Title, Management and Disposition of REO Properties. (a) If any Mortgaged Premises becomes an REO Property, the Master Servicer shall use its best efforts to cause the Servicer of the related Mortgage Loan to manage, conserve, protect and operate such REO Property for the benefit of the Certificateholders solely for the purpose of its prompt disposition and sale. If one or more REMIC elections are made with respect to the assets of the Trust, the Master Servicer shall use its best efforts to cause the Servicer to use its best efforts to dispose of any REO Property for its fair market value within twenty-two months of its acquisition by the Trust, unless the Trustee has been granted an extension of time to dispose of such REO Property by the Internal Revenue Service pursuant to section 856(c)(3) of the Code (an "Extension"). If the Trustee has been granted an Extension, the Master Servicer shall continue to use its best efforts to have the Servicer sell the REO Property for its fair market value for the period ending two months prior to the time such Extension expires (the "Extended Period"). If the Servicer is unable to dispose of any REO Property within such twenty-two-month period or Extended Period, as the case may be, the Master Servicer shall use its best efforts to ensure that such REO Property is auctioned to the highest bidder within one month after the end of such twenty-two-month period or Extended Period, as the case may be. If no REMIC election has been or is to be made with respect to the assets of the Trust, the time period for disposing of any REO Property as specified in the preceding two sentences shall be within eleven months of its acquisition by the Trust. In the event of any such sale or auction of an REO Property, the Trustee shall, at the written request of the Master Servicer and upon being provided with appropriate forms therefor, within five Business Days of its receipt of the proceeds of such sale or auction, release or cause to be released to the purchaser the related Trustee Mortgage Loan File and Servicer File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the purchaser title to the REO Property, and upon so doing the Trustee shall have no further responsibility with regard to such Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of an REO Property. (b) If title to any REO Property is acquired, the deed or certificate of sale shall be issued to the Trustee for the benefit of the Certificateholders. Each Servicer shall, in accordance with Section 3.08(a) hereof, use its reasonable efforts to sell any REO Property as expeditiously as possible, but in any event within the time period, and subject to the conditions set forth in Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each Servicer shall either itself, or through an agent selected by it, protect and conserve such REO Property in the same manner and to the same extent as it customarily does in connection with its own real estate acquired through foreclosure or by deed in lieu of foreclosure, incident to its conservation and protection of the interests of the Certificateholders, and may rent such REO Property, or any part thereof, as it deems likely to increase the net proceeds distributable to the Certificateholders, subject to the terms and conditions described in this Section 3.08. For the purpose of protecting the interests of the Trustee and conserving any REO Property prior to sale, the Servicer of the related Mortgage Loan may contract with any Independent Contractor for the conservation, protection and rental of such REO Property, provided that: (i) the terms and conditions of any such contract may not be inconsistent herewith; (ii) any such contract shall require, or shall be administered to require, that the Independent Contractor (A) pay all costs and expenses incurred in connection with the operation and management of such REO Property, (B) hold all related revenues in a segregated account insured by the Federal Deposit Insurance Corporation and (C) remit all related revenues collected (net of such costs and expenses retained by such Independent Contractor) to the Servicer on a monthly or more frequent basis; and (iii) none of the provisions of this Section 3.08 relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Servicer of any of its duties and obligations to the Trustee and the Certificateholders with respect to the conservation, protection and rental of such REO Property. A Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. A Servicer or any Independent Contractor shall be entitled to a fee, based on the prevailing market rate (and set in good faith at a reasonable level in the case of a fee payable to a Servicer), for the operation and management of any REO Property, which fee shall be an expense of the Trust payable out of the gross income on such REO Property. (c) A Servicer shall deposit all funds collected and received in connection with the operation of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such funds. (d) A Servicer, upon the final disposition of any REO Property, shall be entitled to be reimbursed for any unreimbursed Advances and paid any unpaid Servicing Fees with respect to the related Mortgage Loan from the Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, however, that any such unreimbursed Advances or unpaid Servicing Fees may be reimbursed or paid, as the case may be, out of any net rental income or other net amounts derived from such REO Property. (e) The final disposition of any REO Property shall be carried out by a Servicer at the fair market value of such REO Property under the circumstances existing at the time of disposition and upon such terms and conditions as such Servicer shall deem necessary or advisable and as are in accordance with accepted servicing practices and in accordance with Section 3.08(a) hereof. (f) A Servicer shall deposit the Liquidation Proceeds from the final disposition of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such Liquidation Proceeds and, subject to such withdrawals as may be permitted by Section 3.08(d) hereof, such proceeds shall be transferred to the Asset Proceeds Account pursuant to Section 3.01(c) hereof. (g) A Servicer shall prepare and file reports of foreclosure and abandonment in accordance with section 6050J of the Code. (h) Notwithstanding any other provision of this Agreement, a Servicer, acting on behalf of the Trustee, shall not rent, lease or otherwise earn income or take any action on behalf of the Trust with respect to any REO Property that might (i) cause such REO Property to fail to qualify as "foreclosure property" within the meaning of section 86OG(a)(8) of the Code or (ii) result in the receipt by the REMIC of any "income from non-permitted assets" within the meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure property" within the meaning of section 860G(c)(2) of the Code, both of which types of income are subject to tax under the REMIC Provisions, unless the Trustee has