Exhibit 99.8c
Execution Copy
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
and
XXXXX FARGO BANK, N.A.
Company
___________________________________________
SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of December 1, 2005
___________________________________________
Adjustable Rate Mortgage Loans
WFHM Mortgage Loan Series 2005-W102
TABLE OF CONTENTS
ARTICLE I......................................................................1
DEFINITIONS....................................................................1
ARTICLE II....................................................................13
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS....................................13
ARTICLE III...................................................................18
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH............................18
ARTICLE IV....................................................................35
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................35
ARTICLE V.....................................................................52
PAYMENTS TO PURCHASER.........................................................52
ARTICLE VI....................................................................54
GENERAL SERVICING PROCEDURES..................................................54
ARTICLE VII...................................................................60
COMPANY TO COOPERATE..........................................................60
ARTICLE VIII..................................................................61
THE COMPANY...................................................................61
ARTICLE IX....................................................................63
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT......................................63
ARTICLE X.....................................................................73
DEFAULT.......................................................................73
ARTICLE XI....................................................................76
TERMINATION...................................................................76
ARTICLE XII...................................................................76
MISCELLANEOUS PROVISIONS......................................................76
EXHIBITS
Exhibit A Mortgage Loan Schedule
(WFHM 2005-W102)
Exhibit B Contents of Each Mortgage File
Exhibit C Custodial Agreement
Exhibit D Form of Assignment, Assumption and
Recognition Agreement
Exhibit E Form of Xxxxxxxx-Xxxxx Certification
Exhibit F Data File
Exhibit G Form of Indemnification Agreement
Exhibit H Form of Company Officer's Certificate
Exhibit I Form of Opinion of Counsel
Exhibit J Servicing Criteria to be addressed in
the Assessment of Compliance
This is a Seller's Warranties and Servicing Agreement for adjustable
rate residential first mortgage loans, dated and effective as of December 1,
2005, and is executed between Xxxxxx Xxxxxxx Mortgage Capital Inc. as
purchaser (the "Purchaser"), and Xxxxx Fargo Bank, N.A., as seller and
servicer (the "Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser certain first lien adjustable rate
mortgage loans which have an aggregate outstanding principal balance, as
indicated on the Mortgage Loan Schedule, as of the close of business on the
Cut-off Date, after deduction of payments due on or before such date, which
are annexed hereto as Exhibit A;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a one- to four-family first lien
on a residential dwelling located in the jurisdictions indicated on the
Mortgage Loan Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of
the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Company agree
as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
content otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
customary mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as the Mortgage
Loans in the jurisdiction where the related Mortgaged Property is located.
Adjustment Date: As to each adjustable rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of
the related Mortgage Note and Mortgage.
Affiliate: Of any person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such person. For the purposes of this definition, the term "control" when used
with respect to any Person means the power to direct the management and
policies of such Person directly or indirectly, whether thorough the ownership
of voting securities, by contract or otherwise.
Agency/Agencies: Xxxxxx Xxx, Xxxxxxx Mac or GNMA, or any of them as
applicable.
Agency Sale: Any sale or transfer of some or all of the Mortgage Loans
by the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Seller's Warranties and Servicing Agreement and all
exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i)
the value set forth on the appraisal made in connection with the origination
of the related Mortgage Loan as to the value of the related Mortgaged
Property, or (ii) the purchase price paid for the Mortgaged Property;
provided, however, that in the case of a refinanced Mortgage Loan, such value
shall be based solely on the appraisal made in connection with the origination
of such Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser or its designated assignee,
or if the related Mortgage has been recorded in the name of MERS or its
designee, such actions as are necessary to cause the Purchaser to be shown as
the owner of the related Mortgage on the records of MERS for purposes of the
system or recording transfers of beneficial ownership of mortgages maintained
by MERS.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the State of Iowa, the
State of California, the State of Maryland or the State of New York are
authorized or obligated by law or executive order to be closed.
Buydown Agreement: An agreement between the Company and a Mortgagor, or
an agreement among the Company, a Mortgagor and a seller of a Mortgaged
Property or a third party with respect to a Mortgage Loan which governs the
payment by such Mortgagor, seller or third party of, and the application of
Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown
Mortgage Loan, the buyer of such property, the Company or any other source,
plus interest earned thereon, in order to enable the Mortgagor to reduce the
payments required to be made from the Mortgagor's funds in the early years of
a Mortgage Loan.
2
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant
to a Buydown Agreement, (i) the Mortgagor pays less than the full monthly
payments specified in the Mortgage Note for a specified period, and (ii) the
difference between the payments required under such Buydown Agreement and the
Mortgage Note is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
Closing Date: December 19, 2005.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: The commitment letter from the Purchaser to the
Company dated as of November 1, 2005.
Company: Xxxxx Fargo Bank, N.A., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.
Company Certification: The certification delivered by the Company in a
form substantially similar to Exhibit H of this Agreement.
Company Information: As defined in Section 9.01(g)(i)(A).
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6c,
Appendix E, revised August 1, 2005.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which is annexed hereto as Exhibit C.
3
Custodian: The custodian under the Custodial Agreement, or its successor
in interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: December 1, 2005.
Data File: The electronic data file prepared by the Company and
delivered to the Purchaser, including the data fields set forth on Exhibit F
with respect to each Mortgage Loan.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the
Company in accordance with the terms of this Agreement and which is, in the
case of a substitution pursuant to Section 3.03, replaced or to be replaced
with a Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The first day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month preceding the month in which the related
Remittance Date occurs ending on the first day of the month in which the
related Remittance Date occurs.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
related document.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
4
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant
to Section 4.12.
First Remittance Date: January 18, 2006.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which is added
to the Index in order to determine the related Mortgage Interest Rate, as set
forth in the Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, (b) a "high cost
home," "threshold," "covered,", "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a Mortgage Loan
categorized as "High Cost" pursuant to the Standard & Poor's Glossary for File
Format for LEVELS(R) Version 5.6c, Appendix E, revised August 1, 2005.
Index: With respect to any adjustable rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, including, without limitation, LPMI Proceeds, if applicable.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI Policy for
which the Company pays all premiums from its own funds, without reimbursement
therefor.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale, sale of REO property or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio
of the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.
LPMI Proceeds: Proceeds of any Lender Paid Mortgage Insurance Policy.
Maximum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, the absolute Maximum Mortgage Interest Rate set forth in the
related Mortgage Note.
5
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each adjustable rate
Mortgage Loan, the absolute Minimum Mortgage Interest Rate set forth in the
related Mortgage Note.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the
Determination Date that is required to be advanced by the Company pursuant to
Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan or in the case of an Interest Only Mortgage Loan, payments
of interest, on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the Custodial
Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual mortgage loan which is the subject of this
Agreement and identified on the Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
6
Mortgage Loan Documents: : With respect to a Mortgage Loan, the
documents listed as items 1 through 10 of Exhibit B attached hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest to be remitted to the Purchaser, which shall be equal
to the related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Exhibit A, such schedule setting forth the following information with respect
to each Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city,
state and zip code of the Mortgaged Property; (3) a code indicating whether
the Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, planned unit development or
condominium; (4) the current Mortgage Interest Rate; (5) the Servicing Fee
Rate; (6) the current Monthly Payment; (7) the original term to maturity; (8)
the scheduled maturity date; (9) the principal balance of the Mortgage Loan as
of the Cut-off Date after deduction of payments of principal due on or before
the Cut-off Date whether or not collected; (10) the Loan-to-Value Ratio; (11)
the due date of the Mortgage Loan; (12) whether the Mortgage Loan is
convertible or not; (13) a code indicating the mortgage guaranty insurance
company; (14) with respect to each MERS Mortgage Loan, the MIN; and (15) with
respect to each adjustable rate Mortgage Loan, (a) the first Adjustment Date
and the Adjustment Date frequency; (b) the Gross Margin; (c) the Maximum
Mortgage Interest Rate under the terms of the Mortgage Note; (d) the Minimum
Mortgage Interest Rate under the terms of the Mortgage Note; (e) the Periodic
Rate Cap; (f) the first Adjustment Date immediately following the related Cut
off Date; and (g) the Index.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board
or the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement, a form of which is
attached hereto as Exhibit H.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each adjustable rate Mortgage Loan,
the maximum increase or decrease in the Mortgage Interest Rate on any
Adjustment Date pursuant to the terms of the Mortgage Note.
7
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by
an electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The
premiums on a PMI Policy may be paid by the Mortgagor or by the Company from
its own funds, without reimbursement. If the premiums are paid by the Company,
the PMI Policy is an LPMI Policy.
Prime Rate: The prime rate announced to be in effect from time to time,
as published as the average rate in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Purchase Price: The purchase price specified in the Commitment Letter.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company
and such Person that contemplated that such Person would underwrite mortgage
loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Company within 180 days after origination; (iii)
either (x) the Designated Guidelines were, at the time such Mortgage Loans
were originated, used by the Company in origination of mortgage loans of the
same type as the Mortgage Loans for the Company's own account or (y) the
Designated Guidelines were, at the time such Mortgage Loans were underwritten,
designated by the Company on a consistent basis for use by lenders in
originating mortgage loans to be purchased by the Company; and (iv) the
Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchased or post-purchased quality assurance procedures (which
may involve, among other things, review of a sample of mortgage loans
purchased during a particular time period or through particular channels)
designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Company.
8
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by Standard & Poor's Ratings Services or
Prime-1 by Xxxxx'x Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company)
at the time any deposits are held on deposit therein; provided, however, that
in the event any of the Mortgage Loans are subject to a Pass Through Transfer,
the Company agrees that the holding company or other entity which maintains
any accounts subject to this definition, shall satisfy the rating requirements
established by any Rating Agency which rates securities issued as part of the
Pass Through Transfer.
Qualified Insurer: An insurance company duly authorized and licensed
where required by law to transact mortgage guaranty insurance business and
approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Loan
Remittance Rate not less than, and not more than two percent (2%) greater,
than the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii)
have a remaining term to maturity not greater than and not more than one year
less than that of the Deleted Mortgage Loan; (iv) be of the same type as the
Deleted Mortgage Loan and (v) comply with each representation and warranty set
forth in Sections 3.01 and 3.02.
Rating Agency: Xxxxx'x Investors Service, Inc., Standard & Poor's
Ratings Group, a division of The XxXxxx-Xxxx Companies, Fitch, Inc. (doing
business as "Fitch Ratings"), or any other nationally recognized statistical
credit rating agency rating any security issued in connection with any
Securitization Transaction.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties with respect to any
or all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan Transfer or Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of an Agency Sale, Securitization Transaction or Whole
Loan Transfer pursuant to Section 9.01 hereof. The Reconstitution Date shall
be such date which the Purchaser shall designate.
9
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the immediately preceding Business Day) of any month, beginning with the
First Remittance Date.
Remittance Report Date: The 10th day (or if such 10th day is not a
Business Day, the immediately preceding Business Day) of any month.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: Unless otherwise agreed by the Purchaser and the
Company (including without limitation as set forth in the commitment Letter),
a price equal to (i) the Stated Principal Balance of the Mortgage Loan as of
the date on which such repurchase takes place, plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the date on
which interest has last been paid and distributed to the Purchaser through the
last day of the month in which such repurchase takes place, less amounts
received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of
repurchase, plus (iii) all costs and expenses incurred by the Purchaser
arising out of or based upon such breach, including without limitation costs
and expenses incurred in the enforcement of the Company's repurchase
obligation hereunder.
Sarbanes Certifying Party: A Person who files a Xxxxxxxx-Xxxxx
certification directly with the Securities and Exchange Commission, pursuant
to the Xxxxxxxx-Xxxxx Act of 2002.
Securities Act: The Securities Act of 1933, as amended.
10
Securitization Transaction: Any transaction involving either (a) a sale
or other transfer of some or all of the Mortgage Loans directly or indirectly
to an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (b) an
issuance of publicly offered or privately placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Servicemembers Civil Relief Act: The Servicemembers Civil Relief Act of
2003 (50 U.S.C. App xx.xx. 501-596).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, restoration and protection of the Mortgaged Property, (b)
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period
of one full month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the unpaid principal balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount
and period respecting which any related interest payment on a Mortgage Loan is
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: 0.250% per annum per Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Mortgage File
which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in the Custodial Agreement the originals of which are
delivered to the Custodian pursuant to Section 2.03.
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan on the Cut-off Date (and thereafter the related
Due Date) after giving effect to payments of principal due on or before such
date, whether or not received, minus (ii) all amounts
11
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion
of the material servicing functions required to be performed by the Company
under this Agreement or any Reconstitution Agreement that are identified in
Item 1122(d) of Regulation AB.
Subsidy Account: An account maintained by the Company specifically to
hold all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by
the employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being
provided by the employer of the Mortgagor. Each Subsidy Loan will be
identified as such in the related Data File.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company serviced loan with minimal documentation.
Underwriting Guidelines: The underwriting guidelines of the Company, as
provided by the Company to the Purchaser.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Securitization Transaction or an Agency Sale.
12
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, simultaneously with the execution and delivery of this
Agreement, does hereby and thereby sell, transfer, assign, set over and convey
to the Purchaser, without recourse, but subject to the terms of this
Agreement, all the right, title and interest of the Company in and to the
Mortgage Loans. Pursuant to Section 2.03, the Company has delivered the
Mortgage Loan Documents to the Custodian.
In addition to the documents delivered to the Custodian, the Company
shall maintain a Servicing File consisting of a copy of the contents of each
Mortgage File and the originals of the documents in each Mortgage File not
delivered to the Custodian. The possession of each Servicing File by the
Company is at the will of the Purchaser for the sole purpose of servicing the
related Mortgage Loan, and such retention and possession by the Company is in
a custodial capacity only. Upon the sale of the Mortgage Loans to the
Purchaser pursuant to the Commitment Letter and this Agreement, the ownership
of each Mortgage Note, the related Mortgage and the related Mortgage File and
Servicing File shall vest immediately in the Purchaser, and the ownership of
all records and documents with respect to the related Mortgage Loan prepared
by or which come into the possession of the Company shall vest immediately in
the Purchaser and shall be retained and maintained by the Company, in trust,
at the will of the Purchaser and only in such custodial capacity. The Company
shall release its custody of the contents of any Servicing File only in
accordance with written instructions from the Purchaser, unless such release
is required as incidental to the Company's servicing of the Mortgage Loans or
is in connection with a repurchase or satisfaction of any Mortgage Loan
pursuant to Section 3.03 or 6.02. All such costs associated with the release,
transfer and re-delivery of any Mortgage Files and Servicing Files between the
parties shall be the responsibility of the party in possession of such file or
files.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Company agrees that it will cause the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Company to the Purchaser in
accordance with this Agreement by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this Agreement) in
such computer files the information required by the MERS(R) System to identify
the Purchaser as beneficial owner of such Mortgage Loans. Prior to the
assignment of any MERS Mortgage Loan, the Purchaser will provide the Company
with Purchaser's MERS registration number. The Company further agrees that it
will not alter the information referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
13
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all
rights arising out of the Mortgage Loans, including, but not limited to, all
funds received on or in connection with the Mortgage Loans, shall be received
and held by the Company in trust for the benefit of the Purchaser as owner of
the Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the
supervision of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's
balance sheet and other financial statements as a sale of assets by the
Company. The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be
marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Company shall maintain in its possession,
available for inspection by the Purchaser, or its designee, and shall deliver
to the Purchaser upon demand, evidence of compliance with all federal, state
and local laws, rules and regulations, and requirements of Xxxxxx Xxx or
Xxxxxxx Mac, including but not limited to documentation as to the method(s)
used in determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to each Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by Xxxxxx Mae or Xxxxxxx Mac and records of periodic inspections as
required by Section 4.13. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Company may be in the form of microfilm,
microfiche, optical imagery techniques or such other reliable means of
recreating original documents, so long as the Company complies with the
requirements of the Xxxxxx Mae or Xxxxxxx Mac Selling and Servicing Guide, as
amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
The Company shall keep at its servicing office books and records in
which the Company shall note transfers of Mortgage Loans. No transfer of a
Mortgage Loan may be made unless such transfer is effected in compliance with
the terms hereof. For the purposes of this Agreement, the Company shall be
under no obligation to deal with any Person with respect to this Agreement or
the Mortgage Loans unless the books and records show such Person as the
Purchaser or subsequent owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans. The Purchaser also shall advise the Company of the transfer. Upon
receipt of notice of the transfer, the Company shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous owner from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. Such notification of a transfer
shall include a final loan schedule which shall be received by the Company no
fewer than five (5) Business Days before the last Business Day of the month.
