connection with the sale of any such REO Property, including the collection of all amounts payable in connection therewith. A sale of any such REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, any Servicer, or the Trust Fund (except that any contract of sale and assignment and conveyance documents may contain customary representations and warranties of title, condition and authority so long as the only recourse for breach thereof is to the Trust Fund) and, if consummated in accordance with the terms of this Agreement, none of the Master Servicer, the Special Servicer, the Depositor nor the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trusteea workout.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Merrill Lynch Mort Inv Inc Com MRT Pas THR Cert Ser 2002 Mw1)
Resolution of Defaulted Mortgage Loans and REO Properties. (a) Promptly upon a Mortgage Loan becoming a Defaulted Mortgage Loan and if the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) to attempt to sell such Defaulted Mortgage LoanThe Master Servicer, the Special Servicer shall use reasonable efforts to solicit offers for such Defaulted or the Trustee may sell or purchase, or permit the sale or purchase of, a Mortgage Loan or an REO Property only on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. Subject terms and subject to the provisions of conditions set forth in this Section 3.18, the Special Servicer shall accept the first (and, if multiple offers are contemporaneously received, the highest3.18 or as otherwise expressly provided in or contemplated by Sections 2.03(a) cash offer received from any Person that constitutes a fair price for such Defaulted Mortgage Loanand 9.01.]
(b) The Special Servicer shall give the Trustee, the 17g-5 Information Provider, the Majority Certificateholder of the Controlling Class and the Master Servicer not less than five (5) Business Days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person shall be obligated to submit an offer to purchase any Defaulted Mortgage Loan, and notwithstanding anything to the contrary contained herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any Defaulted Within 60 days after a Mortgage Loan pursuant hereto.
(c) Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan for purposes of this Section 3.18 shall be determined by the Special Servicer, if the highest offeror is a Person other than an Interested Person, or by the Trustee, if the highest offeror is an Interested Person; provided, however, that, no offer from an Interested Person shall constitute a fair price unless (i) it is the highest offer received and (ii) at least two (2) other offers are received from independent third parties. In all cases under this Section 3.18, in determining whether any offer received from an Interested Person represents a fair price for any Defaulted Mortgage Loan, the Trustee shall be supplied with and shall rely on the most recent Appraisal or updated Appraisal conducted in accordance with this Agreement within the preceding nine month period or, in the absence of any such Appraisal, on a new Appraisal. The appraiser conducting any such new appraisal shall be an Appraiser selected by the Special Servicer if no Interested Person is making an offer with respect to a Defaulted Mortgage Loan and selected by the Trustee if an Interested Person is so making an offer. The cost of any such narrative appraisal shall be covered by, and shall be reimbursable as, a Servicing Advance. Where any Interested Person is among those making an offer with respect to becomes a Defaulted Mortgage Loan, the Special Servicer shall require determine the fair value of the Mortgage Loan in accordance with the Servicing Standard; provided, however, that all offers such determination shall be submitted made without taking into account any effect the restrictions on the sale of such Mortgage Loan contained herein may have on the value of such Defaulted Mortgage Loan; provided, further, that if the Special Servicer is then in the process of obtaining a new Appraisal with respect to the Trustee related Mortgaged Property, the Special Servicer shall make its fair value determination as soon as reasonably practicable (but in writing and any event within thirty (x30) if there days) after its receipt of such new Appraisal. The Special Servicer is only one bidderpermitted to change, be accompanied by a refundable cash deposit in an amount equal from time to 5% time, its determination of the offered amount fair value of a Defaulted Mortgage Loan based upon changed circumstances, new information or otherwise, in accordance with the Servicing Standard. The Special Servicer shall notify the Trustee, the Master Servicer, the Paying Agent, each Rating Agency and (y) if there is more than one bidder, be accompanied by a refundable cash deposit in an amount equal to 5% of the offered amount from the highest bidderMajority Subordinate Certificateholder promptly upon its fair value determination and any adjustment thereto. In determining whether the fair value of any such offer from a Person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the Special Servicer shall take into account (in addition to the results of any Appraisal, updated Appraisal or narrative appraisal that it may have obtained pursuant to this Agreement within the prior nine months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser shall be instructed to take into account, as applicable, among other factors, the period and amount of any the delinquency on the Defaulted such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and Property, the state of the local economyeconomy in the area where the Mortgaged Property is located, and the time and expense associated with a purchaser's foreclosing on the related Mortgaged Property. In addition, the Special Servicer shall refer to all other relevant information obtained by it or otherwise contained in the Mortgage Loan File; provided that the Special Servicer shall take account of any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect the value of the related Mortgaged Property reflected in the most recent related Appraisal. Furthermore, the Special Servicer shall consider all available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may conclusively rely on the opinion and reports of Independent third parties in making such determination.