received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of such Servicer's Servicer Custodial Account), to the effect that, under the REMIC Provisions and any relevant proposed legislation, any income generated for any related REMIC by such REO Property would not result in the imposition of a tax upon such REMIC. Without limiting the generality of the foregoing, neither the Trustee, the Master Servicer nor a Servicer shall knowingly: (i) enter into, renew or extend any New Lease with respect to any REO Property if the New Lease by its terms will give rise to any income that does not constitute Rents From Real Property; (ii) permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents From Real Property; (iii) authorize or permit any construction on any REO Property, other than the completion of a building or other improvement thereon and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of section 856(e)(4)(B) of the Code; or (iv) Directly Operate, or allow any other Person to Directly Operate, any REO Property on any date more than 90 days after its acquisition date (unless the Person who would Directly Operate such REO Property is an Independent Contractor); unless, in any such case, the Person proposing to take such action has requested and received the Opinion of Counsel described in the preceding sentence, in which case the Person may take such actions as are specified in such Opinion of Counsel. A Servicer shall not acquire any personal property relating to any Mortgage Loan pursuant to this Section 3.08 unless either: (i) such personal property is incident to real property (within the meaning of section 856(e)(1) of the Code) so acquired by such Servicer; or (ii) such Servicer shall have requested and received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of its Servicer Custodial Account), to the effect that the holding of such personal property by the related REMIC will not cause the imposition of a tax under the REMIC Provisions on any REMIC related to the Trust or cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.
Appears in 3 contracts
Samples: Underwriting Agreement (Saxon Asset Securities Co), Trust Agreement (Saxon Asset Securities Co), Trust Agreement (Saxon Asset Securities Co)
Title, Management and Disposition of REO Properties. (a) If any Mortgaged Premises becomes an REO Property, the Master Servicer shall use its best efforts to cause the Servicer of the related Mortgage Loan to manage, conserve, protect and operate such REO Property for the benefit of the Certificateholders solely for the purpose of its prompt disposition and sale. If one or more REMIC elections are made with respect to the assets of the Trust, the Master Servicer shall use its best efforts to cause the Servicer to use its best efforts to dispose of any REO Property for its fair market value within twenty-two months of its acquisition by the Trust, unless the Trustee has been granted an extension of time to dispose of such REO Property by the Internal Revenue Service pursuant to section 856(c)(3) of the Code (an "Extension"). If the Trustee has been granted an Extension, the Master Servicer shall continue to use its best efforts to have the Servicer sell the REO Property for its fair market value for the period ending two months prior to the time such Extension expires (the "Extended Period"). If the Servicer is unable to dispose of any REO Property within such twenty-two-month period or Extended Period, as the case may be, the Master Servicer shall use its best efforts to ensure that such REO Property is auctioned to the highest bidder within one month after the end of such twenty-two-month period or Extended Period, as the case may be. If no REMIC election has been or is to be made with respect to the assets of the Trust, the time period for disposing of any REO Property as specified in the preceding two sentences shall be within eleven months of its acquisition by the Trust. In the event of any such sale or auction of an REO Property, the Trustee shall, at the written request of the Master Servicer and upon being provided with appropriate forms therefor, within five Business Days of its receipt of the proceeds of such sale or auction, release or cause to be released to the purchaser the related Trustee Mortgage Loan File and Servicer File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the purchaser title to the REO Property, and upon so doing the Trustee shall have no further responsibility with regard to such Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquired, the deed or certificate of sale shall be issued to the Trustee for the benefit of the Certificateholders. Each Servicer shall, in accordance with Section 3.08(a) hereof, use its reasonable efforts to sell any REO Property as expeditiously as possible, but in any event within the time period, and subject to the conditions set forth in Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each Servicer shall either itself, or through an agent selected by it, protect and conserve such REO Property in the same manner and to the same extent as it customarily does in connection with its own real estate acquired through foreclosure or by deed in lieu of foreclosure, incident to its conservation and protection of the interests of the Certificateholders, and may rent such REO Property, or any part thereof, as it deems likely to increase the net proceeds distributable to the Certificateholders, subject to the terms and conditions described in this Section 3.08. For the purpose of protecting the interests of the Trustee and conserving any REO Property prior to sale, the Servicer of the related Mortgage Loan may contract with any Independent Contractor for the conservation, protection and rental of such REO Property, provided that:
(i) the terms and conditions of any such contract may not be inconsistent herewith;
(ii) any such contract shall require, or shall be administered to require, that the Independent Contractor (A) pay all costs and expenses incurred in connection with the operation and management of such REO Property, (B) hold all related revenues in a segregated account insured by the Federal Deposit Insurance Corporation and (C) remit all related revenues collected (net of such costs and expenses retained by such Independent Contractor) to the Servicer on a monthly or more frequent basis; and
(iii) none of the provisions of this Section 3.08 relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Servicer of any of its duties and obligations to the Trustee and the Certificateholders with respect to the conservation, protection and rental of such REO Property. A Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. A Servicer or any Independent Contractor shall be entitled to a fee, based on the prevailing market rate (and set in good faith at a reasonable level in the case of a fee payable to a Servicer), for the operation and management of any REO Property, which fee shall be an expense of the Trust payable out of the gross income on such REO Property.