If such notification is not received as specified above, the
14
Company's duties to remit and report as required by Section 5 shall begin with
the next Due Period.
Section 2.03 Custodial Agreement; Delivery of Documents.
The Company has delivered to the Custodian those Mortgage Loan Documents
as required by Exhibit B to this Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement, as
evidenced by the initial certification of the Custodian in the form annexed to
the Custodial Agreement. The Purchaser will be responsible for the fees and
expenses of the Custodian.
The Company shall forward to the Custodian original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution; provided, however, that the Company shall provide the Custodian
with a certified true copy of any such document submitted for recordation
within ten (10) days of its execution, and shall provide the original of any
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, the Company shall deliver to the Custodian within 240 days
of its submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that
the recorded document has not been delivered to the Custodian due solely to a
delay by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Company will be required to
deliver the document to the Custodian by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
Upon the Company's receipt of the Purchase Price, the Company shall
provide notification to the Custodian to release the ownership of the Mortgage
Loan Documents specified above to the Purchaser. Such notification shall be in
a form of a written notice by facsimile or other electronic media, with a copy
sent to the Purchaser. Subsequent to such release, such Mortgage Loan
Documents shall be retained by the Custodian for the benefit of the Purchaser.
Section 2.04 Examination of Mortgage Files
Prior to the Closing Date, the Company shall (a) deliver to the
Purchaser in escrow, for examination, the Mortgage File for each Mortgage
Loan, including a copy of the Assignment of Mortgage, pertaining to each
Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser for
examination at the Company's offices or such other location as shall otherwise
be agreed upon by the Purchaser and the Company. Such examination may be made
by the
15
Purchaser or by any prospective purchaser of the Mortgage Loans from the
Purchaser, at any time before or after the Closing Date upon prior reasonable
notice to the Company. The fact that the Purchaser or any prospective
purchaser of the Mortgage Loans has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided under this Agreement.
Section 2.05 Representations, Warranties and Agreements of the Company
The Company agrees and acknowledges that it shall, as a condition to the
consummation of the transactions contemplated hereby, make the representations
and warranties specified in Sections 3.01 and 3.02 as of the Closing Date. The
Company, without conceding that the Mortgage Loans are securities, hereby
makes the following additional representations, warranties and agreements
which shall be deemed to have been made as of the Closing Date: Neither the
Company nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of any Mortgage Loans, any
interest in any Mortgage Loans or any other similar security from, or
otherwise approached or negotiated with respect to any Mortgage Loans, any
interest in any Mortgage Loans or any other similar security with, any Person
in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act or
which would render the disposition of any Mortgage Loans a violation of
Section 5 of the Securities Act or require registration pursuant thereto, nor
will it act, nor has it authorized or will it authorize any Person to act, in
such manner with respect to the Mortgage Loans.
Section 2.06 Representation, Warranties and Agreement of PurchaserThe
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall
have been deemed to have been made as of the Closing Date.
(i) the Purchaser understands that the Mortgage Loans have not been
registered under the Securities Act or the securities laws of any state;
(ii) the Purchaser is acquiring the Mortgage Loans for its own account
only and not for any other person;
(iii) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks of investment in the Mortgage Loans;
(iv) the Purchaser has been furnished with all information regarding
the Mortgage Loans which it has requested from the Company; and
16
(v) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan,
any interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or
any other similar security from, or otherwise approached or negotiated
with respect to any Mortgage Loan, any interest in any Mortgage Loan or
any other similar security with, any person in any manner, or made any
general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution
of the Mortgage Loans under the Securities Act or which would render the
disposition of any Mortgage Loan a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any person to act, in
such manner with respect to the Mortgage Loans.
Section 2.07 Closing The closing for the purchase and sale of the Mortgage
Loans shall take place on the Closing Date. At the Purchaser's option, the
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree; or conducted in person, at such place as the parties
shall agree.
The closing shall be subject to each of the following conditions:
(i) all of the representations and warranties of the Company under
this Agreement shall be true and correct as of the Closing Date
and no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement;
(ii) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents as specified
in Section 2.08 of this Agreement, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the
respective terms thereof;
(iii) the Company shall have delivered and released to the Custodian all
documents required pursuant to this Agreement and the Custodial
Agreement; and
(iv) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Company on the Closing Date the Purchase Price by wire transfer of immediately
available funds to the account designated by the Company.
Section 2.08 Closing Documents With respect to the Mortgage Loans, the
closing documents shall consist of fully executed originals of the following
documents:
17
(i) this Agreement, dated as of the Cut-off Date, in two counterparts;
(ii) the Custodial Agreement, dated as of the Cut-off Date, in three
counterparts, in the form attached as Exhibit C to this Agreement;
(iii) the Mortgage Loan Schedule, one copy to be attached to each
counterpart of this Agreement, and to each counterpart of the
Custodial Agreement, as the Mortgage Loan Schedule thereto;
(iv) a receipt and certification, as required under the Custodial
Agreement;
(v) an officer's certificate of the Company substantially in the form
of Exhibit H attached hereto; and
(vi) an Opinion of Counsel of the Company, in the form of Exhibit I
hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of
the Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized,
validly existing and in good standing under the laws of the United
States and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if
the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Company, and in
any event the Company is in compliance with the laws of any such
state to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the
full power and authority to execute and deliver this Agreement and
to perform its obligations in accordance herewith; the execution,
delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this
Agreement) by the Company and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this
Agreement evidences the valid, binding and enforceable obligation
of the Company; and all
18
requisite action has been taken by the Company to make this
Agreement valid and binding upon the Company in accordance with
its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Company,
which is in the business of selling and servicing loans, and the
transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Company pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory provisions
in effect in any applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser or the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement will conflict with or result in a
breach of any of the terms, articles of incorporation or by-laws
or any legal restriction or any agreement or instrument to which
the Company is now a party or by which it is bound, or constitute
a default or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject, or impair the ability of the Purchaser to realize on the
Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional
residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for
the sound servicing of mortgage loans of the same type as the
Mortgage Loans. The Company is a HUD approved mortgagee and is in
good standing to sell mortgage loans to and service mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred,
including but not limited to a change in insurance coverage, which
would make the Company unable to comply with Xxxxxx Mae or Xxxxxxx
Mac eligibility requirements or which would require notification
to either Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee
represents reasonable compensation for servicing and administering
the Mortgage Loans and that the entire Servicing Fee shall be
treated by the Company, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
19
(f) Ability to Perform.
The Company does not believe, nor does it have any reason or cause
to believe, that it cannot perform each and every covenant
contained in this Agreement. The Company is solvent and the sale
of the Mortgage Loans will not cause the Company to become
insolvent. The sale of the Mortgage Loans is not undertaken to
hinder, delay or defraud any of the Company's creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance
or in the aggregate, may result in any material adverse change in
the business, operations, financial condition, properties or
assets of the Company, or in any material impairment of the right
or ability of the Company to carry on its business substantially
as now conducted, or in any material liability on the part of the
Company, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be
contemplated herein, or which would be likely to impair materially
the ability of the Company to perform under the terms of this
Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the
Company with this Agreement or the sale of the Mortgage Loans as
evidenced by the consummation of the transactions contemplated by
this Agreement, or if required, such approval has been obtained
prior to the Closing Date;
(i) Selection Process.
The Mortgage Loans were selected from among the outstanding
adjustable rate one- to four-family mortgage loans in the
Company's mortgage banking portfolio at the Closing Date as to
which the representations and warranties set forth in Section 3.02
could be made and such selection was not made in a manner so as to
affect adversely the interests of the Purchaser;
(j) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to
make the statements contained therein not misleading;
(k) Sale Treatment.
20
The Company has determined that the disposition of the Mortgage
Loans pursuant to this Agreement will be afforded sale treatment
for accounting and tax purposes;
(l) No Material Change.
There has been no material adverse change in the business,
operations, financial condition or assets of the Company since the
date of the Company's most recent financial statements;
(m) No Brokers' Fees.
The Company has not dealt with any broker, investment banker,
agent or other Person that may be entitled to any commission or
compensation in the connection with the sale of the Mortgage
Loans; and
(n) MERS Status.
The Company is a member of MERS in good standing.
Section 3.02 Representations and Warranties Regarding Individual Mortgage
Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule attached
hereto as Exhibit A and the information contained in the Data File
delivered to the Purchaser is true and correct;
(b) Payments Current.
All payments required to be made up to the Cut-off Date for the
Mortgage Loan under the terms of the Mortgage Note have been made
and credited. No payment under any Mortgage Loan has been 30 days
delinquent more than one time within the twelve months prior to
the Closing Date;
(c) No Outstanding Charges.
There are no defaults in complying with the terms of the Mortgage,
and all taxes, governmental assessments, insurance premiums,
leasehold payments, water, sewer and municipal charges, which
previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed
but is not yet
21
due and payable. The Company has not advanced funds, or induced,
or solicited directly or indirectly, the payment of any amount
required under the Mortgage Loan, except for interest accruing
from the date of the related Mortgage Note or date of disbursement
of the Mortgage Loan proceeds, whichever is later, to the day
which precedes by one month the Due Date of the first installment
of principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to
protect the interests of the Purchaser and which has been
delivered to the Custodian. The substance of any such waiver,
alteration or modification has been approved by the issuer of any
related PMI Policy or LPMI Policy and the title insurer, to the
extent required by the policy, and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole
or in part, except in connection with an assumption agreement
approved by the issuer of any related PMI Policy or LPMI Policy
and the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage File delivered
to the Custodian and the terms of which are reflected in the
Mortgage Loan Schedule;
(e) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of
the Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(f) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not
been released from the lien of the Mortgage, in whole or in part,
nor has any instrument been executed that would effect any such
satisfaction, release, cancellation, subordination or rescission;
(g) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation of
the maker thereof enforceable in
22
accordance with its terms. All parties to the Mortgage Note and
the Mortgage had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note and the Mortgage, and
the Mortgage Note and the Mortgage have been duly and properly
executed by such parties.
(h) No Fraud.
No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place
on the part of the Company, or the Mortgagor, or to the best of
Company's knowledge, any appraiser, any builder, or any developer,
or any other party involved in the origination of the Mortgage
Loan or in the application of any insurance in relation to such
Mortgage Loan;
(i) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal
credit opportunity, disclosure, or predatory and abusive lending
laws applicable to the Mortgage Loan have been complied with. All
inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same,
including, but not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from the
appropriate authorities;
(j) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the
Mortgage Loan Schedule and consists of a contiguous parcel of real
property with a detached single family residence erected thereon,
or a two- to four-family dwelling, or an individual condominium
unit in a condominium project, or an individual unit in a planned
unit development or a townhouse, provided, however, that any
condominium project or planned unit development shall conform to
the requirements under the Underwriting Guidelines of the Company
regarding such dwellings, and no residence or dwelling is a mobile
home or manufactured dwelling. As of the respective appraisal date
for each Mortgaged Property, no portion of the Mortgaged Property
was being used for commercial purposes outside of the Underwriting
Guidelines;
(k) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien on
the Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and
replacements
23
made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator
of the Mortgage Loan and (i) referred to or otherwise
considered in the appraisal made for the originator of the
Mortgage Loan and (ii) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first
lien and first priority security interest on the property
described therein and the Company has full right to sell and
assign the same to the Purchaser.
(l) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed,
except for escrows established or created due to seasonal weather
conditions, and there is no requirement for future advances
thereunder. All costs, fees and expenses incurred in making or
closing the Mortgage Loan and the recording of the Mortgage were
paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Consolidation of Future Advances.
Any future advances made prior to the Cut-off Date, have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears
a single interest rate and single repayment term reflected on the
Mortgage Loan Schedule. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable to Xxxxxx Xxx or Xxxxxxx Mac; the
consolidated principal amount does
24
not exceed the original principal amount of the Mortgage Loan; the
Company shall not make future advances after the Cut-off Date;
(n) Ownership.
The Company is the sole owner of record and holder of the Mortgage
Loan and the related Mortgage Note and the Mortgage are not
assigned or pledged, and the Company has good and marketable title
thereto and has full right and authority to transfer and sell the
Mortgage Loan to the Purchaser. The Company is transferring the
Mortgage Loan free and clear of any and all encumbrances, liens,
pledges, equities, participation interests, claims, charges or
security interests of any nature encumbering such Mortgage Loan;
(o) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit union, an
insurance company, or similar institution that is supervised and
examined by a federal or state authority or by a mortgagee
approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act. All
parties which have had any interest in the Mortgage Loan, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is
located, and (2) either (a) organized under the laws of such
state, or (b) qualified to do business in such state, or (c)
federal savings and loan associations or national banks having
principal offices in such state, or (d) not doing business in such
state;
(p) LTV, PMI Policy; LPMI Policy.
No Mortgage Loan has a LTV greater than 95%. If the LTV of the
Mortgage Loan was greater than 80% at the time of origination, a
portion of the unpaid principal balance of the Mortgage Loan is
and will be insured as to payment defaults by a PMI Policy. If the
Mortgage Loan is insured by a PMI Policy for which the Mortgagor
pays all premiums, the coverage will remain in place until (i) the
LTV decreases to 78% or (ii) the PMI Policy is otherwise
terminated pursuant to the Homeowners Protection Act of 1998, 12
USC ss.4901, et seq. All provisions of such PMI Policy or LPMI
Policy have been and are being complied with, such policy is in
full force and effect, and all premiums due thereunder have been
paid. The Qualified Insurer has a claims paying ability acceptable
to Xxxxxx Mae or Xxxxxxx Mac. Any Mortgage Loan subject to a PMI
Policy or LPMI Policy obligates the Mortgagor or the Company
thereunder to maintain the PMI Policy or LPMI Policy, as
applicable, and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as set
forth on the
25
Mortgage Loan Schedule is net of any PMI Policy or LPMI Policy
insurance premium;
(q) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance
policy (or in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are
generally not available, an opinion of counsel of the type
customarily rendered in such jurisdiction in lieu of title
insurance) or other generally acceptable form of policy of
insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a
title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Company, its successors and
assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to
the exceptions contained in clauses (1), (2) and (3) of Paragraph
(k) of this Section 3.02, and against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the
Mortgage Interest Rate and Monthly Payment. The Company is the
sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and
will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been
made under such lender's title insurance policy, and no prior
holder of the Mortgage, including the Company, has done, by act or
omission, anything which would impair the coverage of such
lender's title insurance policy;
(r) No Defaults.
There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither the Company nor
its predecessors have waived any default, breach, violation or
event of acceleration;
(s) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage which
are not insured against by the title insurance policy referenced
in Paragraph (q) above;
(t) Location of Improvements; No Encroachments.
26
Except as insured against by the title insurance policy referenced
in Paragraph (q) above, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or
being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;
(u) Payment Terms.
