Exhibit 99.2
Execution
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the
1st day of January, 1999, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and AURORA
LOAN SERVICES INC., a Delaware corporation ("the Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans
identified on Schedule I hereto (the "Serviced Mortgage Loans") on a
servicing-retained basis to Structured Asset Securities Corporation ("SASCO"),
which in turn has conveyed the Serviced Mortgage Loans to The First National
Bank of Chicago, as trustee (the "Trustee") under a trust agreement dated as
of January 1, 1999 (the "Trust Agreement"), among the Trustee, Norwest Bank
Minnesota, National Association, as master servicer ("Norwest," and together
with any successor master servicer appointed pursuant to the provisions of the
Trust Agreement, the "Master Servicer") and SASCO, as depositor
WHEREAS, Xxxxxx Capital continues to own the servicing rights to the
Serviced Mortgage Loans, and may freely transfer such rights, subject to the
terms hereof.
WHEREAS, Xxxxxx Capital desires that the Servicer service the
Serviced Mortgage Loans, and the Servicer has agreed to do so, subject to the
right of Xxxxxx Capital to terminate the rights and obligations of the
Servicer hereunder at any time and to the other conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be
obligated, among other things, to supervise the servicing of the Serviced
Mortgage Loans on behalf of the Trustee, and shall have the right, under
certain circumstances, to terminate the rights and obligations of the Servicer
under this Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Flow Servicing
Agreement dated as of September 1, 1997, between Xxxxxx Capital and the
Servicer (the "Flow Servicing Agreement") incorporated by reference herein,
shall have the meanings ascribed to such terms in the Trust Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Flow Servicing Agreement, except as otherwise provided herein and on Exhibit A
hereto, and that the provisions of the Flow Servicing Agreement, as so
modified, are and shall be a part of this Agreement to the same extent as if
set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee pursuant to the Trust Agreement, shall have the same rights as the
"Owner" (as defined in the Flow Servicing Agreement) to enforce the
obligations of the Servicer under the Flow Servicing Agreement. The Master
Servicer shall be entitled to terminate the rights and obligations of the
Servicer under this Agreement upon the failure of the Servicer to perform any
of its obligations under this Agreement, as provided in Article IX of the Flow
Servicing Agreement.
In addition, in the event that Xxxxxx Capital transfers the servicing
rights in respect of the Serviced Mortgage Loans to one or more successor
servicers, the rights and obligations of the Servicer under this Agreement
shall terminate, at the sole option of Xxxxxx Capital, without cause, upon
thirty days written notice to the Servicer, and each successor servicer shall
succeed to the rights and obligations of the Servicer under this Agreement as
of such date. Upon such termination the terminated Servicer shall not be
entitled to the Servicing Fee or any portion thereof, or, except as provided
in the Flow Servicing Agreement, to any other amounts in respect of the
Serviced Mortgage Loans.
The Servicer agrees that, notwithstanding anything to the contrary in
the Flow Servicing Agreement, Xxxxxx Capital is the sole owner of the
servicing rights relating to the Serviced Mortgaged Loans, and the Servicer
shall have no right to transfer the servicing thereof.
4. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the
parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at its
address specified below. Each party may designate to the other parties in
writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. 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 which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Flow Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1999-BC1
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: #1350220, SASCO 1999-BC1
10. Errors and Omissions Insurance. The Servicer shall keep in force
during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy or policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-servicer. The Servicer shall be deemed to have complied with this
provision if an affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. The Servicer
shall furnish to the Master Servicer a copy of each such bond and insurance
policy if (i) the Master Servicer so requests and (ii) the Servicer is not an
affiliate of Xxxxxx Brothers Inc. at the time of such request.