(c) Subject to the terms set forth in Section 2.03, in the event a Mortgage Loan becomes a Defaulted Mortgage Loan, each of the Majority Subordinate Certificateholder and the Special Servicer shall have an assignable option (a "Purchase Price for Option") to purchase such Defaulted Mortgage Loan from the Trust Fund at a price (the "Option Price") equal to (i) the Purchase Price, if the Special Servicer has not yet determined the fair value of the Defaulted Mortgage Loan, or (ii) the fair value of the Defaulted Mortgage Loan as determined by the Special Servicer in the manner described in Section 3.18(b) and in accordance with the Servicing Standard, if the Special Servicer has made such fair value determination. Any holder of a Purchase Option may sell, transfer, assign or otherwise convey its Purchase Option with respect to any Defaulted Mortgage Loan to any party at any time after the related Mortgage Loan becomes a Defaulted Mortgage Loan. The transferor of any Purchase Option shall notify the Trustee, the Paying Agent and the Master Servicer of such transfer and such notice shall include the transferee's name, address, telephone number, facsimile number and appropriate contact person(s) and shall be acknowledged in all cases writing by the transferee. Notwithstanding the foregoing, the Majority Subordinate Certificateholder shall have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer; provided, however, if the Purchase Option is not exercised by the Majority Subordinate Certificateholder or any assignee thereof within 60 days of a Mortgage Loan becoming a Defaulted Mortgage Loan, then the Special Servicer shall have the right to exercise its Purchase Option prior to any exercise by the Majority Subordinate Certificateholder and the Special Servicer or its assignee may exercise such Purchase Option at any time during the fifteen day period immediately following the expiration of such 60-day period. Following the expiration of such fifteen day period, the Majority Subordinate Certificateholder shall again have the right to exercise its Purchase Option prior to any exercise of the Purchase Option by the Special Servicer. If not exercised earlier, the Purchase Option with respect to any Defaulted Mortgage Loan will automatically terminate (i) once the related Defaulted Mortgage Loan is no longer a Defaulted Mortgage Loan; provided, however, that if such Mortgage Loan subsequently becomes a Defaulted Mortgage Loan, the related Purchase Option shall again be deemed exercisable, (ii) upon the acquisition, by or on behalf of the Trust Fund, of title to the related Mortgaged Property through foreclosure or deed in lieu of foreclosure or (iii) the modification or pay-off, in full or at a fair pricediscount, of such Defaulted Mortgage Loan in connection with a workout.
(d) Notwithstanding Section 3.18(c), Section 3.18(g) or Section 3.18(h), pursuant to the terms of the related Co-Lender Agreement, the Companion Holder will have the right to purchase the related AB Mortgage Loan or related REO Property. Such right of the Companion Holder shall be given priority over any provision described in Section 3.18(c), Section 3.18(g) or Section 3.18(h). If the AB Mortgage Loan or REO Property is purchased by the Companion Holder, repurchased by the applicable Mortgage Loan Seller or otherwise ceases to be subject to this Agreement, the related Companion Loan will no longer be subject to this Agreement.
(e) Upon receipt of notice from the Special Servicer indicating that a Mortgage Loan has become a Defaulted Mortgage Loan, the holder (whether the original grantee of such option or any subsequent transferee) of the Purchase Option may exercise the Purchase Option by providing the Master Servicer, the Paying Agent and the Trustee written notice thereof (the "Purchase Option Notice"), in the form of Exhibit CC, which notice shall identify the Person that, on its own or through an Affiliate, will acquire the related Mortgage Loan upon closing and shall specify a cash exercise price at least equal to the Option Price. The Purchase Option Notice shall be delivered in the manner specified in Section 11.05. The exercise of any Purchase Option pursuant to this clause (e) shall be irrevocable.