Except with respect to the Interest Only Mortgage Loans, principal
payments commenced no more than sixty (60) days after the funds
were disbursed to the Mortgagor in connection with the Mortgage
Loan. The Mortgage Loans have an original term to maturity of not
more than 30 years, with interest payable in arrears on the first
day of each month. As to each Mortgage Loan on each applicable
Adjustment Date, the Mortgage Interest Rate will be adjusted to
equal the sum of the Index plus the applicable Gross Margin,
rounded up or down to the nearest multiple of 0.125% indicated by
the Mortgage Note; provided that the Mortgage Interest Rate will
not increase or decrease by more than the Periodic Interest Rate
Cap on any Adjustment Date, and will in no event exceed the
Maximum Mortgage Interest Rate or be lower than the Minimum
Mortgage Interest Rate listed on the Mortgage Loan Schedule for
such Mortgage Loan. Each Mortgage Note requires a monthly payment
which is sufficient, during the period prior to the first
adjustment to the Mortgage Interest Rate, to fully amortize the
outstanding principal balance as of the first day of such period
over the then remaining term of such Mortgage Note and to pay
interest at the related Mortgage Interest Rate. As to each
Mortgage Loan, if the related Mortgage Interest Rate changes on an
Adjustment Date, the then outstanding principal balance will be
reamortized over the remaining life of such Mortgage Loan. No
Mortgage Loan contains terms or provisions which would result in
negative amortization;
(v) Customary Provisions.
The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided
thereby, including, (i) in the case of a Mortgage designated as a
deed of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption available to
a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose
the Mortgage;
(w) Occupancy of the Mortgaged Property.
27
As of the date of origination, the Mortgaged Property was lawfully
occupied under applicable law;
(x) No Additional Collateral.
The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of
the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in
Paragraph (k) above;
(y) Deeds of Trust.
In the event that the Mortgage is a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage,
and no fees or expenses are or will become payable by the
Mortgagee to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(z) Acceptable Investment.
The Company has no knowledge of any circumstances or conditions
with respect to the Mortgage Loan, the Mortgaged Property, the
Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan;
(aa) Transfer of Mortgage Loans.
As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment of Mortgage, upon the insertion of the name of the
assignee and recording information, is in recordable form and is
acceptable for recording under the laws of the jurisdiction in
which the Mortgaged Property is located;
(bb) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises
were intended;
(cc) Collection Practices; Escrow Deposits.
The origination, servicing and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted
Servicing Practices, and
28
have been in all material respects legal and proper. With respect
to escrow deposits and Escrow Payments, all such payments are in
the possession of the Company and there exist no deficiencies in
connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have
been collected in full compliance with state and federal law. No
escrow deposits or Escrow Payments or other charges or payments
due the Company have been capitalized under the Mortgage Note;
(dd) No Condemnation.
There is no proceeding pending or to the best of the Company's
knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(ee) The Appraisal.
The Mortgage File includes an appraisal of the related Mortgaged
Property. As to each Time$aver(R) Mortgage Loan, the appraisal may
be from the original of the existing Company-serviced loan, which
was refinanced via such Time$aver(R) Mortgage Loan. The appraisal
was conducted by an appraiser who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the
security thereof; and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal
and the appraiser both satisfy the applicable requirements of
Title XI of the Financial Institution Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(ff) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by
an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by
fire and such hazards as are covered under a standard extended
coverage endorsement and such other hazards as are customary in
the area where the Mortgaged Property is located pursuant to
insurance policies conforming to the requirements of Section 4.10,
in an amount which is at least equal to the lesser of (i) 100% of
the insurable value on a replacement cost basis of the
improvements securing such Mortgage Loan and (ii) the greater of
(a) the outstanding principal balance of the Mortgage Loan and (b)
an amount such that the proceeds of such insurance shall be
sufficient to prevent the application to the Mortgagor or the loss
payee of any coinsurance clause under the policy. If the Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project. If the improvements
on the Mortgaged Property are in an area identified in the Federal
Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect with a generally acceptable insurance
carrier, in an amount representing coverage not less than the
29
least of (A) the outstanding principal balance of the Mortgage
Loan, (B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection
Act of 1973, as amended. All individual insurance policies contain
a standard mortgagee clause naming the Company and its successors
and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain a
hazard insurance policy at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's
cost and expense, and to seek reimbursement therefor from the
Mortgagor. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will
be in full force and effect and inure to the benefit of the
Purchaser upon the consummation of the transactions contemplated
by this Agreement. The Company has not acted so as to impair or
failed to act to avoid impairment of the coverage of any such
insurance policy or the validity, binding effect and
enforceability thereof;
(gg) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor
under the Servicemembers Civil Relief Act, as amended or other
similar state statute;
(hh) No Balloon Payments, Graduated Payments or Contingent Interests.
The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other
contingent interest feature. No Mortgage Loan has a balloon
payment feature;
(ii) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction
or rehabilitation of a Mortgaged Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(jj) Underwriting.
Each Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines of the Company; and the Mortgage Note and
Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae;
(kk) No Bankruptcy.
To the best of the Company's knowledge, no Mortgagor was a debtor
in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was
30
originated and as of the Closing Date, the Company has not
received notice that any Mortgagor is a debtor under any state or
federal bankruptcy or insolvency proceeding;
(ll) Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage Loan,
has fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower
credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a
monthly basis;
(mm) No Violation of Environmental Laws.
To the best of the Company's knowledge, there is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an
issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property; and nothing
further remains to be done to satisfy in full all requirements of
each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;
(nn) HOEPA.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(oo) Single-Premium Credit Life Insurance.
None of the proceeds from the Mortgage Loan were used to finance a
single-premium credit life insurance policy;
(pp) Delivery of Mortgage Files.
The Mortgage Loan Documents and any other documents required to be
delivered by the Company under the Custodial Agreement attached as
Exhibit C hereto for the Mortgage Loans have been delivered to the
Custodian (except for those submitted for recordation). The
Company is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit B, except for such documents the
originals of which have been delivered to the Custodian or
submitted for recordation;
(qq) No Pledged Assets.
No Mortgage Loan is subject to the Company's pledged asset
program;
31
(rr) Prepayment Penalty Term.
No Mortgage Loan is subject to a prepayment penalty; and
(ss) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown Mortgage
Loan:
(i) On or before the date of origination of such Mortgage Loan,
the Company and the Mortgagor, or the Company, the Mortgagor
and the seller of the Mortgaged Property or a third party
entered into a Buydown Agreement. The Buydown Agreement
provides that the seller of the Mortgaged Property (or
another third party) shall deliver to the Company temporary
Buydown Funds in an amount equal to the aggregate
undiscounted amount of payments that, when added to the
amount the Mortgagor on such Mortgage Loan is obligated to
pay on each Due Date in accordance with the terms of the
Buydown Agreement, is equal to the full scheduled Monthly
Payment due on such Mortgage Loan. The effective interest
rate of a Buydown Mortgage Loan, if less than the interest
rate set forth in the related Mortgage Note, will increase
within the Buydown Period as provided in the related Buydown
Agreement so that at the end of such Buydown Period the
effective interest rate will be equal to the interest rate
as set forth in the related Mortgage Note. The Buydown
Mortgage Loan satisfies the requirements of Xxxxxx Xxx or
Xxxxxxx Mac guidelines;
(ii) The Mortgage and Mortgage Note reflect the permanent payment
terms rather than the payment terms of the Buydown
Agreement. The Buydown Agreement provides for the payment by
the Mortgagor of the full amount of the Monthly Payment on
any Due Date that the Buydown Funds are available. The
Buydown Funds were not used to reduce the original principal
balance of the Mortgage Loan or to increase the Appraised
Value of the Mortgaged Property when calculating the
Loan-to-Value Ratios for purposes of the Agreement and, if
the Buydown Funds were provided by the Company and if
required under Xxxxxx Xxx or Xxxxxxx Mac guidelines, the
terms of the Buydown Agreement were disclosed to the
appraiser of the Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor
unless the Mortgagor makes a principal payment of the
outstanding balance of and all other amounts due or accrued
under the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with
the requirements of Xxxxxx Mae or Xxxxxxx Mac regarding
buydown agreements.
32
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans
to the Purchaser and the delivery of the related Mortgage Loan Documents to
the Custodian and shall inure to the benefit of the Purchaser, notwithstanding
any restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage File. Upon
discovery by either the Company or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the interests of Purchaser in the
related Mortgage Loan in the case of a representation and warranty relating to
a particular Mortgage Loan), the party discovering such breach shall give
prompt written notice to the other.
Within 90 days of the earlier of either discovery by or notice to the
Company of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or any individual Mortgage
Loan, the Company shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured, the Company shall,
at the Purchaser's option, repurchase such Mortgage Loan at the Repurchase
Price. In the event that a breach shall involve any representation or warranty
set forth in Section 3.01, and such breach cannot be cured within 90 days of
the earlier of either discovery by or notice to the Company of such breach,
all of the Mortgage Loans shall, at the Purchaser's option, be repurchased by
the Company at the Repurchase Price. However, if the breach shall involve a
representation or warranty set forth in Section 3.02 and the Company discovers
or receives notice of any such breach within 120 days of the Closing Date, the
Company shall, if the breach cannot be cured, at the Purchaser's option and
provided that the Company has a Qualified Substitute Mortgage Loan, rather
than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan
(a "Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 120 days after the Closing Date. If the Company has no
Qualified Substitute Mortgage Loan(s), it shall repurchase the deficient
Mortgage Loan within 90 days of the written notice of the breach. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Section 3.03 shall be accomplished by deposit in the Custodial Account of
the amount of the Repurchase Price for distribution to Purchaser on the
Remittance Date immediately following the Principal Repayment Period in which
such Repurchase Price is received, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held
in the Custodial Account for future distribution.
If pursuant to the foregoing provisions the Company repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Company shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form
to transfer the Mortgage from MERS to the Company on behalf of the Purchaser
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations or (ii) cause MERS to
designate on the MERS(R) System the Company as the beneficial holder with
respect to such Mortgage Loan.
33
At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Company shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the
Deleted Mortgage Loan from this Agreement, and, in the case of substitution,
identify a Qualified Substitute Mortgage Loan and amend the Mortgage Loan
Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to
this Agreement. In connection with any such substitution, the Company shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution. The Company shall effect such
substitution by delivering to the Custodian for such Qualified Substitute
Mortgage Loan the documents required by Section 2.03, with the Mortgage Note
endorsed as required by Section 2.03. Any substitution will be made as of the
first day of the Due Period beginning in the month in which such substitution
occurs. Accordingly, Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the Company,
and the Company shall deposit in the Custodial Account the Monthly Payment
less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. With respect to any
Deleted Mortgage Loan, distributions to Purchaser shall include the Monthly
Payment due on any Deleted Mortgage Loan in the month of substitution, and the
Company shall thereafter be entitled to retain all amounts subsequently
received by the Company in respect of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be paid by the Company to the Purchaser in
the month of substitution pursuant to Section 5.01. Accordingly, on the date
of such substitution, the Company shall deposit from its own funds into the
Custodial Account an amount equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and related costs, judgments, and other costs and expenses resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the representations and warranties contained in this
Agreement. It is understood and agreed that the obligations of the Company set
forth in this Section 3.03 to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Section 3.03
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
34
Any cause of action against the Company relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Company to the Purchaser, (ii) failures
by the Company to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a Subcontractor or Subservicer, as applicable, to
do any and all things in connection with such servicing and administration
which the Company may deem necessary or desirable, consistent with the terms
of this Agreement, with Accepted Servicing Practices and, in the case of any
Mortgage Loan transferred to a REMIC, with the REMIC Provisions. The Company
shall be responsible for any and all acts of a Subcontractor or Subservicer,
as applicable, and the Company's utilization of a Subcontractor or
Subservicer, as applicable, shall in no way relieve the liability of the
Company under this Agreement.
Consistent with the terms of this Agreement and subject to the REMIC
Provisions if the Mortgage Loans have been transferred to a REMIC, the Company
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Company's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that the Company shall
not make any future advances, other than Servicing Advances, with respect to a
Mortgage Loan. Unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Company, imminent, the Company
shall not permit any modification of any Mortgage Loan that would change the
Mortgage Interest Rate, defer or forgive the payment of any principal or
interest payments, reduce the outstanding principal amount (except for actual
payments of principal) or change the maturity date on such Mortgage Loan. In
the event of a default, the Company shall request written consent from the
Purchaser to permit such a modification and the Purchaser shall provide
written consent or notify the Company of its objection to such modification
within three (3) Business Days of its receipt of the Company's request. In the
event of any such modification which permits the deferral of interest or
principal payments on any Mortgage Loan, the Company shall, on the Business
Day immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage
Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and
(b) the amount paid by the Mortgagor. The Company shall be entitled to
reimbursement for such advances to the same
35
extent as for all other advances made pursuant to Section 5.03. Without
limiting the generality of the foregoing, the Company shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of itself
and the Purchaser, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties
when required, consistent with the foregoing restrictions. If reasonably
required by the Company, the Purchaser shall furnish the Company with any
powers of attorney and other documents necessary or appropriate to enable the
Company to carry out its servicing and administrative duties under this
Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
The Company is authorized and empowered by the Purchaser, in its own
name, when the Company believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from
the registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Purchaser, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns. The Company will comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the MERS
Mortgage Loans for as long as such Mortgage Loans are registered with MERS.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event that the Mortgagor fails to perform any other
covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Company shall take such action as (1)
the Company would take under similar circumstances with respect to a similar
mortgage loan held for its own account for investment, (2) shall be consistent
with Accepted Servicing Practices, (3) the Company shall determine prudently
to be in the best interest of Purchaser, and (4) is consistent with any
related PMI Policy or LPMI Policy. In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent
for a period of 90 days or any other default continues for a period of 90 days
beyond the expiration of any grace or cure period, the Company shall commence
foreclosure proceedings. In the event the Purchaser objects to such
foreclosure action, the Company shall not be required to make Monthly Advances
with respect to such Mortgage Loan, pursuant to Section 5.03, and the
Company's obligation to make such Monthly Advances shall terminate on the 90th
day referred to above. In such connection, the Company shall from its own
funds make all necessary and proper Servicing Advances, provided, however,
that the Company shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration or preservation of any
Mortgaged
36
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the
event the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Company to proceed with foreclosure
or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to fully reimburse the Company, the
Company shall be entitled to be reimbursed from amounts in the Custodial
Account pursuant to Section 4.05 hereof. In the event the Purchaser directs
the Company not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Company shall be reimbursed for all Servicing Advances made
with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable in accordance with Accepted Servicing Practices and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage
Loan and the Mortgaged Property, to the end that the installments payable by
the Mortgagors will be sufficient to pay such charges as and when they become
due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received in
connection with a Mortgage Loan separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand
37
accounts, titled "Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans, - P & I." The Custodial Account shall
be established with a Qualified Depository. Upon request of the Purchaser and
within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. The Custodial
Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on by
the Company in accordance with Section 4.05.