(c) A Servicer shall deposit all funds collected and received in connection with the operation of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be entitled to be reimbursed for any unreimbursed Advances and paid any unpaid Servicing Fees with respect to the related Mortgage Loan from the Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, however, that any such unreimbursed Advances or unpaid Servicing Fees may be reimbursed or paid, as the case may be, out of any net rental income or other net amounts derived from such REO Property.
(e) The final disposition of any REO Property shall be carried out by a Servicer at the fair market value of such REO Property under the circumstances existing at the time of disposition and upon such terms and conditions as such Servicer shall deem necessary or advisable and as are in accordance with accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final disposition of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such Liquidation Proceeds and, subject to such withdrawals as may be permitted by Section 3.08(d) hereof, such proceeds shall be transferred to the Asset Proceeds Account pursuant to Section 3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer, acting on behalf of the Trustee, shall not rent, lease or otherwise earn income or take any action on behalf of the Trust with respect to any REO Property that might (i) cause such REO Property to fail to qualify as "foreclosure property" within the meaning of section 86OG(a)(8) of the Code or (ii) result in the receipt by the REMIC of any "income from non-permitted assets" within the meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure property" within the meaning of section 860G(c)(2) of the Code, both of which types of income are subject to tax under the REMIC Provisions, unless the Trustee has received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of such Servicer's Servicer Custodial Account), to the effect that, under the REMIC Provisions and any relevant proposed legislation, any income generated for any related REMIC by such REO Property would not result in the imposition of a tax upon such REMIC. Without limiting the generality of the foregoing, neither the Trustee, the Master Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any REO Property if the New Lease by its terms will give rise to any income that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property, other than the completion of a building or other improvement thereon and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly Operate, any REO Property on any date more than 90 days after its acquisition date (unless the Person who would Directly Operate such REO Property is an Independent Contractor); unless, in any such case, the Person proposing to take such action has requested and received the Opinion of Counsel described in the preceding sentence, in which case the Person may take such actions as are specified in such Opinion of Counsel. A Servicer shall not acquire any personal property relating to any Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property (within the meaning of section 856(e)(1) of the Code) so acquired by such Servicer; or
(ii) such Servicer shall have requested and received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of its Servicer Custodial Account), to the effect that the holding of such personal property by the related REMIC will not cause the imposition of a tax under the REMIC Provisions on any REMIC related to the Trust or cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.
Appears in 2 contracts
Samples: Trust Agreement (Saxon Asset Securities Co), Trust Agreement (Saxon Asset Securities Co)
Title, Management and Disposition of REO Properties. (a) If any Mortgaged Premises becomes an REO Property, the Master Servicer shall use its best efforts to cause the Servicer of the related Mortgage Loan to manage, conserve, protect and operate such REO Property for the benefit of the Certificateholders solely for the purpose of its prompt disposition and sale. If one or more REMIC elections are made with respect to the assets of the Trust, the Master Servicer shall use its best efforts to cause the Servicer to use its best efforts to dispose of any REO Property for its fair market value within twenty-two months of its acquisition by the Trust, unless the Trustee has been granted an extension of time to dispose of such REO Property by the Internal Revenue Service pursuant to section 856(c)(3) of the Code (an "Extension"). If the Trustee has been granted an Extension, the Master Servicer shall continue to use its best efforts to have the Servicer sell the REO Property for its fair market value for the period ending two months prior to the time such Extension expires (the "Extended Period"). If the Servicer is unable to dispose of any REO Property within such twenty-two-month period or Extended Period, as the case may be, the Master Servicer shall use its best efforts to ensure that such REO Property is auctioned to the highest bidder within one month after the end of such twenty-two-month period or Extended Period, as the case may be. If no REMIC election has been or is to be made with respect to the assets of the Trust, the time period for disposing of any REO Property as specified in the preceding two sentences shall be within eleven months of its acquisition by the Trust. In the event of any such sale or auction of an REO Property, the Trustee shall, at the written request of the Master Servicer and upon being provided with appropriate forms therefor, within five Business Days of its receipt of the proceeds of such sale or auction, release or cause to be released to the purchaser the related Trustee Mortgage Loan File and Servicer File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the purchaser title to the REO Property, and upon so doing the Trustee shall have no further responsibility with regard to such Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquired, the deed or certificate of sale shall be issued to the Trustee for the benefit of the Certificateholders. Each Servicer shall, in accordance with Section 3.08(a) hereof, use its reasonable efforts to sell any REO Property as expeditiously as possible, but in any event within the time period, and subject to the conditions set forth in Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each Servicer shall either itself, or through an agent selected by it, protect and conserve such REO Property in the same manner and to the same extent as it customarily does in connection with its own real estate acquired through foreclosure or by deed in lieu of foreclosure, incident to its conservation and protection of the interests of the Certificateholders, and may rent such REO Property, or any part thereof, as it deems likely to increase the net proceeds distributable to the Certificateholders, subject to the terms and conditions described in this Section 3.08. For the purpose of protecting the interests of the Trustee and conserving any REO Property prior to sale, the Servicer of the related Mortgage Loan may contract with any Independent Contractor for the conservation, protection and rental of such REO Property, provided that:
(i) the terms and conditions of any such contract may not be inconsistent herewith;
(ii) any such contract shall require, or shall be administered to require, that the Independent Contractor (A) pay all costs and expenses incurred in connection with the operation and management of such REO Property, (B) hold all related revenues in a segregated account insured by the Federal Deposit Insurance Corporation and (C) remit all related revenues collected (net of such costs and expenses retained by such Independent Contractor) to the Servicer on a monthly or more frequent basis; and
(iii) none of the provisions of this Section 3.08 relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Servicer of any of its duties and obligations to the Trustee and the Certificateholders with respect to the conservation, protection and rental of such REO Property. A Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. A Servicer or any Independent Contractor shall be entitled to a fee, based on the prevailing market rate (and set in good faith at a reasonable level in the case of a fee payable to a Servicer), for the operation and management of any REO Property, which fee shall be an expense of the Trust payable out of the gross income on such REO Property.
(c) A Servicer shall deposit all funds collected and received in connection with the operation of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be entitled to be reimbursed for any unreimbursed Advances and paid any unpaid Servicing Fees with respect to the related Mortgage Loan from the Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, however, that any such unreimbursed Advances or unpaid Servicing Fees may be reimbursed or paid, as the case may be, out of any net rental income or other net amounts derived from such REO Property.
(e) The final disposition of any REO Property shall be carried out by a Servicer at the fair market value of such REO Property under the circumstances existing at the time of disposition and upon such terms and conditions as such Servicer shall deem necessary or advisable and as are in accordance with accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final disposition of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such Liquidation Proceeds and, subject to such withdrawals as may be permitted by Section 3.08(d) hereof, such proceeds shall be transferred to the Asset Proceeds Account pursuant to Section 3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer, acting on behalf of the Trustee, shall not rent, lease or otherwise earn income or take any action on behalf of the Trust with respect to any REO Property that might (i) cause such REO Property to fail to qualify as "foreclosure property" within the meaning of section 86OG(a)(8) of the Code or (ii) result in the receipt by the REMIC of any "income from non-permitted assets" within the meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure property" within the meaning of section 860G(c)(2) of the Code, both of which types of income are subject to tax under the REMIC Provisions, unless the Trustee has received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of such Servicer's Servicer Custodial Account), to the effect that, under the REMIC Provisions and any relevant proposed legislation, any income generated for any related REMIC by such REO Property would not result in the imposition of a tax upon such REMIC. Without limiting the generality of the foregoing, neither the Trustee, the Master Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any REO Property if the New Lease by its terms will give rise to any income that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property, other than the completion of a building or other improvement thereon and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly Operate, any REO Property on any date more than 90 days after its acquisition date (unless the Person who would Directly Operate such REO Property is an Independent Contractor); unless, in any such case, the Person proposing to take such action has requested and received the Opinion of Counsel described in the preceding sentence, in which case the Person may take such actions as are specified in such Opinion of Counsel. A Servicer shall not acquire any personal property relating to any Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property (within the meaning of section 856(e)(1) of the Code) so acquired by such Servicer; or
(ii) such Servicer shall have requested and received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of its Servicer Custodial Account), to the effect that the holding of such personal property by the related REMIC will not cause the imposition of a tax under the REMIC Provisions on any REMIC related to the Trust or cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.may
Appears in 1 contract
Title, Management and Disposition of REO Properties. (a) If any title to a Mortgaged Premises becomes an REO Property, the Master Servicer shall use its best efforts to cause the Servicer of the related Mortgage Loan to manage, conserve, protect and operate such REO Property for the benefit of the Certificateholders solely for the purpose of its prompt disposition and sale. If one or more REMIC elections are made with respect to the assets of the Trust, the Master Servicer shall use its best efforts to cause the Servicer to use its best efforts to dispose of any REO Property for its fair market value within twenty-two months of its acquisition by the Trust, unless the Trustee has been granted an extension of time to dispose of such REO Property by the Internal Revenue Service pursuant to section 856(c)(3) of the Code (an "Extension"). If the Trustee has been granted an Extension, the Master Servicer shall continue to use its best efforts to have the Servicer sell the REO Property for its fair market value for the period ending two months prior to the time such Extension expires (the "Extended Period"). If the Servicer is unable to dispose