(f) If the Special Servicer or the Majority Subordinate Certificateholder, or any of their respective Affiliates, is identified in the Purchase Option Notice as the Person expected to acquire the related Mortgage Loan, the Trustee shall determine as soon as reasonably practicable (and, in any event, within thirty (30) days) after the Trustee has received the written notice, whether the Option Price represents fair value for the Defaulted Mortgage Loan; provided that, if the Special Servicer is then in the process of obtaining a new Appraisal with respect to the related Mortgaged Property, then the Trustee shall make its fair value determination with respect to such Mortgage Loan as soon as reasonably practicable (but in any event within thirty (30) days) after the Trustee's receipt of such new Appraisal. Such fair value determination shall be made in accordance with the Servicing Standard. In determining the fair value of any Defaulted Mortgage Loan, the Trustee shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the Mortgaged Property is located, and the time and expense associated with a purchaser's foreclosing on the related Mortgaged Property. In addition, the Trustee shall refer to the Servicing Standard and all other relevant information delivered to it by the Special Servicer or otherwise contained in the Mortgage Loan File; provided that the Trustee shall take account of any change in circumstances regarding the related Mortgaged Property known to the Trustee that has occurred subsequent to, and that would, in the Trustee's reasonable judgment, materially affect the value of the related Mortgaged Property. Furthermore, the Trustee shall consider all available objective third-party information obtained from generally available sources, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Trustee may rely on the opinion and reports of Independent third parties in making such determination; provided that the Trustee may rely on the most current Appraisal obtained for the related Mortgaged Property pursuant to this Agreement. The reasonable costs of all appraisals, inspection reports and broker opinions of value, reasonably incurred by the Trustee or any such third party pursuant to this subsection shall be advanced by the Master Servicer and shall constitute, and be reimbursable as, Servicing Advances (or if such advance is deemed to be a Nonrecoverable Advance such costs shall be reimbursable as Additional Trust Fund Expenses from the Certificate Account pursuant to Section 3.05(a)). The other parties to this Agreement shall cooperate with all reasonable requests for information.
(g) Unless and until the Purchase Option with respect to a Defaulted Mortgage Loan is exercised, the Special Servicer shall pursue such other resolution strategies available hereunder with respect to such Defaulted Mortgage Loan, including, without limitation, workout and foreclosure, as the Special Servicer may deem appropriate consistent with the Servicing Standard; provided, however, the Special Servicer will not be permitted to sell the Defaulted Mortgage Loan other than in connection with the exercise of the related Purchase Option.
(h) In the event that title to any REO Property is acquired by the Trust in respect of any Defaulted Mortgage Loan, the deed or certificate of sale shall be issued to the Trust, the Trustee or to its nominees. The Special Servicer, after notice to the Controlling Class Representative, shall use its reasonable best efforts to sell any REO Property as soon as practicable in accordance with Section 3.16(a). If the Special Servicer on behalf of the Trustee has not received an REO Extension or an Opinion of Counsel described in Section 3.16(a) and the Special Servicer is not able to sell such REO Property within the period specified above, or if an REO Extension has been granted and the Special Servicer is unable to sell such REO Property within the extended time period, the Special Servicer shall, after consultation with the Controlling Class Representative, before the end of such period or extended period, as the case may be, auction the REO Property to the highest bidder (which may be the Special Servicer) in accordance with the Servicing Standard. The Special Servicer shall give the Controlling Class Representative, the Master Servicer, the Paying Agent and the Trustee not less than five days' prior written notice of its intention to sell any REO Property, and in respect of such sale, the Special Servicer shall offer such REO Property in a commercially reasonable manner. Where any Interested Person is among those bidding with respect to an REO Property, the Special Servicer shall require that all bids be submitted in writing and be accompanied by a refundable deposit of cash in an amount equal to 5% of the bid amount. No Interested Person shall be permitted to purchase the REO Property at a price less than the Purchase Price; and provided, further that if the Special Servicer intends to bid on any REO Property, (i) the Special Servicer shall notify the Trustee of such intent, (ii) the Trustee shall promptly obtain, at the expense of the Trust, an Appraisal of such REO Property and (iii) the Special Servicer shall not bid less than the greater of (a) the fair market value set forth in such Appraisal or (b) the Purchase Price.