The Company shall deposit in the Custodial Account within two (2)
Business Days of Company's receipt, and retain therein, the following
collections received by the Company and payments made by the Company after the
Cut-off Date, other than payments of principal and interest due on or before
the Cut-off Date, or received by the Company prior to the Cut-off Date but
allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor
in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to
be deposited by the Company in connection with a shortfall in
principal amount of any Qualified Substitute Mortgage Loan
pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be paid
by the Company out of its funds) which, when added to all amounts
allocable to interest received in connection with the Principal
Prepayment, equals one month's interest on the amount of principal
so prepaid at the Mortgage Loan Remittance Rate;
38
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any
blanket hazard insurance policy;
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section
4.16; and
(xi) an amount from the Subsidy Account that when added to the amount
received from the Mortgagor for such month, will equal the full
Monthly Payment due under the related Mortgage Note
The foregoing requirements for deposit into the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 6.01, need not be
deposited by the Company into the Custodial Account. Any interest paid on
funds deposited in the Custodial Account by the depository institution shall
accrue to the benefit of the Company and the Company shall be entitled to
retain and withdraw such interest from the Custodial Account pursuant to
Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's funds
made pursuant to Section 5.03, the Company's right to reimburse
itself pursuant to this sub clause (ii) being limited to amounts
received on the related Mortgage Loan which represent late Monthly
Payments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Company
respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Company's right
thereto shall be prior to the rights of Purchaser, except that,
where the Company is required to repurchase a Mortgage Loan
pursuant to Section 3.03 or 6.02, the Company's right to such
reimbursement shall be subsequent to the payment to the Purchaser
of the Repurchase Price pursuant to such sections and all other
amounts required to be paid to the Purchaser with respect to such
Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for
any unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this sub clause (iii) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Company from the Mortgagor or otherwise relating
to the Mortgage Loan, it being understood that, in the case of any
such reimbursement,
39
the Company's right thereto shall be prior to the rights of
Purchaser, except that where the Company is required to repurchase
a Mortgage Loan pursuant to Section 3.03 or 6.02, in which case
the Company's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price pursuant to
such sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(iv) to pay itself interest actually earned on funds deposited in the
Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses
after liquidation of the Mortgaged Property not otherwise
reimbursed above;
(viii) to reimburse the trustee with respect to any Securitization
Transaction for any unreimbursed Monthly Advances or Servicing
Advances made by the Trustee, as applicable, the right to
reimbursement pursuant to this sub clause (viii) with respect to
any Mortgage Loan being limited to related Liquidation Proceeds,
proceeds of REO Dispositions, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Company
from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of such reimbursement, such
trustee's right thereto shall be prior to the rights of the
Company to reimbursement under (ii) and (iii) above, and prior to
the rights of the Purchaser under (i) above;
(ix) to remove funds inadvertently placed in the Custodial Account by
the Company; and
(x) to clear and terminate the Custodial Account upon the termination
of this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Company
is not obligated to remit on such Remittance Date. The Company may use such
withdrawn funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
40
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled, "Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or subsequent
purchasers of Residential Mortgage Loans, and various Mortgagors - T & I." The
Escrow Accounts shall be established with a Qualified Depository, in a manner
which shall provide maximum available insurance thereunder. Upon request of
the Purchaser and within ten (10) days thereof, the Company shall provide the
Purchaser with written confirmation of the existence of such Escrow Account.
Funds deposited in the Escrow Account may be drawn on by the Company in
accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within two
(2) Business Days of Company's receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of
any Mortgaged Property; and
(iii) all payments on account of Buydown Funds.
The Company shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution, other
than interest on escrowed funds required by law to be paid to the Mortgagor.
To the extent required by law, the Company shall pay interest on escrowed
funds to the Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or that interest paid thereon is insufficient for such
purposes. The Company shall reimburse the Escrow Account for any losses
incurred as a result of the investment of amounts on deposit in the Escrow
Account.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Company only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges,
fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related
Mortgage Loan, but only from amounts received on the related
Mortgage Loan which represent late collections of Escrow Payments
thereunder;
41
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce
the principal balance of the Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section
4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Company;
(viii) to remit to Purchaser payments on account of Buydown Funds as
applicable; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water
rates, sewer rents, and other charges which are or may become a lien upon the
Mortgaged Property and the status of PMI Policy or LPMI Policy premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof prior to the applicable penalty or termination date,
employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Company in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Company assumes full responsibility for the timely payment of all such bills
and shall effect timely payment of all such charges irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments, and the Company shall make advances from its own funds to
effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, Subsidy Account or the
Escrow Account to a different Qualified Depository from time to time, provided
that the Company shall give notice to the Purchaser of such transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by
an insurer acceptable to
42
Xxxxxx Xxx or Xxxxxxx Mac against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged
Property is located, in an amount which is at least equal to the lesser of (i)
100% of the insurable value on a replacement cost basis of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the
proceeds of such insurance shall be sufficient to prevent the application to
the Mortgagor or the loss payee of any coinsurance clause under the policy. In
the event a hazard insurance policy shall be in danger of being terminated, or
in the event the insurer shall cease to be acceptable to Xxxxxx Mae or Xxxxxxx
Mac, the Company shall notify the Purchaser and the related Mortgagor, and
shall use its best efforts, as permitted by applicable law, to obtain from
another qualified insurer a replacement hazard insurance policy substantially
and materially similar in all respects to the original policy. In no event,
however, shall a Mortgage Loan be without a hazard insurance policy at any
time, subject only to Section 4.11 hereof.
If the related Mortgaged Property is located in an area identified by
the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) the Company shall cause the
Mortgagor to maintain a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier acceptable to Xxxxxx Mae or Xxxxxxx Mac
in an amount representing coverage equal to the lesser of (i) the minimum
amount required, under the terms of coverage, to compensate for any damage or
loss on a replacement cost basis (or the unpaid balance of the mortgage if
replacement cost coverage is not available for the type of building insured)
and (ii) the maximum amount of insurance which is available under the Flood
Disaster Protection Act of 1973, as amended. If at any time during the term of
the Mortgage Loan, the Company determines, in accordance with applicable law,
that a Mortgaged Property is located in a special flood hazard area and is not
covered by flood insurance or is covered in an amount less than the amount
required by the Flood Disaster Protection Act of 1973, as amended, the Company
shall notify the related Mortgagor that the Mortgagor must obtain such flood
insurance coverage, and if said Mortgagor fails to obtain the require flood
insurance coverage within forty-five (45) days after such notification, the
Company shall immediately force place the required flood insurance on the
Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current Xxxxxx Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may
have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Company shall communicate and
consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the required amount of coverage for the
43
Mortgaged Property and if the Mortgagor does not obtain such coverage, the
Company shall immediately force place the required coverage on the Mortgagor's
behalf.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice
in selecting either his insurance carrier or agent, provided, however, that
the Company shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to Xxxxxx Xxx and Xxxxxxx Mac
and are licensed to do business in the jurisdiction in which the Mortgaged
Property is located. The Company shall determine that such policies provide
sufficient risk coverage and amounts, that they insure the property owner, and
that they properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to
the Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Company shall prepare and make any claims on the
blanket policy as deemed necessary by the Company in accordance with Accepted
Servicing Practices. Any amounts collected by the Company under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.05. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, the Company shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to be deposited from the Company's funds,
without reimbursement therefor. Upon request of the Purchaser, the Company
shall cause to be delivered to such Purchaser a certificate of insurance and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to
such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
44
The Company shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other Persons acting in any
capacity requiring such Persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Company Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Company against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company against
losses in connection with the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.
No provision of this Section 4.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such Fidelity Bond and Errors and Omissions Insurance Policy shall
be at least equal to the amounts acceptable to Xxxxxx Mae or Xxxxxxx Mac. Upon
the request of any Purchaser, the Company shall cause to be delivered to such
Purchaser a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer
that such Fidelity Bond and Errors and Omissions Insurance Policy shall in no
event be terminated or materially modified without 30 days' prior written
notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than 60 days delinquent, the Company
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
record of each such inspection and, upon request, shall provide the Purchaser
with such information.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to
be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. For claims greater
than $15,000, at a minimum the Company shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited
to requiring waivers with respect to mechanics' and materialmen's
liens;
45
(iii) the Company shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy and LPMI Policy; Claims.
With respect to each Mortgage Loan with an LTV in excess of 80% at the
time of origination, the Company shall, without any cost to the Purchaser,
maintain or cause the Mortgagor to maintain in full force and effect a PMI
Policy insuring a portion of the unpaid principal balance of the Mortgage Loan
as to payment defaults. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC ss.4901, et seq. In
the event that such PMI Policy shall be terminated other than as required by
law, the Company shall obtain from another Qualified Insurer a comparable
replacement policy, with a total coverage equal to the remaining coverage of
such terminated PMI Policy. If the insurer shall cease to be a Qualified
Insurer, the Company shall determine whether recoveries under the PMI Policy
are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy
for such reason. If the Company determines that recoveries are so jeopardized,
it shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company will
maintain or cause to be maintained in full force and effect any LPMI Policy
issued by a Qualified Insurer with respect to each Mortgage Loan for which
such coverage is in existence or is obtained. The Purchaser shall notify the
Company of any Mortgage Loan covered under an LPMI Policy. The Company shall
not take any action which would result in noncoverage under any applicable PMI
Policy or LPMI Policy of any loss which, but for the actions of the Company
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Company shall promptly notify the insurer under the related PMI
Policy or LPMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy or LPMI Policy and shall take
all actions which may be required by such insurer as a condition to the
continuation of coverage under such PMI Policy or LPMI Policy. If such PMI
Policy or LPMI Policy is terminated as a result of such assumption or
substitution of liability, the Company shall obtain a replacement PMI Policy
or LPMI Policy as provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 4.04,
any amounts
46
collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Any premiums payable on LPMI Policies will be paid from the Company's
own funds without reimbursement.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Company, or in the event the Company is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, or the perfection of
the ownership or security interest of the Purchaser in such REO Property would
be adversely affected, the deed or certificate of sale shall be taken in the
name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Company from any attorney duly licensed to practice
law in the state where the REO Property is located. The Person or Persons
holding such title other than the Purchaser shall acknowledge in writing that
such title is being held as nominee for the Purchaser.
The Company shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the purpose of its prompt disposition
and sale. The Company, either itself or through an agent selected by the
Company, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Company shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Company deems to be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event prior to the
close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless (i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three years is permitted under the foregoing sentence and is necessary to
sell any REO Property, (i) the Company shall report monthly to the Purchaser
as to the progress being made in selling such REO Property and (ii) if a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Company as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
47
The disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter the expenses of such sale shall be paid and the Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03. On the
Remittance Date immediately following the Principal Prepayment Period in which
such sale proceeds are received the net cash proceeds of such sale remaining
in the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account funds necessary
for the proper operation management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Section
4.10 and the fees of any managing agent of the Company, or the Company itself.
The Company shall make monthly distributions on each Remittance Date to the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described in this Section
4.16 and of any reserves reasonably required from time to time to be
maintained to satisfy anticipated liabilities for such expenses).
If REO Property is held by a REMIC, then it shall be disposed of within
the time required by the REMIC Provisions unless an extension of such time is
granted by the IRS.
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Purchaser shall
reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the
Company shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant
to Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business
and information returns relating to cancellation of indebtedness
48
income with respect to any Mortgaged Property as required by the Code. Such
reports shall be in form and substance sufficient to meet the reporting
requirements imposed by the Code.
Section 4.20 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and
necessary for the Company to do so in working with legal counsel, auditors,
taxing authorities or other governmental agencies. Each party agrees that it
shall comply with all applicable laws and regulations regarding the privacy or
security of Customer Information shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines.
Section 4.21 Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Company shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. Upon the discovery
by the Company or the receipt of notice from the Purchaser that the Company
has failed to adjust a Mortgage Interest Rate in accordance with the terms of
the related Mortgage Note, the Company shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or
deferral caused the Purchaser thereby.
Section 4.22 Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage Loan, agrees
to fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis.
Section 4.23 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required
to be paid by the Mortgagor under the terms of the related Mortgage Note
(without
49
regard to the related Buydown Agreement as if the Mortgage Loan were not
subject to the terms of the Buydown Agreement). With respect to each Buydown
Mortgage Loan, the Company will distribute to the Purchaser on each Remittance
Date an amount of Buydown Funds equal to the amount that, when added to the
amount required to be paid on such date by the related Mortgagor, pursuant to
and in accordance with the related Buydown Agreement, equals the full Monthly
Payment that would otherwise be required to be paid on such Mortgage Loan by
the related Mortgagor under the terms of the related Mortgage Note (as if the
Mortgage Loan were not a Buydown Mortgage Loan and without regard to the
related Buydown Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage
Loan during the Buydown Period and the Mortgaged Property securing such
Buydown Mortgage Loan is sold in the liquidation thereof (either by the
Company or the insurer under any related Primary Insurance Policy) the Company
shall, on the Remittance Date following the date upon which Liquidation
Proceeds or REO Disposition proceeds are received with respect to any such
Buydown Mortgage Loan, distribute to the Purchaser all remaining Buydown Funds
for such Mortgage Loan then remaining in the Escrow Account. Pursuant to the
terms of each Buydown Agreement, any amounts distributed to the Purchaser in
accordance with the preceding sentence will be applied to reduce the
outstanding principal balance of the related Buydown Mortgage Loan. If a
Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in its
entirety during the related Buydown Period, the Company shall be required to
withdraw from the Escrow Account any Buydown Funds remaining in the Escrow
Account with respect to such Buydown Mortgage Loan in accordance with the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a
Buydown Mortgage Loan during the related Buydown Period, together with any
Buydown Funds then remaining in the Escrow Account related to such Buydown
Mortgage Loan, would result in a principal prepayment of the entire unpaid
principal balance and all other amounts owed under the Buydown Mortgage Loan,
the Company shall distribute to the Purchaser on the Remittance Date occurring
in the month immediately succeeding the month in which such Principal
Prepayment is received, all Buydown Funds related to such Mortgage Loan so
remaining in the Escrow Account, together with any other amounts required to
be deposited into the Custodial Account.
Section 4.24 Establishment of and Deposits to Subsidy Account.
The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of Residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be an eligible deposit account established with a
Qualified Depository.
The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
50
(i) to deposit in the Custodial Account in the amounts and in
the manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in
accordance with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the
termination of this Agreement.
Notwithstanding anything to the contrary elsewhere in this Agreement,
the Company may employ the Escrow Account as the Subsidy Account to the extent
that the Company can separately identify any Subsidy Funds deposited therein.
Section 4.25 Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.25. The Company shall not hire
or otherwise utilize the services of any Subcontractor, and shall not permit
any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (b) of this Section 4.25.
(a) It shall not be necessary for the Company to seek the consent of
the Purchaser or any Depositor to the utilization of any Subservicer.
The Company shall cause any Subservicer used by the Company (or by any
Subservicer) for the benefit of the Purchaser and any Depositor to
comply with the provisions of this Section 4.25 and with Sections 6.04,
6.06, 9.01(f)(iii), 9.01(f)(v), 9.01(f)(vi) and 9.01(g) of this
Agreement to the same extent as if such Subservicer were the Company,
and to provide the information required with respect to such Subservicer
under Section 9.01(f)(iv) of this Agreement. The Company shall be
responsible for obtaining from each Subservicer and delivering to the
Purchaser and any Depositor any servicer compliance statement required
to be delivered by such Subservicer under Section 6.04 and any
assessment of compliance and attestation required to be delivered by
such Subservicer under Section 6.06 and any certification required to be
delivered to the Person that will be responsible for signing the
Sarbanes Certification under Section 6.06 as and when required to be
delivered.
(b) It shall not be necessary for the Company to seek the consent of
the Purchaser or any Depositor to the utilization of any Subcontractor.
The Company shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer
or administrator) a written description (in form and substance
satisfactory to the Purchaser and such Depositor) of the role and
function of each Subcontractor utilized by the Company or any
Subservicer, specifying (i) the identity of each such Subcontractor,
(ii) which (if any) of such Subcontractors are "participating in
51
the servicing function" within the meaning of Item 1122 of Regulation
AB, and (iii) which elements of the Servicing Criteria will be addressed
in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(f) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net
of charges against or withdrawals from the Custodial Account pursuant to
Section 4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment
Period which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 4.04(viii); minus (d) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the first day
of the month of the Remittance Date, and minus (e) any amounts attributable to
Buydown Funds being held in the Custodial Account, which amounts shall be
remitted on the Remittance Date succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the
second Business Day following the Business Day on which such payment was due,
the Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover
the period commencing with the day following such second Business Day and
ending with the Business Day on which such payment is made, both inclusive.
Such interest shall be remitted along with the distribution payable on the
next succeeding Remittance Date. The payment by the Company of any such
interest shall not be deemed an extension of time for payment or a waiver of
any Event of Default by the Company.
52
Section 5.02 Statements to Purchaser.
Not later than the Remittance Report Date, the Company shall furnish to
the Purchaser a monthly remittance advice, in an electronic form as mutually
agreed to by the Company and Purchaser, with a trial balance report attached
thereto, as to the remittance period ending on the last day of the preceding
month.