of any REO Property within such twenty-two-month period or Extended Period, as the case may be, the Master Servicer shall use its best efforts to ensure that such REO Property is auctioned to the highest bidder within one month after the end acquired in foreclosure or by deed in lieu of such twenty-two-month period or Extended Period, as the case may be. If no REMIC election has been or is to be made with respect to the assets of the Trust, the time period for disposing of any REO Property as specified in the preceding two sentences shall be within eleven months of its acquisition by the Trust. In the event of any such sale or auction of an REO Property, the Trustee shall, at the written request of the Master Servicer and upon being provided with appropriate forms therefor, within five Business Days of its receipt of the proceeds of such sale or auction, release or cause to be released to the purchaser the related Trustee Mortgage Loan File and Servicer File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the purchaser title to the REO Property, and upon so doing the Trustee shall have no further responsibility with regard to such Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquiredforeclosure, the deed or certificate of sale shall be issued taken in the name of MLCC. The Subservicer shall not cause title to be acquired to any Mortgaged Property, or proceed with the Trustee for the benefit management of the Certificateholders. Each Servicer shall, in accordance with Section 3.08(a) hereof, use its reasonable efforts to sell any REO Property as expeditiously as possible, but in any event within the time period, and subject to the conditions set forth in Section 3.08(a) hereof. Pursuant to its efforts to sell any REO Property, each for which the Subservicer has Knowledge that such Mortgaged Property or REO Property is affected by hazardous waste, but shall promptly notify the Servicer of such condition, and thereafter follow such reasonable directions as the Servicer may provide. The Subservicer shall either itself, or through an agent selected approved by itthe Servicer (which approval shall not be unreasonably withheld), manage, conserve, protect and conserve operate each REO Property (and may temporarily rent the same) in accordance with the Servicer’s direction.
(b) The income received from the management of any REO property shall be deposited in the Custodial Account and shall be applied as a reduction in any existing subservicer advances for the related REO property or placed in suspense for the related property within two (2) Business Days of receipt.
(c) If the Subservicer elects to dispose of an REO Property without utilizing the services of an agent, the Subservicer shall notify the Servicer of its receipt of any and all bona fide offers to purchase that REO Property. Each such REO Property in Disposition shall be carried out by the same manner and to the same extent as it customarily does in connection with its own real estate acquired through foreclosure or by deed in lieu of foreclosure, incident to its conservation and protection of the interests of the CertificateholdersSubservicer at such price, and may rent upon such terms and conditions, as the Servicer shall approve in writing.
(d) If the Subservicer utilizes the services of an approved agent to dispose of an REO Property, the Subservicer shall provide the Servicer with a copy of such agent’s marketing plan, which shall include, but not be limited to, (i) the marketing time period, (ii) an estimate of the costs of any repairs or improvements, (iii) the lowest acceptable sale price for the REO Property and (iv) other proposed terms and conditions of sale. Within seven (7) Business Days after receipt of any part thereofsuch marketing plan, the Servicer shall review the plan and notify the Subservicer in writing as it deems likely to increase the net proceeds distributable to the Certificateholders, subject to whether the terms and conditions described in this Section 3.08thereof are acceptable to the Servicer. For Notwithstanding the purpose of protecting foregoing, the interests Servicer’s failure to provide such written notification to the Subservicer within such seven (7) Business Day period shall not be deemed acceptance of the Trustee marketing plan. If the terms, conditions, and conserving any lowest acceptable sale price set forth in the marketing plan are acceptable to the Servicer, the REO Disposition shall be carried out by the Subservicer in accordance with the terms thereof. If the Subservicer receives a bona fide offer to purchase an REO Property prior and would like to saleaccept the offer, but the offer is outside the parameters of the approved marketing plan, the Subservicer shall provide the Servicer with written notification of the related Mortgage Loan may contract with any Independent Contractor for the conservation, protection and rental of such REO Property, provided that:
(i) the terms and conditions of any the offer. Within seven (7) Business Days after receiving the terms and conditions of such contract may offer, the Servicer shall review the offer and notify the Subservicer in writing as to whether such terms and conditions are acceptable to the Servicer. Notwithstanding the foregoing, the Servicer’s failure to provide such written notification to the Subservicer within such seven (7) Business Day period shall not be inconsistent herewith;
(ii) any such contract shall require, or shall be administered to require, that the Independent Contractor (A) pay all costs and expenses incurred in connection with the operation and management of such REO Property, (B) hold all related revenues in a segregated account insured by the Federal Deposit Insurance Corporation and (C) remit all related revenues collected (net of such costs and expenses retained by such Independent Contractor) to the Servicer on a monthly or more frequent basis; and
(iii) none deemed acceptance of the provisions of this Section 3.08 relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Servicer of any of its duties and obligations to the Trustee and the Certificateholders with respect to the conservation, protection and rental of such REO Property. A Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. A Servicer or any Independent Contractor shall be entitled to a fee, based on the prevailing market rate (and set in good faith at a reasonable level in the case of a fee payable to a Servicer), for the operation and management of any REO Property, which fee shall be an expense of the Trust payable out of the gross income on such REO Property.