(i) Subject to the other subsections of this Section 3.18REMIC Provisions, the Special Servicer shall act on behalf of the Trust in negotiating and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage LoanREO Property or the exercise of a Purchase Option, and including the collection of all amounts payable in connection therewith. In connection therewith, the Special Servicer may charge prospective offerors, and may retain, fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or exchanging offers without obligation to deposit such amounts into the Collection Account. Any sale of any Defaulted Mortgage Loan shall be for cash. Any sale of any Defaulted Mortgage Loan shall be final and without recourse to the Trustee or the Trust (except such recourse to the Trust imposed by those representations and warranties typically given in such transactions and any customary closing matters), and if such sale is consummated in accordance with the terms of this Agreement, none of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
(e) Subject to the rights of a holder of any related B Note, Serviced Companion Loan or mezzanine loan, under the respective Intercreditor Agreement or mezzanine loan intercreditor agreement, as applicable, to purchase a Mortgage Loan, unless and until a Defaulted Mortgage Loan is sold pursuant to this Section 3.18, the Special Servicer shall continue to service and administer such Mortgage Loan in accordance with the Servicing Standard and this Agreement and shall pursue such other resolutions or recovery strategies including workout, foreclosure or sale of such Mortgage Loan, as is consistent with this Agreement and the Servicing Standard.
(f) The purchase price for any Defaulted Mortgage Loan purchased under this Section 3.18 shall be remitted to the Master Servicer for deposit into the Collection Account, and the Trustee or a Custodian on its behalf, upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, shall release or cause to be released to the purchaser of the Defaulted Mortgage Loan the related Mortgage File, and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in such purchaser ownership of such Mortgage Loan. In connection with any such purchase, the Special Servicer and the Master Servicer shall deliver the related Servicer Mortgage File (to the extent either has possession of such file) to such purchaser.
(g) Notwithstanding any of the foregoing paragraphs of this Section 3.18 the Special Servicer shall not be obligated to accept the highest cash offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and the Special Servicer may accept a lower cash offer (from any Person other than itself or an Affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (for example, if the prospective buyer making the lower offer is more likely to perform its obligations or the terms offered by the prospective buyer making the lower offer are more favorable).
(h) Notwithstanding anything to the contrary herein, any purchase of a Defaulted Mortgage Loan pursuant to this Section 3.18 will remain subject to the cure and purchase rights of any holder of a related mezzanine loan as set forth in the related mezzanine loan intercreditor agreement. The Special Servicer shall determine the price to be paid in accordance with the terms of the related mezzanine loan intercreditor agreement in connection with any such purchase rights in favor of the holder of the related mezzanine loan and shall provide such notices to the holder of the related mezzanine loan as is required by the related mezzanine loan intercreditor agreement in connection with such holders’ purchase rights.
(i) The Special Servicer shall sell a REO Property in the manner set forth in Section 3.16(a). The Special Servicer may purchase any such REO Property (at the Purchase Price therefor). The Special Servicer may also offer to sell to any Person any REO Property, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best economic interests of the Trust Fund. The Special Servicer shall give the Trustee, the Master Servicer and the Directing Certificateholder, not less than [___] days’ prior written notice of its intention to sell any such REO Property, in which case the Special Servicer shall accept the highest offer received from any Person for any such REO Property in an amount at least equal to the Purchase Price therefor. To the extent permitted by applicable law, and subject to the Servicing Standard, the Master Servicer, an Affiliate of the Master Servicer, the Special Servicer or an Affiliate of the Special Servicer, or an employee of any of them may act as broker in connection with the sale of any such REO Property and may retain from the proceeds of such sale a brokerage commission that does not exceed the commission that would have been earned by an independent broker pursuant to a brokerage agreement entered into at arm’s length. In the absence of any such offer, the Special Servicer shall accept the highest offer received from any Person that is determined by the Special Servicer to be a fair price for such REO Property, if the highest offeror is a Person other than the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates, or if such price is determined to be such a price by the Trustee, if the highest offeror is the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer bid for or purchase any such REO Property or purchase any Defaulted Mortgage Loan. Any sale of a Defaulted Mortgage Loan (pursuant hereto. The Special Servicer shall not be obligated by either of the foregoing paragraphs or otherwise to accept the highest offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders. In addition, the Special