11. Annual Audit Report. On or before April 30 of each year,
beginning with April 30, 2000, Servicer shall cause a firm of independent
public accountants (who may also render other services to Servicer), which is
a member of the American Institute of Certified Public Accountants, to furnish
a statement to the Owner, each Directing Holder and Master Servicer, to the
effect that such firm has examined certain documents and records for the
preceding fiscal year (or during the period from the date of commencement of
such servicer's duties hereunder until the end of such preceding fiscal year
in the case of the first such certificate) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that
Servicer's overall servicing operations have been conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
12. Annual Officer's Certificate. On or before April 30 of each year,
beginning with April 30, 2000, the Servicer, at its own expense, will deliver
to the Owner, each Directing Holder and Master Servicer a Servicing Officer's
certificate stating, as to each signer thereof, that (i) a review of the
activities of the Servicer during such preceding fiscal year and of
performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Servicer has fulfilled all its obligations under this Agreement
for such year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the
nature and status thereof including the steps being taken by the Servicer to
remedy such default.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
-----------------------------------
Name:
Title:
AURORA LOAN SERVICES INC.
By:
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Name:
Title:
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. The following is hereby added immediately following the words "incidental
fees and charges" in the definition of "Ancillary Income" in Article I:
", but not including any premium or penalty associated with a prepayment
of principal of a Mortgage Loan."
2. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"Any custodial agreement relating to custody of the Serviced Mortgage
Loans substantially in the form attached as an exhibit to the Trust
Agreement, dated as of January 1, 1999, among The First National Bank of
Chicago, as trustee, Norwest Bank Minnesota, National Association, as
master servicer and SASCO.
3. The definition of "Custodian" in Article I is hereby deleted and replaced
with the following:
"Any custodian appointed under any Custodial Agreement."
4. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
period beginning on the Cut-off Date and ending on February 1, 1999. With
respect to each subsequent Remittance Date, the period commencing on the
second day of the month immediately preceding the month in which such
Remittance Date occurs and ending on the first day of the month in which
such Remittance Date occurs."
5. The definition of "Prepayment Interest Shortfall Amount" in Article I is
hereby amended by deleting the words "in full" after the words "subject
to a Principal Prepayment."
6. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", but only to the
extent that such amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other recoveries in
respect of such Mortgage Loan."
7. The definition of "Qualified Depository" in Article I is hereby deleted
and replaced with the following:
"Any of (i) a depository the accounts of which are insured by the
FDIC and the debt obligations of which are rated AA or better by Fitch
IBCA, Inc. ("Fitch"); (ii) the corporate trust department of any bank the
debt obligations of which are rated at least A-1 or its equivalent by
Fitch; or (iii) the Servicer, unless the Master Servicer is notified by
Fitch that the designation of the Servicer as a Qualified Depository will
result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Certificates."
8. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of any month, following the First
Remittance Date."
9. The definition of "Servicing Advance" in Article I is hereby amended by
adding, immediately after the phrase "but not limited to, the cost of",
the following: "transfer of servicing of Distressed Mortgage Loans to the
Special Servicer pursuant to Section 9.02 hereof, and".
10. The first sentence of the definition of "Servicing Fee" in Article I is
hereby deleted and replaced with the following: "The servicing fee shall
be an amount equal to one-twelfth the product of (a) a rate per annum
equal to 0.50% and (b) the outstanding principal balance of such Mortgage
Loan. 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 3.02 of this Agreement) of such
Monthly Payment collected by the Servicer, or as otherwise provided under
this Agreement."