In addition, the Company shall provide the Purchaser with such
information as the Purchaser may reasonably request from time to time
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return and any and all other tax returns, information
statements or other filings required to be delivered to any governmental
taxing authority or to the Purchaser pursuant to any applicable law with
respect to the Mortgage Loans and the transaction contemplated hereby.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due
on the Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the immediately preceding Determination
Date or which were deferred pursuant to Section 4.01. Any amounts held for
future distribution and so used shall be replaced by the Company by deposit in
the Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than payments to the
Purchaser required to be made on such Remittance Date. Notwithstanding the
foregoing, the Company shall not be permitted to make any advances from
amounts held for future distribution, and instead shall be required to make
all advances from its own funds, unless the Company, its parent, or their
respective successors hereunder shall have a long-term credit rating of at
least "A" by Fitch, Inc. (doing business as Fitch Ratings), "A" by Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. and
"A2" by Xxxxx'x Investors Service, Inc. The Company's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last
Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including REO Disposition Proceeds, Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided, however, that if
requested by a Rating Agency in connection with Securitization Transaction,
the Company shall be obligated to make such advances through the Remittance
Date prior to the date on which cash is received in connection with the
liquidation of REO Property; provided, further, that such obligation shall
cease if the Company determines, in its sole reasonable opinion, that advances
with respect to such Mortgage Loan are non-recoverable by the Company from
Liquidation Proceeds, REO Disposition Proceeds, Insurance Proceeds,
Condemnation Proceeds, or otherwise with respect to a particular Mortgage
Loan. In the event that the Company determines that any such advances are
non-recoverable, the Company shall provide the Purchaser with a certificate
signed by two officers of the Company evidencing such determination.
53
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Company shall not exercise
such rights if prohibited by law from doing so or if the exercise of such
rights would impair or threaten to impair any recovery under the related PMI
Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property
has been conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and the original Mortgagor remains liable thereon or (ii) in the
event the Company is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Company has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. If an assumption fee is collected by the Company for entering
into an assumption agreement the fee will be retained by the Company as
additional servicing compensation. In connection with any such assumption,
neither the Mortgage Interest Rate borne by the related Mortgage Note, the
term of the Mortgage Loan, the outstanding principal amount of the Mortgage
Loan nor any other material terms shall be changed without Purchaser's
consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the
54
Company shall notify the Purchaser in the monthly remittance advice as
provided in Section 5.02, and may request the release of any Mortgage Loan
Documents. If such Mortgage Loan is a MERS Mortgage Loan, the Company is
authorized to cause the removal from the registration on the MERS System of
such Mortgage and to execute and deliver, on behalf of the Purchaser, any and
all instruments of satisfaction or cancellation or of partial or full release.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit
thereof in the Custodial Account within 2 Business Days of receipt of such
demand by the Purchaser. The Company shall maintain the Fidelity Bond and
Errors and Omissions Insurance Policy as provided for in Section 4.12 insuring
the Company against any loss it may sustain with respect to any Mortgage Loan
not satisfied in accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account the amount of its Servicing
Fee. The Servicing Fee shall be payable monthly and shall be computed on the
basis of the same unpaid principal balance and for the period respecting which
any related interest payment on a Mortgage Loan is received. The obligation of
the Purchaser to pay the Servicing Fee is limited to, and payable solely from,
the interest portion (including recoveries with respect to interest from
Liquidation Proceeds, to the extent permitted by Section 4.05) of such Monthly
Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
(i) The Company shall deliver to the Purchaser, on or before February
28, 2006, an Officer's Certificate, stating that (x) a review of the
activities of the Company during the preceding calendar year and of
performance under this Agreement or similar agreements has been made under
such officer's supervision, and (y) to the best of such officer's knowledge,
based on such review, the Company has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof and the action being taken by the
Company to cure such default.
(ii) On or before March 1 of each calendar year, commencing in 2007,
the Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the
55
Purchaser and such Depositor and signed by an authorized officer of the
Company, to the effect that (a) a review of the Company's activities during
the immediately preceding calendar year (or applicable portion thereof) and of
its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer's supervision,
and (b) to the best of such officers' knowledge, based on such review, the
Company has fulfilled all of its obligations under this Agreement and any
applicable Reconstitution Agreement in all material respects throughout such
calendar year (or applicable portion thereof) or, if there has been a failure
to fulfill any such obligation in any material respect, specifically
identifying each such failure known to such officer and the nature and the
status thereof.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
Except with respect to Securitization Transactions on or after January
1, 2006, on or before February 28, 2006, the Company, at its expense, shall
cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
each Purchaser to the effect that such firm has examined certain documents and
records relating to the servicing of the mortgage loans similar in nature and
that such firm is of the opinion that the provisions of this or similar
agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and (ii) such other exceptions as shall be set forth in such statement. By
providing Purchaser a copy of a Uniform Single Attestation Program Report from
their independent public accountant's on an annual basis, Company shall be
considered to have fulfilled its obligations under this Section 6.05.
Section 6.06 Report on Assessment of Compliance and Attestation.
With respect to any Mortgage Loans that are the subject of a
Securitization Transaction occurring on or after January 1, 2006, the Company
shall, on or before March 1 of each calendar year, commencing in 2007:
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such
Depositor) regarding the Company's assessment of compliance with
the Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and Item 1122 of Regulation AB. Such report shall be addressed
to the Purchaser and such Depositor and signed by an authorized
officer of the Company and shall address each of the Servicing
Criteria specified substantially in the form of Exhibit J hereto
delivered to the Purchaser at the time of any Securitization
Transaction;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to the
Purchaser and such Depositor that attests to, and reports on, the
assessment of compliance made by the Company and
56
delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.25(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation
AB, to deliver to the Purchaser and any Depositor an assessment of
compliance and accountants' attestation as and when provided in
paragraphs (i) and (ii) of this Section 6.06; and
(iv) deliver to the Purchaser, any Depositor and any other Person that
will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of 2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form attached
hereto as Exhibit E.
The Company acknowledges that the parties identified in clause (iv)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the
Commission.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(iii) shall address each of the Servicing Criteria specified
substantially in the form of Exhibit J hereto delivered to the Purchaser
concurrently with the execution of this Agreement or, in the case of a
Subservicer subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance provided by a Subcontractor pursuant
to Section 6.06(iii) need not address any elements of the Servicing Criteria
other than those specified by the Company pursuant to Section 4.25.
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.25, Section 6.04, Section 6.05 or Section 6.06, or any breach by the
Company of a representation or warranty set forth in Section 9.01(f)(vi)(A),
or in a writing furnished pursuant to Section 9.01(f)(vi)(B) and made as of a
date prior to the closing date of the related Securitization Transaction, to
the extent that such breach is not cured by such closing date, or any breach
by the Company of a representation or warranty in a writing furnished pursuant
to Section 9.01(f)(vi)(B) to the extent made as of a date subsequent to such
closing date, shall, except as provided in sub-clause (ii) of this Section,
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Company under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything
in this Agreement or any
57
applicable Reconstitution Agreement to the contrary) of any compensation to
the Company; provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any Subcontractor
to deliver any information, report, certification or accountants' letter when
and as required under Section 6.04, Section 6.05 or Section 6.06, including
any failure by the Company to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Company
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company under this Agreement
and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given effect.
(iii) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor, as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may have under other
provisions of this Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for damages,
specific performance or injunctive relief.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and
audit any and all of the books, records, or other information of the Company,
whether held by the Company or by another on its behalf, with respect to or
concerning this Agreement or the Mortgage Loans, during business hours or at
such other times as may be reasonable under applicable circumstances, upon
reasonable advance notice. The Purchaser shall pay its own expenses associated
with such examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans or any of them and REO Property are held, the Company
shall not take any action, cause the REMIC to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of the
REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC
58
(including but not limited to the tax on "prohibited transactions" as defined
in Section 860F(a) (2) of the Code and the tax on "contributions" to a REMIC
set forth in Section 860G(d) of the Code) unless the Company has received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
Section 6.10 Xxxxxxxx-Xxxxx Certification
A. For Mortgage Loans that are part of a Securitization Transaction
occurring on or before December 31, 2005, with respect to which a Sarbanes
Certifying Party files a Xxxxxxxx-Xxxxx certification directly with the
Securities Exchange Commission (a "Transaction"), by February 28, 2006 (or if
such day is not a Business Day, the immediately preceding Business Day), or in
connection with any additional Xxxxxxxx-Xxxxx certifications directly filed by
the Sarbanes Certifying Party, upon thirty (30) days written request, an
officer of the Company shall execute and deliver an Officer's Certificate to
the Sarbanes Certifying Party for the benefit of such Sarbanes Certifying
Party and its officers, directors and affiliates, certifying as to the
following matters:
(i) Based on my knowledge, the information relating to the Mortgage
Loans and the servicing thereof submitted by the Company to the
Sarbanes Certifying Party which is used in connection with
preparation of the reports on Form 8-K and the annual report on
Form 10-K filed with the Securities Exchange Commission with
respect to the Transaction, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading as of the date of this certification;
(ii) The servicing information required to be provided to the Sarbanes
Certifying Party by the Company under the servicing agreement has
been provided to the Sarbanes Certifying Party;
(iii) I am responsible for reviewing the activities performed by the
Company under the relevant servicing agreement and based upon the
review required by the relevant servicing agreement, and except as
disclosed in the Annual Statement of Compliance, the Annual
Independent Public Accountant's Servicing Report and all servicing
reports, officer's certificates and other information relating to
the servicing of the Mortgage Loans submitted to the Sarbanes
Certifying Party, the Company has, as of the date of this
certification, fulfilled its obligations under the relevant
servicing agreement; and
(iv) I have disclosed to the Sarbanes Certifying Party all significant
deficiencies relating to the Company's compliance with the minimum
servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar standard as set forth in the relevant
servicing agreement.
59
B. The Company shall indemnify and hold harmless the Sarbanes Certifying
Party and its officers, directors, agents and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach by the Company or any of its officers, directors, agents or
affiliates of its obligations under this Section 6.10 or the negligence, bad
faith or willful misconduct of the Company in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Sarbanes Certifying Party, then the Company agrees that it shall
contribute to the amount paid or payable by the Sarbanes Certifying Party as a
result of the losses, claims, damages or liabilities of the Sarbanes
Certifying Party in such proportion as is appropriate to reflect the relative
fault of the Sarbanes Certifying Party on the one hand and the Company on the
other in connection with a breach of the Company's obligations under this
Section 6.10 or the Company's negligence, bad faith or willful misconduct in
connection therewith.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies
or originals of any documents contained in the Servicing File for each
Mortgage Loan provided for herein. All other special reports or information
not provided for herein as shall be necessary, reasonable, or appropriate with
respect to the Purchaser or any regulatory agency will be provided at the
Purchaser's expense. All such reports, documents or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company, upon request, also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Company (and are available upon request to
members or stockholders of the Company or to the public at large).
60
The Company also shall make available to Purchaser or prospective
purchasers a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or
the financial statements of the Company, and to permit any prospective
purchaser to inspect the Company's servicing facilities for the purpose of
satisfying such prospective purchaser that the Company has the ability to
service the Mortgage Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other costs,
fees and expenses that the Purchaser may sustain in any way related to the
failure of the Company to perform its duties and service the Mortgage Loans in
strict compliance with the terms of this Agreement. The Company immediately
shall notify the Purchaser if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans, and assume (with the prior written
consent of the Purchaser) the defense of any such claim and pay all expenses
in connection therewith, including counsel fees, and promptly pay, discharge
and satisfy any judgment or decree which may be entered against it or the
Purchaser in respect of such claim. The Company shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Company for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Company's indemnification pursuant to Section 3.03, or the failure of
the Company to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement or any of the
Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution which
is a Xxxxxx Mae/Xxxxxxx Mac-approved company in good standing. Furthermore, in
the event the Company transfers or otherwise disposes of all or substantially
all of its assets to an affiliate of the Company, such
61
affiliate shall satisfy the condition above, and shall also be fully liable to
the Purchaser for all of the Company's obligations and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such Person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that
the Company may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Company shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy
of its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder
or delegate its rights or duties hereunder (other than pursuant to Section
4.01) or any portion hereof or sell or otherwise dispose of all of its
property or assets without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or
upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company. Any
such determination permitting the resignation of the Company shall be
evidenced by an Opinion of Counsel to such effect delivered to the Purchaser
which Opinion of Counsel shall be in form and substance acceptable to the
Purchaser. No such resignation shall become effective until a successor shall
have assumed the Company's responsibilities and obligations hereunder in the
manner provided in Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder (other than
pursuant to Section 4.01) or any portion thereof or sell
62
or otherwise dispose of all or substantially all of its property or assets,
without the prior written consent of the Purchaser, then the Purchaser shall
have the right to terminate this Agreement upon notice given as set forth in
Section 10.01, without payment of any penalty, damages or termination fees,
and without any liability whatsoever to the Company or any third party.
ARTICLE IX
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement
The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Company
as the servicer thereof or as subservicer if a master servicer is employed, or
as applicable the "seller/servicer." In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
Company shall continue to service such rejected Mortgage Loan on behalf of the
Purchaser in accordance with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sales or Securitization Transaction in accordance
with this Section 9.01, provided that no such Whole Loan Transfer, Agency Sale
or Securitization Transaction shall create a greater obligation or cost on the
part of the Company than otherwise set forth in this Agreement. In connection
therewith the Company shall:
(a) make all representations and warranties with respect to the
Mortgage Loans as of the Closing Date and with respect to the
Company itself as of the closing date of each Whole Loan Transfer,
Agency Sales or Securitization Transaction;
(b) negotiate in good faith and execute any seller/servicer agreements
required by the shelf registrant to effectuate the foregoing;
(c) represent to the Purchaser, the depositor, the trustee, and the
initial purchaser of the securities issued in connection with any
Securitization Transaction that: (1) that the Company has serviced
the Mortgage Loans in accordance with the terms of this Agreement,
and has otherwise complied with all covenants and obligations
hereunder, and (2) that the Company has taken no action that
would, nor omitted to take any required action the omission of
which would, have the effect of impairing the mortgage insurance
or guarantee on the Mortgage Loans;
(d) deliver an opinion of counsel (which can be an opinion of in-house
counsel to the Company) reasonably acceptable to the Purchaser;
provided that any out-of-pocket, third party expenses incurred by
the Company in connection with the foregoing shall be paid by the
Purchaser;
63
(e) in connection with any Securitization Transaction occurring on or
before December 31, 2005, provide as applicable:
(i) any and all information and appropriate verification of
information which may be reasonably available to the
Company, including a description of the Company, the
Company's foreclosure, delinquency experience and the
Company's underwriting standards, including any such
descriptions for inclusion in any prospectus, prospectus
supplement or other offering document in connection with any
Securitization Transaction, whether through letters of its
auditors and counsel or otherwise as the Purchaser shall
request; provided that the Purchaser executes an
Indemnification Agreement substantially in the form of
Exhibit G attached hereto;
(ii) such additional representations, warranties, covenants,
opinions of counsel, letters from auditors, and certificates
of public officials or officers of the Company as are
reasonably believed necessary by the trustee, any rating
agency or the Purchaser, as the case may be, in connection
with such Whole Loan Transfers, Agency Sales or
Securitization Transactions. The Purchaser shall pay all
third party costs associated with the preparation of such
information. The Company shall execute any seller/servicer
agreements required within a reasonable period of time after
receipt of such seller/servicer agreements which time shall
be sufficient for the Company and Company's counsel to
review such seller/servicer agreements. Under any such
Agreements, the Company shall retain the Servicing Fee with
respect to each Mortgage Loan at the Servicing Fee Rate;
(f) in connection with any Securitization Transaction occurring on or
after January 1, 2006, the Company shall (1) within five (5)
Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to
provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information
and materials specified in paragraphs (i), (ii), (iii) and (vii)
of this subsection (f), and (2) as promptly as practicable
following notice to or discovery by the Company, provide to the
Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (iv) of this subsection (f).