Servicer may accept a lower offer if it determines, in accordance with the Servicing Standard that acceptance of such offer would be in the best interests of the Certificateholders (for example, if the prospective buyer making the lower offer is more likely to perform its obligations, or the terms offered by the prospective buyer making the lower offer are more favorable). In determining whether any offer received from the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are AffiliatesPurchase Option) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates represents a fair price for any such REO Property, the Trustee shall obtain and may conclusively rely on an Appraisal from a Qualified Appraiser, at the expense of the Trust Fund. In determining whether any offer constitutes a fair price for any such REO Property, the Trustee (or, if applicable, such Qualified Appraiser) shall take into account, and any appraiser shall be instructed to take into account, as applicable, among other factors, the physical condition of such REO Property, the state of the local economy and the Trust Fund’s obligation to comply with REMIC Provisions. Subject to the Servicing Standard and the REMIC Provisions, the Special Servicer shall act on behalf of the Trust Fund in negotiating and taking any other action necessary or appropriate in connection with the sale of any such REO Property, including the collection of all amounts payable in connection therewith. A sale of any such REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Paying Agent, the Depositor, any the Special Servicer, the Master Servicer, any Mortgage Loan Seller or the Trust Fund (except that any contract of sale and assignment and conveyance documents may contain customary representations and warranties of titleTrust. Notwithstanding the foregoing, condition and authority so long as nothing herein shall limit the only recourse for breach thereof is to the Trust Fund) and, if consummated in accordance with the terms of this Agreement, none liability of the Master Servicer, the Special Servicer, the Depositor nor Paying Agent or the Trustee to the Trust and the Certificateholders for failure to perform its duties in accordance herewith. None of the Special Servicer, the Master Servicer, the Depositor, the Paying Agent or the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the price at which a Defaulted Mortgage Loan is sold if the sale is consummated in accordance with the terms of this Agreement.
(j) Upon exercise of a Purchase Option, the holder of such Purchase Option shall be required to pay the purchase price therefor accepted specified in its Purchase Option Notice to the Special Servicer within 10 Business Days of exercising its Purchase Option. The proceeds of any sale of a Defaulted Mortgage Loan, after deduction of the expenses of such sale incurred in connection therewith, shall be deposited by the Special Servicer within one Business Day of receipt in the Certificate Account.
(k) Notwithstanding anything herein to the contrary, the Special Servicer shall not take or refrain from taking any action pursuant to instructions from the TrusteeControlling Class Representative that would cause it to violate applicable law or any term or provision of this Agreement, including the REMIC Provisions and the Servicing Standard.
(l) The amount paid for a Defaulted Mortgage Loan or related REO Property purchased under this Agreement shall be deposited into the Certificate Account, or if applicable, applied in accordance with the related Co-Lender Agreement. Upon receipt of an Officers' Certificate from the Master Servicer to the effect that such deposit has been made, the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be provided to it and are reasonably necessary to vest in the purchaser of such Defaulted Mortgage Loan or related REO Property ownership of the Defaulted Mortgage Loan or REO Property. The Custodian, upon receipt of a Request for Release, shall release or cause to be released to the Master Servicer or Special Servicer the related Mortgage File. In connection with any such purchase, the Special Servicer shall deliver the related Servicing File to the purchaser of a Defaulted Mortgage Loan or related REO Property.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (First Union Commercial Mortgage Pass THR Cer Ser 2001-C3)
Resolution of Defaulted Mortgage Loans and REO Properties. (a) Promptly upon a Mortgage Loan becoming a Defaulted Mortgage Loan and if the Special Servicer determines in accordance with the Servicing Standard that it would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) to attempt to sell such Defaulted Mortgage Loan, the Special Servicer shall use reasonable efforts to solicit offers for such Defaulted Mortgage Loan on behalf of the Certificateholders in such manner as will be reasonably likely to realize a fair price. Subject to the provisions of this Section 3.18, the Special Servicer shall accept the first (and, if multiple offers are contemporaneously received, the highest) cash offer received from any Person that constitutes a fair price for such Defaulted Mortgage Loan.]
(b) The Special Servicer shall give the Trustee, the 17g-5 Information Provider, the Majority Certificateholder of the Controlling Class and the Master Servicer not less than five (5) Business Days’ prior written notice of its intention to sell any Defaulted Mortgage Loan. No Interested Person shall be obligated to submit an offer to purchase any Defaulted Mortgage Loan, and notwithstanding anything to the contrary contained herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any Defaulted Mortgage Loan pursuant hereto.