(c) A Servicer shall deposit all funds collected and received in connection with the operation of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be entitled to be reimbursed for any unreimbursed Advances and paid any unpaid Servicing Fees with respect to the related Mortgage Loan from the Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, however, that any such unreimbursed Advances or unpaid Servicing Fees may be reimbursed or paid, as the case may be, out of any net rental income or other net amounts derived from such REO Propertyoffer.
(e) The final disposition of any Subservicer, upon an REO Property Disposition, shall be carried out by a Servicer at the fair market value of such REO Property under the circumstances existing at the time of disposition and upon such terms and conditions as such Servicer shall deem necessary or advisable and as are in accordance with accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final disposition of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such Liquidation Proceeds and, subject entitled to such withdrawals as may be permitted by Section 3.08(d) hereof, such proceeds shall be transferred to the Asset Proceeds Account pursuant to Section 3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer, acting on behalf of the Trustee, shall not rent, lease or otherwise earn income or take any action on behalf of the Trust with respect to any REO Property that might (i) cause such REO Property to fail to qualify as "foreclosure property" within the meaning of section 86OG(a)(8) of the Code or (ii) result in the receipt by the REMIC of any "income from non-permitted assets" within the meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure property" within the meaning of section 860G(c)(2) of the Code, both of which types of income are subject to tax under the REMIC Provisions, unless the Trustee has received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of such Servicer's Servicer Custodial Account), to the effect that, under the REMIC Provisions and any relevant proposed legislation, any income generated reimbursement for any related REMIC by unreimbursed Subservicer Advances from proceeds received in connection with such REO Property would not result in Disposition. If the imposition of a tax upon such REMIC. Without limiting proceeds from an REO Disposition are insufficient to reimburse the generality of the foregoing, neither the TrusteeSubservicer for any related unreimbursed Subservicer Advances, the Master Subservicer shall be entitled to reimbursement from the Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any REO Property if the New Lease by its terms will give rise to any income that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property, other than the completion submission of a building or other improvement thereon and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly Operate, any REO Property on any date more than 90 days after its acquisition date (unless the Person who would Directly Operate such REO Property is an Independent Contractor); unless, in any such case, the Person proposing to take such action has requested and received the Opinion of Counsel Officer Certificate as described in the preceding sentenceOperations Guide. All proceeds from an REO Disposition, in which case net of any reimbursement to the Person may take such actions Subservicer as are specified in such Opinion of Counsel. A Servicer shall not acquire any personal property relating to any Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property (within the meaning of section 856(e)(1) of the Code) so acquired by such Servicer; or
(ii) such Servicer shall have requested and received an Opinion of Counselprovided above, at the expense of the Trust (the costs of which shall be recoverable out of its Servicer Custodial Account), remitted to the effect that the holding of such personal property by Servicer with the related REMIC will not cause Officer Certificate as described in the imposition of a tax under the REMIC Provisions on any REMIC related to the Trust or cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate is outstandingOperations Guide.
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Title, Management and Disposition of REO Properties. (a) If any title to a Mortgaged Premises becomes an REO Property, the Master Servicer shall use its best efforts to cause the Servicer of the related Mortgage Loan to manage, conserve, protect and operate such REO Property for the benefit of the Certificateholders solely for the purpose of its prompt disposition and sale. If one or more REMIC elections are made with respect to the assets of the Trust, the Master Servicer shall use its best efforts to cause the Servicer to use its best efforts to dispose of any REO Property for its fair market value within twenty-two months of its acquisition by the Trust, unless the Trustee has been granted an extension of time to dispose of such REO Property by the Internal Revenue Service pursuant to section 856(c)(3) of the Code (an "Extension"). If the Trustee has been granted an Extension, the Master Servicer shall continue to use its best efforts to have the Servicer sell the REO Property for its fair market value for the period ending two months prior to the time such Extension expires (the "Extended Period"). If the Servicer is unable to dispose of any REO Property within such twenty-two-month period or Extended Period, as the case may be, the Master Servicer shall use its best efforts to ensure that such REO Property is auctioned to the highest bidder within one month after the end acquired in foreclosure or by deed in lieu of such twenty-two-month period or Extended Period, as the case may be. If no REMIC election has been or is to be made with respect to the assets of the Trust, the time period for disposing of any REO Property as specified in the preceding two sentences shall be within eleven months of its acquisition by the Trust. In the event of any such sale or auction of an REO Property, the Trustee shall, at the written request of the Master Servicer and upon being provided with appropriate forms therefor, within five Business Days of its receipt of the proceeds of such sale or auction, release or cause to be released to the purchaser the related Trustee Mortgage Loan File and Servicer File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be necessary to vest in the purchaser title to the REO Property, and upon so doing the Trustee shall have no further responsibility with regard to such Trustee Mortgage Loan File or Servicer File. Neither the Trustee, the Master Servicer nor the Servicer, acting on behalf of the Trust, shall provide financing from the Trust to any purchaser of an REO Property.