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (1) the
Company, as originator of the Mortgage Loans (including as
an acquirer of Mortgage Loans from a Qualified
Correspondent), or (2) each Third-Party Originator, and (3)
as applicable, each Subservicer, as is requested for the
purpose of compliance
64
with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program
and how long the originator has been engaged in
originating residential mortgage loans, which
description shall include a discussion of the
originator's experience in originating mortgage loans
of a similar type as the Mortgage Loans; information
regarding the size and composition of the originator's
origination portfolio; and information that may be
material, in the good faith judgment of the Purchaser
or any Depositor, to an analysis of the performance of
the Mortgage Loans, including the originators'
credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and
such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated)
against the Company, each Third-Party Originator and
each Subservicer; and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, each
Subservicer and any of the following parties to a
Securitization Transaction, as such parties are
identified to the Company by the Purchaser or any
Depositor in writing in advance of a Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each
Third-Party Originator to provide) Static Pool Information
with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as
provided below) originated by (1) the Company, if the
Company is an originator of Mortgage Loans (including as an
acquirer of Mortgage Loans
65
from a Qualified Correspondent), and/or (2) each Third-Party
Originator. Such Static Pool Information shall be prepared
by the Company (or Third-Party Originator) on the basis of
its reasonable, good faith interpretation of the
requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent that there is reasonably available to the Company (or
Third-Party Originator) Static Pool Information with respect
to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all
of such information shall be provided pursuant to this
paragraph. The content of such Static Pool Information may
be in the form customarily provided by the Company, and need
not be customized for the Purchaser or any Depositor. Such
Static Pool Information for each vintage origination year or
prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life
of the mortgage loans included in the vintage origination
year or prior securitized pool. The most recent periodic
increment must be as of a date no later than 135 days prior
to the date of the prospectus or other offering document in
which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall
be provided in an electronic format that provides a
permanent record of the information provided, such as a
portable document format (pdf) file, or other such
electronic format reasonably required by the Purchaser or
the Depositor, as applicable.
Promptly following notice or discovery of a material error
in Static Pool Information provided pursuant to the
immediately preceding paragraph (including an omission to
include therein information required to be provided pursuant
to such paragraph), the Company shall provide corrected
Static Pool Information to the Purchaser or any Depositor,
as applicable, in the same format in which Static Pool
Information was previously provided to such party by the
Company.
If so requested by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each
Third-Party Originator to provide), at the expense of the
requesting party (to the extent of any additional
incremental expense associated with delivery pursuant to
this Agreement), such agreed-upon procedures letters of
certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized pools for
securitizations closed on or after January 1, 2006 or, in
the case of Static Pool Information with respect to the
Company's or Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as
the Purchaser or such Depositor shall reasonably request.
Such statements and letters shall be addressed to and be for
the benefit of such parties as the Purchaser or such
Depositor shall designate, which may include, by way of
example, any sponsor, any Depositor and
66
any broker dealer acting as underwriter, placement agent or
initial purchaser with respect to a Securitization
Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by
a reliance letter authorizing reliance by the addressees
designated by the Purchaser or such Depositor.
(iii) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding the
Company, as servicer of the Mortgage Loans, and each
Subservicer (each of the Company and each Subservicer, for
purposes of this paragraph, a "Servicer"), as is requested
for the purpose of compliance with Items 1108 of Regulation
AB, including any information for inclusion in any
prospectus, prospectus supplement or other offering document
in connection with any Securitization Transaction. Such
information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been
servicing residential mortgage loans; a general
discussion of the Servicer's experience in servicing
assets of any type as well as a more detailed
discussion of the Servicer's experience in, and
procedures for, the servicing function it will perform
under this Agreement and any Reconstitution
Agreements; information regarding the size,
composition and growth of the Servicer's portfolio of
residential mortgage loans of a type similar to the
Mortgage Loans and information on factors related to
the Servicer that may be material, in the good faith
judgment of the Purchaser or any Depositor, to any
analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage
loans of a type similar to the Mortgage Loans
involving the Servicer have defaulted or
experienced an early amortization or other
performance triggering event because of
servicing during the three-year period
immediately preceding the related Securitization
Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of
material noncompliance with the applicable
servicing criteria with respect to other
securitizations of residential mortgage loans
involving the Servicer as a servicer during the
three-
67
year period immediately preceding the related
Securitization Transaction;
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan
securitization, either due to a servicing
default or to application of a servicing
performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose
of compliance with Item 1108(b)(2) of Regulation
AB;
(C) a description of any material changes during the
three-year period immediately preceding the related
Securitization Transaction to the Servicer's policies
or procedures with respect to the servicing function
it will perform under this Agreement and any
Reconstitution Agreements for mortgage loans of a type
similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk
that an adverse financial event or circumstance
involving the Servicer could have a material adverse
effect on the performance by the Company of its
servicing obligations under this Agreement or any
Reconstitution Agreement;
(E) information regarding advances made by the Servicer on
the Mortgage Loans and the Servicer's overall
servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the
related Securitization Transaction, which may be
limited to a statement by an authorized officer of the
Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage
loans serviced by it during such period, or, if such
statement would not be accurate, information regarding
the percentage and type of advances not made as
required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique
factors involved in servicing loans of a similar type
as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries,
such as through liquidation of mortgaged properties,
sale of defaulted mortgage loans or workouts; and
68
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including
the effect of any grace period, re-aging,
restructuring, partial payments considered current or
other practices with respect to delinquency and loss
experience.
(iv) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the
Exchange Act with respect to any class of asset-backed
securities, the Company shall (or shall cause each
Subservicer and Third-Party Originator to) (1) notify the
Purchaser and any Depositor in writing of (A) any material
litigation or governmental proceedings pending against the
Company, any Subservicer or any Third-Party Originator and
(B) any affiliations or relationships that develop following
the closing date of a Securitization Transaction between the
Company, any Subservicer or any Third-Party Originator and
any of the parties specified in Section 9.01(f)(i)(D) (and
any other parties identified in writing by the requesting
party) with respect to such Securitization Transaction, and
(2) provide to the Purchaser and any Depositor a description
of such proceedings, affiliations or relationships.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement
or any Reconstitution Agreement by any Person (i) into which
the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor
to the Company or any Subservicer, the Company shall provide
to the Purchaser and any Depositor, at least 15 calendar
days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any
Depositor of such succession or appointment and (y) in
writing and in form and substance reasonably satisfactory to
the Purchaser and such Depositor, all information reasonably
requested by the Purchaser or any Depositor in order to
comply with is reporting obligation under Item 6.02 of Form
8-K with respect to any class of asset-backed securities.
(vi) (A) The Company shall be deemed to represent to the
Purchaser and to any Depositor, as of the date on
which information is first provided to the Purchaser
under this Section 9.01(f) that, except as disclosed
in writing to the Purchaser or such Depositor prior to
such date: (1) the Company is not aware and has not
received notice that any default, early amortization
or other performance triggering event has occurred as
to any other securitization due to any act or failure
to act of the Company; (2) the Company has not been
terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or
to application of a servicing performance test or
trigger; (3) no material noncompliance with the
applicable servicing criteria with respect to other
securitizations of residential
69
mortgage loans involving the Company as servicer has
been disclosed or reported by the Company; (4) no
material changes to the Company's policies or
procedures with respect to the servicing function it
will perform under this Agreement and any
Reconstitution Agreement for mortgage loans of a type
similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the related
Securitization Transaction; (5) there are no aspects
of the Company's financial condition that could have a
material adverse effect on the performance by the
Company of its servicing obligations under this
Agreement or any Reconstitution Agreement; (6) there
are no material legal or governmental proceedings
pending (or known to be contemplated) against the
Company, any Subservicer or any Third-Party
Originator; and (7) there are no affiliations,
relationships or transactions relating to the Company,
any Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a
type described in Item 1119 of Regulation AB.
(B) If so requested by the Purchaser or any Depositor on
any date following the date on which information is
first provided to the Purchaser or any Depositor under
this Section 9.01(f), the Company shall, within five
(5) Business Days following such request, confirm in
writing the accuracy of the representations and
warranties set forth in sub clause (A) above or, if
any such representation and warranty is not accurate
as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in
writing, to the requesting party.
(vii) In addition to such information as the Company, as servicer,
is obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any
Depositor, the Company shall provide such information
reasonably available to the Company regarding the
performance or servicing of the Mortgage Loans as is
reasonably required to facilitate preparation of
distribution reports in accordance with Item 1121 of
Regulation AB.
(g) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to
such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under
the Exchange Act with respect to such Securitization Transaction;
each broker dealer acting as underwriter, placement agent or
initial purchaser, each Person who controls any of such parties or
the
70
Depositor (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective present
and former directors, officers, employees and agents of each of
the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material
provided under Sections 4.25, 6.04(ii), 6.06, 9.01(e) and
(f) by or on behalf of the Company, or provided under
Sections 4.25, 6.04(ii), 6.06, 9.01(e) and (f) by or on
behalf of any Subservicer, Subcontractor or Third-Party
Originator (collectively, the "Company Information"), or (B)
the omission or alleged omission to state in the Company
Information a material fact required to be stated in the
Company Information or necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and
not to any other information communicated in connection with
a sale or purchase of securities, without regard to whether
the Company Information or any portion thereof is presented
together with or separately from such other information;
(ii) any failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or
other material when and as required under Sections 4.25,
6.04(ii), 6.06, 9.01(e) and (f), including any failure by
the Company to identify any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB; or
(iii) any breach by the Company of a representation or warranty
set forth in Section 9.01(f)(vi)(A) or in a writing
furnished pursuant to Section 9.01(f)(vi)(B) and made as of
a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach
is not cured by such closing date, or any breach by the
Company of a representation or warranty in a writing
furnished pursuant to Section 9.01(f)(vi)(B) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in sub-clause
(ii) of this Section 9.01(g), the Company shall promptly reimburse
the Purchaser, any Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification
71
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator.
(h) The Purchaser shall indemnify the Company, each affiliate of the
Company, each Person who controls any of such parties or the
Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) and the respective present and
former directors, officers, employees and agents of each of the
foregoing and of the Company, and shall hold each of them harmless
from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any offering materials related to
a Securitization Transaction, including without limitation
the registration statement, prospectus, prospectus
supplement, any private placement memorandum, any offering
circular, any computational materials, and any amendments or
supplements to the foregoing (collectively, the
"Securitization Materials") or (B) the omission or alleged
omission to state in the Securitization Materials a material
fact required to be stated in the Securitization Materials
or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged
omission is other than a statement or omission arising out
of, resulting from, or based upon the Company Information,
provided however that notwithstanding the forgoing, the
parties agree that for the purposes of this Section 9.01(h),
the Purchaser shall mean Xxxxxx Xxxxxxx Mortgage Capital
Inc. and provided further that Xxxxxx Xxxxxxx Mortgage
Capital Inc. shall have no liability under this Section 9.01
(h) with respect to information included in or omitted from
any Securitization Materials prepared in connection with (i)
a Securitization Transaction which occurs after the Mortgage
Loans have been sold in a Whole Loan Transfer to a third
party which is not Xxxxxx Xxxxxxx Mortgage Capital Inc. or
an Affiliate of Xxxxxx Xxxxxxx Mortgage Capital Inc. or (ii)
any Securitization Transaction in which the issuer,
depositor or transferor is an entity other than Xxxxxx
Xxxxxxx Mortgage Capital Inc. or an Affiliate of Xxxxxx
Xxxxxxx Mortgage Capital Inc.
The Purchaser and the Company acknowledge and agree that the purpose of
Section 9.01(f) is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Neither the Purchaser nor any Depositor shall exercise its right
to request delivery of information or other performance
72
under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder. The Company acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the
Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Company shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Company, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Purchaser or any Depositor to be necessary in order
to effect such compliance.
(i) If the Purchaser so requests, execute an Assignment, Assumption
and Recognition Agreement in the form attached hereto as Exhibit D.
In the event that the Purchaser has elected to have the Company hold
record title to the Mortgages, prior to the date of any Whole Loan Transfer,
Agency Sale of Securitization Transaction the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable
to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser shall
pay all preparation and recording costs associated therewith, if the
Assignments of Mortgage have not been previously prepared and recorded in the
name of the Purchaser or its designee. The Company shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the trustee upon the Company's
receipt thereof. Additionally, the Company shall prepare and execute, at the
direction of the Purchaser, any note endorsements in connection with any and
all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to Whole Loan
Transfers, Agency Sales or Securitization Transactions shall remain subject to
this Agreement and shall continue to be serviced in accordance with the terms
of this Agreement and with respect thereto this Agreement shall remain in full
force and effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part
of the Company:
73
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which
continues unremedied for a period of five days after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Purchaser;
or
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of
the Company set forth in this Agreement or in the Custodial
Agreement which continues unremedied for a period of 90 days after
the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by the
Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business in
any jurisdiction where the Mortgaged Property is located if such
license is required; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Company and such
decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Company or of or relating to all or substantially
all of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of
any applicable insolvency, bankruptcy or reorganization statute,
make an assignment for the benefit of its creditors, voluntarily
suspend payment of its obligations or cease its normal business
operations for three Business Days; or
(vii) the Company ceases to meet the qualifications of a Xxxxxx
Mae/Xxxxxxx Mac servicer; or
(viii) the Company attempts to assign its right to servicing
compensation hereunder or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its duties
hereunder or any portion thereof in violation of Section 8.04; or
(ix) the taking of any action by the Company, any Company Employee, any
Affiliate or any director or employee thereof that constitutes
fraud or criminal activity in the performance of its obligations
under this Agreement or the indictment of any of the foregoing
Persons for criminal activity related to the mortgage origination
or servicing activities of the Company, in each case, where such
indictment
74
materially and adversely affects the ability of the Company to
perform its obligations under this Agreement (subject to the
condition that such indictment is not dismissed within ninety (90)
days).
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatever rights the Purchaser may have at
law or equity to damages, including injunctive relief and specific
performance, the Purchaser, by notice in writing to the Company, may terminate
all the rights and obligations of the Company under this Agreement, subject to
Section 12.01, and in and to the Mortgage Loans and the proceeds thereof.
Notwithstanding any provision of this Agreement to the contrary, in the event
the Company is terminated pursuant to the terms of this Section 10.01, no
liquidated damages shall be payable to the Company pursuant to Section 11.02
hereof.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 12.01. Upon written request from any Purchaser,
the Company shall prepare, execute and deliver to the successor entity
designated by the Purchaser any and all documents and other instruments, place
in such successor's possession all Mortgage Files, and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents, at the
Company's sole expense. The Company shall cooperate with the Purchaser and
such successor in effecting the termination of the Company's responsibilities
and rights hereunder, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Company to the Custodial Account, Subsidy Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection with
the termination or resignation (as described in Section 8.04) of the Company
hereunder, either (i) the successor servicer shall represent and warrant that
it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the
servicing of the Mortgage Loans that are registered with MERS, or (ii) the
Company shall cooperate with the successor servicer either (x) in causing MERS
to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be necessary to
remove such Mortgage Loan(s) from the MERS(R) System or (y) in causing MERS to
designate on the MERS(R) System the successor servicer as the servicer of such
Mortgage Loan.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company
in the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall
75
extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; (ii) mutual
consent of the Company and the Purchaser in writing; or (iii) termination
pursuant to Section 10.01 or 11.02.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company
may have hereunder, without cause as provided in this Section 11.02. Any such
notice of termination shall be in writing and delivered to the Company and any
Rating Agency by registered mail as provided in Section 12.05.