(c) Whether any cash offer constitutes a fair price for any Defaulted Mortgage Loan for purposes of this Section 3.18 shall be determined by the Special Servicer, if the highest offeror is a Person other than an Interested Person, or by the Trustee, if the highest offeror is an Interested Person; provided, however, that, no offer from an Interested Person shall constitute a fair price unless (i) it is the highest offer received and (ii) at least two (2) other offers are received from independent third parties. In all cases under this Section 3.18, in determining whether any offer received from an Interested Person represents a fair price for any Defaulted Mortgage Loan, the Trustee shall be supplied with and shall rely on the most recent Appraisal or updated Appraisal conducted in accordance with this Agreement within the preceding nine month period or, in the absence of any such Appraisal, on a new Appraisal. The appraiser conducting any such new appraisal shall be an Appraiser selected by the Special Servicer if no Interested Person is making an offer with respect to a Defaulted Mortgage Loan and selected by the Trustee if an Interested Person is so making an offer. The cost of any such narrative appraisal shall be covered by, and shall be reimbursable as, a Servicing Advance. Where any Interested Person is among those making an offer with respect to a Defaulted Mortgage Loan, the Special Servicer shall require that all offers be submitted to the Trustee in writing and (x) if there is only one bidder, be accompanied by a refundable cash deposit in an amount equal to 5% of the offered amount and (y) if there is more than one bidder, be accompanied by a refundable cash deposit in an amount equal to 5% of the offered amount from the highest bidder. In determining whether any such offer from a Person other than an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, the Special Servicer shall take into account (in addition to the results of any Appraisal, updated Appraisal or narrative appraisal that it may have obtained pursuant to this Agreement within the prior nine months), and in determining whether any offer from an Interested Person constitutes a fair price for any such Defaulted Mortgage Loan, any appraiser shall be instructed to take into account, as applicable, among other factors, the period and amount of any delinquency on the Defaulted Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property and the state of the local economy. The Purchase Price for any Defaulted Mortgage Loan shall in all cases be deemed a fair price.
(d) Subject to the other subsections of this Section 3.18, the Special Servicer shall act on behalf of the Trust in negotiating and taking any other action necessary or appropriate in connection with the sale of any Defaulted Mortgage Loan, and the collection of all amounts payable in connection therewith. In connection therewith, the Special Servicer may charge prospective offerors, and may retain, fees that approximate the Special Servicer’s actual costs in the preparation and delivery of information pertaining to such sales or exchanging offers without obligation to deposit such amounts into the Collection Account. Any sale of any Defaulted Mortgage Loan shall be for cash. Any sale of any Defaulted Mortgage Loan shall be final and without recourse to the Trustee or the Trust (except such recourse to the Trust imposed by those representations and warranties typically given in such transactions and any customary closing matters), and if such sale is consummated in accordance with the terms of this Agreement, none of the Special Servicer, the Master Servicer, the Depositor or the Trustee shall have any liability to any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
(e) Subject to the rights of a holder of any related B Note, Serviced Companion Loan or mezzanine loan, under the respective Intercreditor Agreement or mezzanine loan intercreditor agreement, as applicable, to purchase a Mortgage Loan, unless and until a Defaulted Mortgage Loan is sold pursuant to this Section 3.18, the Special Servicer shall continue to service and administer such Mortgage Loan in accordance with the Servicing Standard and this Agreement and shall pursue such other resolutions or recovery strategies including workout, foreclosure or sale of such Mortgage Loan, as is consistent with this Agreement and the Servicing Standard.
(f) The purchase price for any Defaulted Mortgage Loan purchased under this Section 3.18 shall be remitted to the Master Servicer for deposit into the Collection Account, and the Trustee or a Custodian on its behalf, upon receipt of an Officer’s Certificate from the Master Servicer to the effect that such deposit has been made, shall release or cause to be released to the purchaser of the Defaulted Mortgage Loan the related Mortgage File, and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in such purchaser ownership of such Mortgage Loan. In connection with any such purchase, the Special Servicer and the Master Servicer shall deliver the related Servicer Mortgage File (to the extent either has possession of such file) to such purchaser.
(g) Notwithstanding any of the foregoing paragraphs of this Section 3.18 the Special Servicer shall not be obligated to accept the highest cash offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender), and the Special Servicer may accept a lower cash offer (from any Person other than itself or an Affiliate) if it determines, in its reasonable and good faith judgment, that acceptance of such offer would be in the best interests of the Certificateholders (as a collective whole as if such Certificateholders constituted a single lender) (for example, if the prospective buyer making the lower offer is more likely to perform its obligations or the terms offered by the prospective buyer making the lower offer are more favorable).