(b) If title to any REO Property is acquiredforeclosure, the deed or certificate of sale shall be issued to taken in the Trustee for the benefit name of the Certificateholders. Each Servicer shallapplicable Private Investor (unless otherwise directed by the Private Investor), or in accordance with Section 3.08(a) hereof, use its reasonable efforts to sell any REO Property as expeditiously as possible, but in any event within the time period, and name of MLCC if the Mortgage Loan is subject to a Pooling and Servicing Agreement. The Servicer shall not cause title to be acquired to any Mortgaged Property, or proceed with the conditions set forth in Section 3.08(a) hereof. Pursuant to its efforts to sell management of any REO Property, each for which the Subservicer has Knowledge that such Mortgaged Property or REO Property is affected by hazardous waste, but shall promptly notify the Servicer of such condition, and thereafter follow such reasonable directions as the Servicer may provide. The Subservicer shall either itself, or through an agent selected approved by itthe Servicer (which approval shall not be unreasonably withheld), manage, conserve, protect and conserve operate each REO Property (and may temporarily rent the same) in accordance with the Servicer’s direction.
(b) The income received from the management of any REO Property shall be applied as a reduction in any existing Subservicing Advance for the related REO property or as a credit balance to the Subservicing Advance for the related property within one (1) Business Day of receipt.
(c) If the Subservicer elects to dispose of an REO Property without utilizing the services of an agent, the Subservicer shall notify the Servicer of its receipt of any and all bona fide offers to purchase that REO Property. Each such REO Property in Disposition shall be carried out by the same manner and to the same extent as it customarily does in connection with its own real estate acquired through foreclosure or by deed in lieu of foreclosure, incident to its conservation and protection of the interests of the CertificateholdersSubservicer at such price, and may rent upon such terms and conditions, as the Servicer shall approve in writing.
(d) If the Subservicer utilizes the services of an approved agent to dispose of an REO Property, the Subservicer shall provide the Servicer with a copy of such agent’s marketing plan, which shall include, but not be limited to, (i) the marketing time period, (ii) an estimate of the costs of any repairs or improvements, (iii) the lowest acceptable sale price for the REO Property and (iv) other proposed terms and conditions of sale. Within seven (7) Business Days after receipt of any part thereofsuch marketing plan, the Servicer shall review the plan and notify the Subservicer in writing as it deems likely to increase the net proceeds distributable to the Certificateholders, subject to whether the terms and conditions described in this Section 3.08thereof are acceptable to the Servicer. For Notwithstanding the purpose of protecting foregoing, the interests Servicer’s failure to provide such written notification to the Subservicer within such seven (7) Business Day period shall not be deemed acceptance of the Trustee marketing plan. If the terms, conditions, and conserving any lowest acceptable sale price set forth in the marketing plan are acceptable to the Servicer, the REO Disposition shall be carried out by the Subservicer in accordance with the terms thereof. If the Subservicer receives a bona fide offer to purchase an REO Property prior and would like to saleaccept the offer, but the offer is outside the parameters of the approved marketing plan, the Subservicer shall provide the Servicer with written notification of the related Mortgage Loan may contract with any Independent Contractor for the conservation, protection and rental of such REO Property, provided that:
(i) the terms and conditions of any the offer. Within seven (7) Business Days after receiving the terms and conditions of such contract may offer, the Servicer shall review the offer and notify the Subservicer in writing as to whether such terms and conditions are acceptable to the Servicer. Notwithstanding the foregoing, the Servicer’s failure to provide such written notification to the Subservicer within such seven (7) Business Day period shall not be inconsistent herewith;
(ii) any such contract shall require, or shall be administered to require, that the Independent Contractor (A) pay all costs and expenses incurred in connection with the operation and management of such REO Property, (B) hold all related revenues in a segregated account insured by the Federal Deposit Insurance Corporation and (C) remit all related revenues collected (net of such costs and expenses retained by such Independent Contractor) to the Servicer on a monthly or more frequent basis; and
(iii) none deemed acceptance of the provisions of this Section 3.08 relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Servicer of any of its duties and obligations to the Trustee and the Certificateholders with respect to the conservation, protection and rental of such REO Property. A Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. A Servicer or any Independent Contractor shall be entitled to a fee, based on the prevailing market rate (and set in good faith at a reasonable level in the case of a fee payable to a Servicer), for the operation and management of any REO Property, which fee shall be an expense of the Trust payable out of the gross income on such REO Property.