Other than with respect to a termination of the Company, as servicer,
pursuant to Section 10.01 hereof, the Company shall be entitled to receive, as
such liquidated damages, upon the transfer of the servicing rights, an amount
equal to 2.75% of the aggregate outstanding principal amount of the Mortgage
Loans as of the termination date paid by the Purchaser to the Company with
respect to all of the Mortgage Loans for which a servicing fee rate of .250%
is paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02 the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
Section 8.02 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Company under this Agreement
simultaneously with the termination of Company's responsibilities, duties and
liabilities under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree. In the
76
event that the Company's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Company shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 12.01 and shall in no event relieve the
Company of liability for the representations and warranties made pursuant to
Sections 3.01 and 3.02 and the remedies available to the Purchaser under
Section 3.03, it being understood and agreed that the provisions of such
Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 3.01, except for subsection (h) with respect
to the sale of the Mortgage Loans and subsections (i) and (k) thereof,
whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Company,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Company or termination of this Agreement
pursuant to Section 8.04, 10.01, 11.01 or 11.02 shall not affect any claims
that any Purchaser may have against the Company arising out of the Company's
actions or failure to act prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the funds
in the Custodial Account, Subsidy Account and Escrow Account and all Mortgage
Files and related documents and statements held by it hereunder and the
Company shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more
fully and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
77
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury with
respect to, or any litigation based on, or arising out of, under, or in
connection with, this Agreement, or any other documents and instruments
executed in connection herewith, or any course of conduct, course of dealing,
statements (whether oral or written), or actions of the Company or the
Purchaser. This provision is a material inducement for the Purchaser to enter
into this Agreement.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing issues:
Xxxxx Fargo Bank, N.A.
1 Home Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
Fax: 515/000-0000
(ii) if to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
In each instance, with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
Fax: 515/000-0000
78
or such other address as may hereafter be furnished to the
Purchaser in writing by the Company;
(ii) if to Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
Fax: (000) 000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the Company
in writing by the Purchaser;
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
the Company shall be rendered as an independent contractor and not as agent
for the Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Section 8.04, this
Agreement shall inure to the benefit of and be binding upon, and shall be
enforceable by, the Company and the Purchaser and their respective successors
and assigns, including without limitation, any trustee appointed by the
Purchaser with respect to any Whole Loan Transfer, Agency Sale or
Securitization Transaction. The parties agree that this Agreement and
signature pages thereof may be transmitted between them by facsimile and that
faxed signatures may constitute original signatures and that a faxed signature
page containing the signature (faxed or original) is binding on the parties.
Section 12.09 Recordation of Assignments of Mortgage.
79
To the extent permitted by applicable law, as to each Mortgage Loan
which is not a MERS Mortgage Loan, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Company's expense in the event recordation is either necessary under
applicable law or requested by the Purchaser at its sole option.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company
to assign, in whole or in part, its interest under this Agreement with respect
to some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form attached as Exhibit D, and the
assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans. All references to the
Purchaser in this Agreement shall be deemed to include its assignee or
designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to solicit
the refinancing of any Mortgage Loan. It is understood and agreed that neither
(1) promotions undertaken by either party or any affiliate which are directed
to the general public at large, including, without limitation, mass mailings
based upon commercially acquired mailing lists, newspaper, radio, television
advertisements nor (ii) serving the refinancing needs of a Mortgagor who,
without solicitation, contacts either party in connection with the refinance
of such Mortgage or Mortgage Loan, shall constitute solicitation under this
Section.
Section 12.12 Further Agreements.
The Purchaser and the Company each agree to execute and deliver to the other
such additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
[Intentionally Blank - Next Page Signature Page]
80
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of
the day and year first above written.
XXXXXX XXXXXXX XXXXX FARGO BANK, N.A.
MORTGAGE CAPITAL INC.
Purchaser Company
By:_______________________________ By:_______________________________
Name:_____________________________ Name:_____________________________
Title:____________________________ Title:____________________________
81
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _________________, known to me to be
_______________________ of Xxxxx Fargo Bank, N.A., the corporation that
executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal
the day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires___________________
82
STATE OF )
) ss:
COUNTY OF )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _____________________________________,
known to me to be the ______________________________ of
______________________________, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal
the day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires___________________
83
EXHIBIT A
---------
MORTGAGE LOAN SCHEDULE
(WFHM 2005-W102)
EXHIBIT B
---------
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be retained by the
Company in the Servicing File or delivered to the Custodian pursuant to
Sections 2.01 and 2.03 of the Seller's Warranties and Servicing Agreement to
which this Exhibit is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of ______________________________ without
recourse" and signed in the name of the Company by an authorized
officer (in the event that the Mortgage Loan was acquired by the
Company in a merger, the signature must be in the following form:
"[Company], successor by merger to [name of predecessor]"; and in
the event that the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the signature
must be in the following form: "[Company], formerly known as
[previous name]").
2. The original of any guarantee executed in connection with the
Mortgage Note.
3. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for
recordation. If in connection with any Mortgage Loan, the Company
cannot deliver or cause to be delivered the original Mortgage with
evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office
retains the original recorded Mortgage, the Company shall deliver
or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Company
stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Company; or (ii) in the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office or by the title
insurance company that issued the title policy to be a true and
complete copy of the original recorded Mortgage.
Further, with respect to MERS Mortgage Loans, (a) the Mortgage
names MERS as the Mortgagee and (b) the requirements set forth in
the Electronic Tracking Agreement have been satisfied, with a
conformed recorded copy to follow as soon as the same is received
by the Company.
4. The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
5. The original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except for the
insertion of the name of the assignee and recording information).
The Assignment of Mortgage must be duly recorded only if
recordation is either necessary under applicable law or commonly
required by private institutional mortgage investors in the area
where the Mortgaged Property is located or on direction of the
Purchaser. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of
Mortgage is not to be recorded, the Assignment of Mortgage shall
be delivered in blank. If the Mortgage Loan was acquired by the
Company in a merger, the Assignment of Mortgage must be made by
"[Company], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by the Company while
doing business under another name, the Assignment of Mortgage must
be by "[Company], formerly know as [previous name]."
6. Originals or certified true copies of documents sent for
recordation of all intervening assignments of the Mortgage with
evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains
the original recorded assignments of mortgage, the Company shall
deliver or cause to be delivered to the Custodian, a photocopy of
such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officer's
Certificate of the Company stating that such intervening
assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate
public recording office or by the title insurance company that
issued the title policy to be a true and complete copy of the
original recorded intervening assignment of mortgage will be
promptly delivered to the Custodian upon receipt thereof by the
Company; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening
assignment or in the case where an intervening assignment is lost
after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office
to be a true and complete copy of the original recorded
intervening assignment.
7. The electronic form of PMI Policy as identified by certificate
number.
8. The original mortgagee policy of title insurance or evidence of
title or, in the event such original title policy is unavailable,
a certified true copy of the related
2
policy binder or commitment for title certified to be true and
complete by the title insurance company.
9. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
10. Original or a copy of a Power of Attorney, if applicable.
With respect to each Mortgage Loan, the Servicing File shall include each of
the following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
11. The original hazard insurance policy and, if required by law,
flood insurance policy, in accordance with Section 4.10 of the
Agreement.
12. Residential loan application.
13. Mortgage Loan closing statement.
14. Verification of employment and income, unless originated under the
Company's Limited Documentation program, Xxxxxx Xxx Timesaver
Plus.
15. Verification of acceptable evidence of source and amount of down
payment.
16. Credit report on the Mortgagor.
17. Residential appraisal report.
18. Photograph of the Mortgaged Property.
19. Survey of the Mortgage property, if required by the title company
or applicable law.
20. Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e. map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
21. All required disclosure statements.
22. If available, termite report, structural engineer's report, water
potability and septic certification.
23. Sales contract, if applicable.
24. Evidence of payment of taxes and insurance premiums, insurance
claim files, correspondence, current and historical computerized
data files, and all other
3
processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage
Loan.
25. Amortization schedule, if available.
26. Payment history for any Mortgage Loan that has been closed for
more than 90 days.
27. Original or a copy of a power of attorney, if applicable.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in
returning any recorded document, the Company shall deliver to the Custodian,
within 240 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv)
above. An extension of the date specified in (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
4
EXHIBIT C
---------
CUSTODIAL AGREEMENT
EXHIBIT D
---------
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
_____________, 20__, ("Agreement") among Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Assignor"), [_____________________] ("Assignee") and Xxxxx Fargo Bank, N.A.
(the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain mortgage loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Seller's
Warranties and Servicing Agreement (the "Purchase Agreement"), dated as
December 1, 2005, between the Assignor, as purchaser, and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage
Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Closing Date"), the Company
shall and does hereby recognize that the Assignor will transfer the Mortgage
Loans and assign its rights under the Purchase Agreement (solely to the extent
set forth herein) to the Assignee [and that the Assignee will thereafter
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
and this Agreement to [________________] (the "Trust") created pursuant to a
Pooling and Servicing Agreement, dated as of [________________] (the "Pooling
Agreement"), among the Assignor, [________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee") and [________________], as servicer (including its successors
in interest and any successor servicer under the Pooling Agreement, the
"Servicer")]. The Company hereby acknowledges and agrees that from and after
the date hereof (i) the [Assignee] [Trust] will be the owner of the Mortgage
Loans, (ii) the Company shall look solely to the [Assignee] [Trust] for
performance of any obligations of the Assignor [insofar as they relate to the
enforcement of the representations, warranties and covenants with respect to
the Mortgage Loans], (iii) the [Assignee] [Trust (including the Trustee and
the Servicer acting on the Trust's behalf)] shall have all the rights and
remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Purchase Agreement, including, without limitation, the
enforcement of the document delivery requirements set forth in Section [___]
of the Purchase Agreement, and shall be entitled to enforce all of the
obligations of the Company thereunder insofar as they relate to the Mortgage
Loans, and (iv) all references to the Purchaser [(insofar as they relate to
the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Company)] under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to
refer to the [Assignee] [Trust (including the Trustee and the Servicer acting
on the Trust's behalf)]. [Neither the Company nor the Assignor shall amend or
agree to amend, modify, waiver, or otherwise alter any of the terms or
provisions of the Purchase Agreement which amendment, modification, waiver or
other alteration would in any way affect the Mortgage Loans or the Company's
performance under the Purchase Agreement with respect to the Mortgage Loans
without the prior written consent of the Trustee.]
3. Notwithstanding any statement to the contrary in Section 2 above,
the Company shall and does hereby acknowledge that the indemnification
provisions set forth in the sixth paragraph of Section 3.03, Section 8.01 and
Section 9.01(f) of the Purchase Agreement shall be available to and for the
benefit of the Assignor, the Assignee [and the Trust (including the Trustee
and the Servicer acting on the Trust's behalf)], as provided in the Purchase
Agreement.
[SECTIONS 4 AND 5 TO BE INCLUDED WITH RESPECT TO WHOLE LOAN TRANSFERS ONLY]
Representations and Warranties of the Assignor
4. The Assignor warrants and represents to the Assignee as of the
date hereof that:
2
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all
claims and encumbrances whatsoever;
b. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to
the Company with respect to the Purchase Agreement or the Mortgage
Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Purchase
Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing obligations under the Purchase Agreement. The
Assignor has no knowledge of, and has not received notice of, any
waivers under or amendments or other modifications of, or assignments of
rights or obligations under, the Purchase Agreement or the Mortgage
Loans; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security from, or otherwise approached or
negotiated with respect to the Mortgage Loans, any interest in the
Mortgage Loans or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action which would constitute
a distribution of the Mortgage Loans under the Securities Act of 1933
(the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto.
Representations and Warranties of the Assignee
5. The Assignee warrants and represents to the Assignor and the
Company as of the date hereof that:
a. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase Agreement and the
Mortgage Loans, and from and after the date hereof, the Assignee assumes
for the benefit of each of the Company and the Assignor all of the
Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not
been registered under the 33 Act or the securities laws of any state;
c. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this
connection, neither the Assignee nor any person authorized to act
therefor has offered to sell the Mortgage Loans by means of any general
advertising or general solicitation within the meaning of Rule 502(c) of
US Securities and Exchange Commission Regulation D, promulgated under
the 1933 Act;
3
d. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and
risks of investment in the Mortgage Loans;
e. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or
the Company;
f. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar
security to, or solicited any offer to buy or accepted a transfer,
pledge or other disposition of the Mortgage Loans, any interest in the
Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the
Mortgage Loans under the 33 Act or which would render the disposition of
the Mortgage Loans a violation of Section 5 of the 33 Act or require
registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the
Mortgage Loans; and
g. Either (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or a plan (also
"Plan") within the meaning of section 4975(e)(1) of the Internal Revenue
Code of 1986 ("Code"), and the Assignee is not directly or indirectly
purchasing the Mortgage Loans on behalf of, investment manager of, as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee's purchase of the Mortgage Loans will not result in a
prohibited transaction under section 406 of ERISA or section 4975 of the
Code.]
Miscellaneous
6. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Purchase Agreements is: [
[____________________________
_____________________________
_____________________________
_____________________________
Attention: __________________
7. The Assignee's wire transfer instructions for purposes of all
remittances and payments related to the Mortgage Loans and the Purchase
Agreement is:
4
[
Attention: _________________
8. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
9. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
10. This Agreement shall inure to the benefit of [(i)] the successors
and assigns of the parties hereto [and (ii) the Trust (including the Trustee
and the Servicer acting on the Trust's behalf)]. Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
11. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (solely with respect to the Mortgage Loans) by Assignor to Assignee
and nothing contained herein shall supersede or amend the terms of the
Purchase Agreement.
12. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
13. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans,
the terms of this Agreement shall control.
14. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to
such terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:_____________________________________
Name:___________________________________
Its:____________________________________
[____________________________]
By:_____________________________________
Name:___________________________________
Its:____________________________________
XXXXX FARGO BANK, N.A.
By:_____________________________________
Name:___________________________________
Its:____________________________________
6
EXHIBIT E
---------
SARBANES CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Purchaser], [the Depositor], and
the [Master Servicer] [Securities Administrator] [Trustee], and their
officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with
the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans by the Servicer during 200[ ]
that were delivered by the Servicer to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee] pursuant to the Agreement
(collectively, the "Servicer Servicing Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made, in
the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the
Servicer Servicing Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the
Servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Servicer has fulfilled its
obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by any Subservicer or
Subcontractor pursuant to the Agreement have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:
By:_____________________________________
Name:___________________________________
Its:____________________________________
EXHIBIT F
---------
DATA FILE
(1) the Company's Mortgage Loan identifying number;
(2) the street address of the Mortgaged Property including the city,
state, county and zip code;
(3) a code indicating whether the Mortgaged Property is a single
family residence, a 2-4 family dwelling, a PUD, a cooperative, a
townhouse, manufactured housing or a unit in a condominium
project;
(4) the Mortgage Interest Rate as of the Cut-off Date;
(5) the current Monthly Payment;
(6) loan term, number of months;
(7) the stated maturity date;
(8) the Stated Principal Balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of
principal due on or before the Cut-off Date;
(9) the Loan-to-Value Ratio;
(10) a code indicating whether the Mortgage Loan is an Interest Only
Mortgage Loan;
(11) a code indicating whether the Mortgage Loan is a temporary buydown
(Y or N);
(12) the Servicing Fee Rate;
(13) a code indicating the mortgage insurance provider and percent of
coverage, if applicable;
(14) a code indicating whether the Mortgage Loan is covered by
lender-paid mortgage insurance (Y or N);
(15) a code indicating whether the Mortgage Loan is a Time$aver(R)
Mortgage Loan (Y or N);
(16) the Mortgagor's first and last name;
(17) a code indicating whether the Mortgaged Property is
owner-occupied;
(18) the remaining months to maturity from the Cut-off Date, based on
the original amortization schedule;
(19) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(20) the actual next Due Date of the Mortgage Loan;
(21) the last Due Date on which a Monthly Payment was actually applied
to the actual principal balance;
(22) the original principal amount of the Mortgage Loan;
(23) a code indicating the purpose of the loan (i.e., purchase,
financing, rate/term refinancing, cash-out refinancing);
(24) the Mortgage Interest Rate at origination;
(25) the amount on which the first Monthly Payment was due on the
Mortgage Loan;
(26) a code indicating the documentation style (i.e., full (providing
two years employment verification - 2 years W-2's and current pay
stub or 2 years 1040's for self employed borrowers), alternative
or reduced);
(27) a code indicating if the Mortgage Loan is subject to a PMI Policy;
(28) the Appraised Value of the Mortgage Property;
(29) the sale price of the Mortgaged Property, if applicable;
(30) the Mortgagor's Underwriting FICO Score;
(31) term of prepayment penalty in years;
(32) a code indicating the product type;
(33) a code indicating the credit grade of the Mortgage Loan;
(34) the unpaid balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of all payments of
principal;
(35) the Note date of the Mortgage Loan;
(36) the mortgage insurance certificate number and percentage of
coverage, if applicable;
(37) the number of borrowers;
(38) the Mortgagor's and Co-Mortgagor's (if any) date of birth;
(39) if the Mortgage Loan is a MERS Mortgage Loan, the MIN Number for
each MERS Mortgage Loan;
(40) employer name;
(41) subsidy program code;
(42) servicer name;
(43) the combined Loan-to-Value Ratio;
(44) the total Loan-to-Value Ratio;
(45) whether the Mortgage Loan is convertible (Y or N);
(46) a code indicating whether the Mortgage Loan is a relocation loan
(Y or N);
(47) a code indicating whether the Mortgage Loan is a leasehold loan (Y
or N);
(48) a code indicating whether the Mortgage Loan is an Alt A loan (Y or
N);
(49) a code indicating whether the Mortgage Loan is a no ratio loan (Y
or N);
(50) a code indicating whether the Mortgage Loan is a Pledged Asset
Mortgage Loan (Y or N);
(51) effective LTV percentage for Pledged Asset Mortgage Loans;
(52) citizenship type code;
(53) a code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan balance;
(54) the name of the client for which the Mortgage Loan was originated;
(55) the program code;
(56) the loan sub doc code;
(57) a code indicating amortization type (1 or 2);
(58) interest only note payment;
(59) first full amortization payment date;
(60) interest only term, number of months;
(61) remaining interest only term, number of months;
(62) a code indicating whether the Mortgage Loan is a 2nd lien (Y or
N);
(63) a code indicating borrower verification of assets or lender
verification of assets (L or B);
(64) combined current loan balance;
(65) the remaining interest-only term for Interest Only Mortgage Loans;
The Company shall provide the following
For the Home Mortgage Disclosure Act (HMDA):
--------------------------------------------
(66) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(67) the Mortgagor's and co-Mortgagor's (if applicable) race;
(68) lien status;
(69) for cash-out refinance loans, the cash purpose;
(70) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(71) the Mortgagor's and co-Mortgagor's (if applicable) social security
numbers;
(72) the number of units for the property;
(73) the year in which the property was built;
(74) the qualifying monthly income of the Mortgagor;
(75) the number of bedrooms contained in the property;
(76) a code indicating first time buyer (Y or N);
(77) the total rental income, if any;
The Seller shall provide the following
for the adjustable rate Mortgage Loans (if applicable):
-------------------------------------------------------
(78) the maximum Mortgage Interest Rate under the terms of the Mortgage
Note;
(79) the Periodic Interest Rate Cap;
(80) the Index;
(81) the next interest rate and payment Adjustment Date;
(82) the Mortgage Interest Rate adjustment cap and all subsequent
interest rate Adjustment Dates;
(83) the Gross Margin; and
(84) the lifetime interest rate cap.