(h) Notwithstanding anything to the contrary herein, any purchase of a Defaulted Mortgage Loan pursuant to this Section 3.18 will remain subject to the cure and purchase rights of any holder of a related mezzanine loan as set forth in the related mezzanine loan intercreditor agreement. The Special Servicer shall determine the price to be paid in accordance with the terms of the related mezzanine loan intercreditor agreement in connection with any such purchase rights in favor of the holder of the related mezzanine loan and shall provide such notices to the holder of the related mezzanine loan as is required by the related mezzanine loan intercreditor agreement in connection with such holders’ purchase rights.
(i) The Special Servicer shall sell a REO Property in the manner set forth in Section 3.16(a). The Special Servicer may purchase any such REO Property (at the Purchase Price therefor). The Special Servicer may also offer to sell to any Person any REO Property, if and when the Special Servicer determines, consistent with the Servicing Standard, that such a sale would be in the best economic interests of the Trust Fund. The Special Servicer shall give the Trustee, the Master Servicer and the Directing Certificateholder, not less than [___] days’ prior written notice of its intention to sell any such REO Property, in which case the Special Servicer shall accept the highest offer received from any Person for any such REO Property in an amount at least equal to the Purchase Price therefor. To the extent permitted by applicable law, and subject to the Servicing Standard, the Master Servicer, an Affiliate of the Master Servicer, the Special Servicer or an Affiliate of the Special Servicer, or an employee of any of them may act as broker in connection with the sale of any such REO Property and may retain from the proceeds of such sale a brokerage commission that does not exceed the commission that would have been earned by an independent broker pursuant to a brokerage agreement entered into at arm’s length. In the absence of any such offer, the Special Servicer shall accept the highest offer received from any Person that is determined by the Special Servicer to be a fair price for such REO Property, if the highest offeror is a Person other than the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates, or if such price is determined to be such a price by the Trustee, if the highest offeror is the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates. Notwithstanding anything to the contrary herein, neither the Trustee, in its individual capacity, nor any of its Affiliates may make an offer for or purchase any such REO Property pursuant hereto. The Special Servicer shall not be obligated by either of the foregoing paragraphs or otherwise to accept the highest offer if the Special Servicer determines, in accordance with the Servicing Standard, that rejection of such offer would be in the best interests of the Certificateholders. In addition, the Special Servicer may accept a lower offer if it determines, in accordance with the Servicing Standard that acceptance of such offer would be in the best interests of the Certificateholders (for example, if the prospective buyer making the lower offer is more likely to perform its obligations, or the terms offered by the prospective buyer making the lower offer are more favorable). In determining whether any offer received from the Special Servicer, the Master Servicer (if the Master Servicer and Special Servicer are Affiliates) or the Majority Certificateholder of the Controlling Class, or any of their respective Affiliates represents a fair price for any such REO Property, the Trustee shall obtain and may conclusively rely on an Appraisal from a Qualified Appraiser, at the expense of the Trust Fund. In determining whether any offer constitutes a fair price for any such REO Property, the Trustee (or, if applicable, such Qualified Appraiser) shall take into account, and any appraiser shall be instructed to take into account, as applicable, among other factors, the physical condition of such REO Property, the state of the local economy and the Trust Fund’s obligation to comply with REMIC Provisions. Subject to the Servicing Standard and the REMIC Provisions, the Special Servicer shall act on behalf of the Trust Fund in negotiating and taking any other action necessary or appropriate in connection with the sale of any such REO Property, including the collection of all amounts payable in connection therewith. A sale of any such REO Property shall be without recourse to, or representation or warranty by, the Trustee, the Depositor, any Servicer, or the Trust Fund (except that any contract of sale and assignment and conveyance documents may contain customary representations and warranties of title, condition and authority so long as the only recourse for breach thereof is to the Trust Fund) and, if consummated in accordance with the terms of this Agreement, none of the Master Servicer, the Special Servicer, the Depositor nor the Trustee shall have any liability to the Trust Fund or any Certificateholder with respect to the purchase price therefor accepted by the Special Servicer or the Trustee.
Appears in 1 contract
Samples: Pooling and Servicing Agreement (Merrill Lynch Comm Mort Ps THR Certs Ser 2003-Key1)