11. The fourth and fifth paragraphs of Section 3.01 are hereby deleted and
replaced with the following paragraph:
"Consistent with the terms of this Agreement, the Servicer may waive
any late payment charge, assumption fee or other fee that may be
collected in the ordinary course of servicing the Mortgage Loans. The
Servicer shall not make any future advances to any obligor under any
Mortgage Loan, and (unless the Mortgagor is in default with respect to
the Mortgage Loan or such default is, in the judgment of the Servicer,
reasonably foreseeable) the Servicer shall not permit any modification of
any material term of any Mortgage Loan, including any modification that
would change the Mortgage Interest Rate, defer or forgive the payment of
principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final
maturity date on such Mortgage Loan. In the event of any such
modification which permits the deferral of interest or principal payments
on any Mortgage Loan, the Servicer shall, on the Business Day immediately
preceding the Remittance Date in any month in which any such principal or
interest payment has been deferred, make a Monthly Advance in accordance
with Section 4.03, in an amount equal to the difference between (a) such
month's principal and one month's interest at the Remittance Rate on the
unpaid principal balance of such Mortgage Loan and (b) the amount paid by
the Mortgagor. The Servicer shall be entitled to reimbursement for such
advances to the same extent as for all other advances made pursuant to
Section 4.03. Without limiting the generality of the foregoing, the
Servicer shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of itself and the Master Servicer, 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. Upon the
request of the Servicer, the Master Servicer shall execute and deliver to
the Servicer any powers of attorney and other documents, furnished to it
by the Servicer and reasonably satisfactory to the Master Servicer,
necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the
Servicer shall not waive any premium or penalty in connection with a
prepayment of principal of any Mortgage Loan, and shall not consent to
the modification of any Mortgage Note to the extent that such
modification relates to payment of a prepayment premium or penalty."
12. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.,
owner of residential Mortgage Loans, Group No. 1997-ALSI, and various
Mortgagors" in the first paragraph of Section 3.03 are hereby deleted and
replaced with the following: "Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1999-BC1."
13. Section 3.03 is further amended by deleting the word "and" at the end of
clause (viii), replacing the period at the end of clause (ix) with ";
and", and adding the following immediately after clause (ix):
"(x) any principal prepayment penalties received in connection with
the Mortgage Loans."
14. Section 3.04 is amended by deleting the word "and" at the end of clause
(v), replacing the period at the end of clause (vi) with "; and", and
adding the following immediately following clauses (vii) and (viii):
"(vii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 7.03, it being understood that, in the
case of any such reimbursement, the Servicer's right thereto shall be
prior to the rights of the Purchaser;
(viii) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (viii) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other amounts received in respect
of the related REO Property, and such other amounts as may be collected
by the Servicer from the Mortgagor or otherwise relating to the Mortgage
Loan, it being understood that, in the case of any such reimbursement,
the Servicer's right thereto shall be prior to the rights of the Trust
Fund;"
15. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.,
owner of residential Mortgage Loans, Group No. 1997-ALSI, and various
Mortgagors" in the first paragraph of Section 3.05 are hereby deleted and
replaced with the following: "Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1999-BC1."
16. All references in Section 3.11 to the disposition of REO Properties
within a two-year period are hereby deleted and replaced with a
three-year period.
17. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Servicer shall remit by wire transfer
of immediately available funds to the Master Servicer (a) all amounts
deposited in the Custodial Account as of the close of business on the
last day of the related Due Period (net of charges against or withdrawals
from the Custodial Account pursuant to Section 3.04), plus (b) all
amounts, if any, which the Servicer is obligated to distribute pursuant
to Section 7.03, minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds or REO Disposition Proceeds received after the applicable
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 7.03, and 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 in which such Remittance Date
occurs, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts."
18. Section 4.02 is hereby amended by deleting the words "Remittance Date" in
the first line of such Section, and substituting the following: "eleventh
Business Day of each month"
19. The third paragraph of Section 5.01 is hereby deleted.
20. Section 5.02 is hereby deleted.
21. The following paragraphs are hereby added at the end of Section 9.02:
The Servicer shall orally inform the Master Servicer and the Special
Servicer as to which Mortgage Loans have become delinquent for a period
of 91 days or more, without giving effect to any grace period permitted
by the related Mortgage Note (each, a "Distressed Mortgage Loan"). No
Mortgage Loan shall be considered to be delinquent for such purpose by
virtue of the related Mortgagor having made payment to a prior servicer.