EXHIBIT G
---------
INDEMNIFICATION AGREEMENT
Indemnification Agreement dated as of ___________, 200__ (the
"Agreement") between Xxxxx Fargo Bank, N.A. ("Company"), ___________ (the
"Trust/Issuer" and _____________________ (the "Depositor").
Reference is made to the issuance of ____________________, Series
________, Asset-Backed Certificates (the "Certificates"), pursuant to a
[Pooling and Servicing Agreement or Trust Agreement], dated as of
_______________ (the "[Pooling and Servicing Agreement/Trust Agreement"),
among the Depositor as depositor, _________________ as master servicer and
_____________________ as trustee. The Depositor will sell certain of the
Certificates to _______________ (the "Underwriter") for offer and sale
pursuant to the terms of an Underwriting Agreement, dated ______________,
____, between the Depositor and the Underwriter. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
Reference is also made to the information provided by the Company
contained in the Prospectus Supplement, under the caption, "The
Originators--______________" and "The Servicer--"__________" and any
information furnished by the Company to facilitate the Purchaser's compliance
with Regulation AB of the Securities Act of 1933, as amended from time to
time, and included in or incorporated by reference in the Prospectus
Supplement (collectively, the "Company Information").
1. (a) Company agrees to indemnify and hold harmless the
Trust/Issuer and Depositor and each of its directors and officers and
affiliates and each person, if any, who controls the Depositor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a "Depositor Indemnified Party"), against any and all actual losses,
claims, expenses, damages or liabilities to which the Depositor Indemnified
Party may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Company Information or
omission to state therein, a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which such statements were made, not misleading (in each case,
regardless of whether a final judgment has been entered by a finder of fact);
and will reimburse any such reasonable legal or other expenses actually
incurred by the Depositor Indemnified Party in connection with investigating
or defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Company may otherwise
have.
(b) The Depositor agrees to indemnify and hold harmless
the Company and each of its directors and officers and affiliates and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange
Act (each, a "Company Indemnified Party" and collectively with any Depositor
Indemnified Party, "Indemnified Parties"), against any and all actual losses,
claims, expenses, damages or liabilities to which the Company Indemnified
Party may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement other
than with respect to the Company Information, or omission to state therein a
material fact required to be stated therein or necessary to make the
statements made therein not misleading (in each case, regardless of whether a
final judgment has been entered by a finder of fact); and will reimburse such
reasonable legal or other expenses actually incurred by the Company
Indemnified Party in connection with investigating or defending any such loss,
claim, damage, liability or action. This indemnity agreement will be in
addition to any liability which the Depositor may otherwise have.
(c) Promptly after receipt by an Indemnified Party under
this Section 1 of notice of any claim or the commencement of any action
described therein, such Indemnified Party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 1, notify the
indemnifying party of such claim or the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the indemnifying party
from any liability that it may have to the Indemnified Party (a) under this
Agreement except to the extent that the omission to notify the indemnifying
party with respect to this Agreement has a material adverse effect on the
indemnifying party's ability to interpose an adequate defense to such action
or (b) other than under this Agreement. In case any such action is brought
against the Indemnified Party, and it notifies the indemnifying party of the
commencement thereof, the Indemnifying Party will be entitled to participate
therein, and, to the extent that it may wish to do so, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnified Party (who shall not,
except with the consent of the Indemnified Party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to the
Indemnified Party under this Section 1, the indemnifying party shall not be
liable for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation.
The Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of the Indemnified
Party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing (which authorization shall not be
unreasonably withheld); (ii) a conflict or potential conflict exists (based on
advice of counsel to the Indemnified Party) between the Indemnified Party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the Indemnified Party)
or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the Indemnified Party, in
which case, if the Indemnified Party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of the Indemnified Party, it being
understood, however, the indemnifying party shall not, in connection with any
one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses
of more than one separate firm of attorneys at any time for the Indemnified
Party, which firm shall be designated in writing by the Company, in the case
of Company Indemnified Parties, or by the Depositor, in the case of Depositor
Indemnified Parties.
The Indemnified Party, as a condition of the indemnity agreements
contained in Section 1(a), Section 1(b) and Section 1(c), shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. The indemnifying party shall not be liable for any settlement
of any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless the Indemnified Party
from and against any loss or liability (to the extent set forth in Section
1(a), Section 1(b) or Section 1(c) as applicable) by reason of such settlement
or judgment.
2. All demands, notices and communications hereunder shall be
in writing and shall be deemed to have been duly given if personally delivered
to or mailed by registered mail, postage prepaid, or transmitted by facsimile
or electronic mail and confirmed by similar mailed writing as follows:
(i) if to the Company:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
(ii) with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
Fax: 515/000-0000
or such other address as may hereafter be furnished to the
Depositor in writing by the Company;
(iii) if to the Depositor:
@
@
@
@
or such other address as may hereafter be furnished to the Company
in writing by the Depositor.
(iv) if to the Trust/Issuer:
@
@
@
@
or such other address as may hereafter be furnished to the Company
in writing by the Trust/Issuer.
3. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an
original, but all of such counterparts shall together constitute one
instrument.
4. This Agreement shall be construed in accordance with the
laws of the State of New York.
IN WITNESS WHEREOF, the Depositor and Company have caused their
names to be signed by their respective officers thereunto duly authorized as
of the date first above written.
XXXXX FARGO BANK, N.A.
Company
By:____________________________
Name:
Title:
__________________________________
Depositor
By:______________________________
Name:
Title:
EXHIBIT H
FORM OF COMPANY OFFICER'S CERTIFICATE
I, ____________, hereby certify that I am the duly elected ____________ of
Xxxxx Fargo Bank, N.A., an institution organized under the laws of the United
States (the "Company") and state as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of the
articles of association of the Company which are in full force and
effect on the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of the
bylaws of the Company which are in effect on the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of the
Mortgage Banking Committee of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Seller's
Warranties and Servicing Agreement dated as of _________ by and between
the Company and the Purchaser (the "Seller's Warranties and Servicing
Agreement") and the Custodial Agreement among the Purchaser, the Company
and ____________ as ("Custodian"), collectively (the "Agreements"), by
original signature, and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original or facsimile signature, and each
such resolutions are in effect on the date hereof.
5. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by the Agreements; or (ii) any required
consent, approval, authorization or order has been obtained by the
Company.
6. To the best of my knowledge, neither the consummation of the
transactions contemplated by, nor the fulfillment of the terms of the
Agreements, conflicts or will conflict with or results or will result in
a breach of, or constitutes or will constitute a default under, the
charter or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by which it
is bound or to which it is subject, or any statute or order, rule,
regulation, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which
it is bound.
7. There are no actions, suits or proceedings pending or, to the best of my
knowledge, threatened against or affecting the Company that would
materially and adversely affect the Company's ability to perform its
obligations under the Agreements. No proceedings looking toward merger,
consolidation or liquidation, dissolution or bankruptcy of the Company
are pending or contemplated.
8. The Company is duly authorized to engage in the transactions described
and contemplated by the Agreements.
9. Capitalized terms used but not defined herein shall have the meanings
assigned in the Seller's Warranties and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed by name and affixed the
seal of the Company.
Dated: By: ______________________________
Name:_____________________________
[Seal] Title:____________________________
I, _____________, ______________ of Xxxxx Fargo Bank, N.A., hereby
certify that _____________ is the duly elected, qualified and acting
_____________ of the Company and that the signature appearing above is
his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By: ______________________________
Name:_____________________________
Title:____________________________
EXHIBIT I
FORM OF OPINION OF COUNSEL
__________________
__________________
__________________
__________________
Re: Xxxxx Fargo Bank, N.A.
Mortgage Loan Series ___________________
Dear Sir/Madam:
I am ___________________ of Xxxxx Fargo Bank, N.A. and have acted as counsel
to Xxxxx Fargo Bank, N.A. (the "Company"), with respect to certain matters in
connection with the sale by the Company of the mortgage loans designated as
Mortgage Loan Series ___________________ (the "Mortgage Loans") pursuant to
that certain Seller's Warranties and Servicing Agreement by and between the
Company and ___________________ (the "Purchaser"), dated as of
___________________, 20__, (the "Agreement"), which sale is in the form of
whole Mortgage Loans. Capitalized terms not otherwise defined herein have the
meanings set forth in the Agreement.
I have examined the following documents:
1. the Agreement;
2. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed
necessary and relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreement. I
have assumed the authenticity of all documents submitted to me as originals,
the genuineness of all signatures, the legal capacity of natural persons and
the conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated by
the Agreement, the Custodial Agreement and all requisite power,
authority and legal right to execute and deliver the Agreement, the
Custodial Agreement and the Mortgage Loans, and to perform and observe
the terms and conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Agreement, each dated as of ___________________, 20__, by
and between the Company and the Purchaser, and (b) any other document
delivered prior hereto or on the date hereof in connection with the sale
and servicing of the Mortgage Loans in accordance with the Agreement
was, at the respective times of such signing and delivery, and is, as of
the date hereof, duly elected or appointed, qualified and acting as such
officer or attorney-in-fact, and the signatures of such persons
appearing on such documents are their genuine signatures.
4. Each of the Agreement, the Custodial Agreement, and the Mortgage Loans,
has been duly authorized, executed and delivered by the Company and is a
legal, valid and binding agreement enforceable in accordance with its
terms, subject to the effect of insolvency, liquidation, conservatorship
and other similar laws administered by the Federal Deposit Insurance
Corporation affecting the enforcement of contract obligations of insured
banks and subject to the application of the rules of equity, including
those respecting the availability of specific performance, none of which
will materially interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in
order to complete the transactions contemplated by the Agreement and the
Custodial Agreement and in order to execute the endorsements to the
Mortgage Notes and the assignments of the Mortgages, and the original or
facsimile signature of the officer at the Company executing the
Agreement, the Custodial Agreement, the endorsements to the Mortgage
Notes and the assignments of the Mortgages represents the legal and
valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreement, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by
the Agreement and the Custodial Agreement; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreement and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement or instrument
to which the Company is a party or by which it is bound or to which it
is subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my
opinion, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would
draw into question the validity of the Agreement and the Custodial
Agreement, or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Agreement and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested
to the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate
such proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreement is sufficient fully to transfer all
right, title and interest of the Company thereto as noteholder and
mortgagee, apart from the rights to service the Mortgage Loans pursuant
to the Agreement.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes
to the Purchaser. Upon the completion of the endorsement of the Mortgage
Notes and the completion of the assignments of the Mortgages, and the
recording thereof, the endorsement of the Mortgage Notes, the delivery
to the Custodian of the completed assignments of the Mortgages, and the
delivery of the original endorsed Mortgage Notes to the Custodian would
be sufficient to permit the entity to which such Mortgage Note is
initially endorsed at the Purchaser's direction, and to whom such
assignment of Mortgages is initially assigned at the Purchaser's
direction, to avail itself of all protection available under applicable
law against the claims of any present or future creditors of the
Company, and would be sufficient to prevent any other sale, transfer,
assignment, pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
__________________
__________________
__________________/__________________
EXHIBIT J
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company][Name of
Subservicer] shall address, as a minimum, the criteria identified below
as "Applicable Servicing Criteria"
------------------------------------------------------------------------------------------------------------------------------------
Reg AB Servicing Criteria Applicable Inapplicable
Reference Servicing Criteria Servicing Criteria
------------------ ------------------------------------------------------------------------- ------------------- -------------------
General Servicing Considerations
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
1122(d)(1)(ii) such servicing activities.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Any requirements in the transaction agreements to maintain
1122(d)(1)(iii) a back-up servicer for the mortgage loans are maintained.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Cash Collection and Administration
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
1122(d)(2)(ii) personnel.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
1122(d)(2)(iii) as specified in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Unissued checks are safeguarded so as to prevent unauthorized
1122(d)(2)(vi) access.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
1122(d)(2)(vii) agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Investor Remittances and Reporting
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage loans
1122(d)(3)(i) serviced by the Servicer.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
1122(d)(3)(iii) other number of days specified in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Reg AB Servicing Criteria Applicable Inapplicable
Reference Servicing Criteria Servicing Criteria
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Pool Asset Administration
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
1122(d)(4)(i) loan documents.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Mortgage loan and related documents are safeguarded as required
1122(d)(4)(ii) by the transaction agreements
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number
of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g.,
1122(d)(4)(iv) escrow) in accordance with the related mortgage loan documents.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's unpaid
1122(d)(4)(v) principal balance.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
1122(d)(4)(vi) asset documents.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls, letters
and payment rescheduling plans in cases where delinquency is
1122(d)(4)(viii) deemed temporary (e.g., illness or unemployment).
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on the
1122(d)(4)(ix) related mortgage loan documents.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on
at least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or
such other number of days specified in the transaction
1122(d)(4)(x) agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
1122(d)(4)(xi) number of days specified in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
Servicer's funds and not charged to the obligor, unless the
1122(d)(4)(xii) late payment was due to the obligor's error or omission.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------ ------------------------------------------------------------------------- ------------------- -------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
1122(d)(4)(xv) is maintained as set forth in the transaction agreements.
------------------------------------------------------------------------------------------------------------------------------------