(c) A Servicer shall deposit all funds collected and received in connection with the operation of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such funds.
(d) A Servicer, upon the final disposition of any REO Property, shall be entitled to be reimbursed for any unreimbursed Advances and paid any unpaid Servicing Fees with respect to the related Mortgage Loan from the Liquidation Proceeds received in connection with the final disposition of such REO Property; provided, however, that any such unreimbursed Advances or unpaid Servicing Fees may be reimbursed or paid, as the case may be, out of any net rental income or other net amounts derived from such REO Propertyoffer.
(e) The final disposition of any Subservicer, upon an REO Property Disposition, shall be carried out by a Servicer at the fair market value of such REO Property under the circumstances existing at the time of disposition and upon such terms and conditions as such Servicer shall deem necessary or advisable and as are in accordance with accepted servicing practices and in accordance with Section 3.08(a) hereof.
(f) A Servicer shall deposit the Liquidation Proceeds from the final disposition of any REO Property in its Servicer Custodial Account on or before the second Business Day following receipt of such Liquidation Proceeds and, subject entitled to such withdrawals as may be permitted by Section 3.08(d) hereof, such proceeds shall be transferred to the Asset Proceeds Account pursuant to Section 3.01(c) hereof.
(g) A Servicer shall prepare and file reports of foreclosure and abandonment in accordance with section 6050J of the Code.
(h) Notwithstanding any other provision of this Agreement, a Servicer, acting on behalf of the Trustee, shall not rent, lease or otherwise earn income or take any action on behalf of the Trust with respect to any REO Property that might (i) cause such REO Property to fail to qualify as "foreclosure property" within the meaning of section 86OG(a)(8) of the Code or (ii) result in the receipt by the REMIC of any "income from non-permitted assets" within the meaning of section 86OF(a)(2) of the Code or any "net income from foreclosure property" within the meaning of section 860G(c)(2) of the Code, both of which types of income are subject to tax under the REMIC Provisions, unless the Trustee has received an Opinion of Counsel, at the expense of the Trust (the costs of which shall be recoverable out of such Servicer's Servicer Custodial Account), to the effect that, under the REMIC Provisions and any relevant proposed legislation, any income generated reimbursement for any related REMIC by unreimbursed Subservicer Advances from proceeds received in connection with such REO Property would not result in Disposition. If the imposition of a tax upon such REMIC. Without limiting proceeds from an REO Disposition are insufficient to reimburse the generality of the foregoing, neither the TrusteeSubservicer for any related unreimbursed Subservicer Advances, the Master Subservicer shall be entitled to reimbursement from the Servicer nor a Servicer shall knowingly:
(i) enter into, renew or extend any New Lease with respect to any REO Property if the New Lease by its terms will give rise to any income that does not constitute Rents From Real Property;
(ii) permit any amount to be received or accrued under any New Lease other than amounts that will constitute Rents From Real Property;
(iii) authorize or permit any construction on any REO Property, other than the completion submission of a building or other improvement thereon and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of section 856(e)(4)(B) of the Code; or
(iv) Directly Operate, or allow any other Person to Directly Operate, any REO Property on any date more than 90 days after its acquisition date (unless the Person who would Directly Operate such REO Property is an Independent Contractor); unless, in any such case, the Person proposing to take such action has requested and received the Opinion of Counsel Officer Certificate as described in the preceding sentenceOperations Guide. All proceeds from an REO Disposition, in which case net of any reimbursement to the Person may take such actions Subservicer as are specified in such Opinion of Counsel. A Servicer shall not acquire any personal property relating to any Mortgage Loan pursuant to this Section 3.08 unless either:
(i) such personal property is incident to real property (within the meaning of section 856(e)(1) of the Code) so acquired by such Servicer; or
(ii) such Servicer shall have requested and received an Opinion of Counselprovided above, at the expense of the Trust (the costs of which shall be recoverable out of its Servicer Custodial Account), remitted to the effect that the holding of such personal property by Servicer with the related REMIC will not cause Officer Certificate as described in the imposition of a tax under the REMIC Provisions on any REMIC related to the Trust or cause any such REMIC to fail to qualify as a REMIC at any time that any Certificate is outstandingOperations Guide.
Appears in 1 contract
Samples: Subservicing Agreement (PHH Corp)