Any such Mortgage Loan as to which all past due payments are made prior
to the Notice Date shall not be considered to be a Distressed Mortgage
Loan, and the servicing thereof shall not be transferred as provided
below. On the fourth Business Day of each month (the "Notice Date"), the
Servicer shall send by facsimile a written listing of the Distressed
Mortgage Loans to the Master Servicer, the Trustee and the Custodian, and
shall mail to the Mortgagor of each Mortgage Loan listed in a Transfer
Notice a letter advising each such Mortgagor of the transfer of the
servicing of the related Mortgage Loan to the Special Servicer, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of
1990; provided, however, the content and format of such letter shall have
the prior approval of the Special Servicer. The Servicer shall promptly
provide the Special Servicer with copies of all such notices. The
transfer of servicing with respect to each such Mortgage Loan to the
Special Servicer shall be effected by the Servicer not later than the
fifteenth day following the applicable Notice Date (the "Transfer Date").
By the Business Day immediately following each Notice Date, the Servicer
shall provide the Master Servicer, the Special Servicer, the Trustee and
the Custodian with a certification (the "Transfer Notice") listing the
Distressed Mortgage Loans.
At least five Business Days prior to the Transfer Date, the Servicer
shall deliver, with respect to the Distressed Mortgage Loans listed on
the related Transfer Notice, to the Special Servicer all Servicing Files,
and to the Special Servicer and the Master Servicer a preliminary loan
level tape or other electronic media (a "Report") in form reasonably
acceptable to the Servicer, the Master Servicer and the Special Servicer.
Within two Business Days following such Transfer Date, the Servicer shall
deliver such Report in final form reasonably acceptable to the Master
Servicer and the Special Servicer, and commensurate with generally
acceptable industry standards, detailing the amount of any unreimbursed
Monthly Advances, Servicing Advances and accrued and unpaid Servicing
Fees on a loan level basis. Should the Master Servicer or the Special
Servicer desire a loan level tape or other electronic media containing
information which is not readily extractable from the Servicer's
servicing system, the Servicer shall diligently cooperate to make such
loan level data available to the Master Servicer and Special Servicer. In
addition, at least five Business Days prior to the Transfer Date, the
Servicer shall transfer to the Special Servicer any funds held in an
Escrow Account or Custodial Account relating to the Distressed Mortgage
Loans listed in the related Transfer Notice. Upon the successful
completion of the transfer of servicing for Distressed Mortgage Loans,
the Special Servicer will reimburse the Servicer for any unreimbursed
Monthly Advances, Servicing Advances and accrued and unpaid Servicing
Fees with respect to such Distressed Mortgage Loans which have been
properly documented. The Servicer shall be paid, from the Custodial
Account, a termination fee of $25.00 for each Distressed Mortgage Loan
transferred to the Special Servicer.
In connection with the transfer of any Distressed Mortgage Loan, (i)
the Servicer will be responsible for servicing the Distressed Mortgage
Loan until the effective date of transfer of servicing to the Special
Servicer, but shall have no right or obligation to service such
Distressed Mortgage Loan from and after the effective date of the
transfer of servicing to the Special Servicer, (ii) notwithstanding
clause (i) above, the Servicer shall include the Distressed Mortgage Loan
in its monthly remittance report pursuant to Section 4.02 for the month
in which such transfer is effected and shall be obligated, subject to
Section 7.03, to make the Monthly Advance with respect to such Distressed
Mortgage Loan on the Remittance Date in the month in which such transfer
is effected, in each case, regardless of whether the Remittance Date
occurs before or after the effective date of such transfer, (iii) the
amount of Monthly Advances to be reimbursed to the Servicer by the
Special Servicer hereunder shall include the Monthly Advance described in
clause (ii) above regardless of whether the Servicer makes such Monthly
Advance before or after the effective date of such transfer, (iv) the
Servicer shall, no later than the end of the month in which such transfer
is effected, provide to the Special Servicer loan level information (in
the loan level tape or other electronic media or other agreed-upon form)
regarding the Distressed Mortgage Loan during the month of such transfer
as may be necessary to enable the Special Servicer to provide such
information in its remittance report for the next following month, and
(v) the Servicer shall not be entitled to the Servicing Fee with regard
to any such Distressed Mortgage Loan for the month in which such transfer
occurs."
22. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor servicer (including
the Owner and the Master Servicer) shall be liable for any acts or
omissions of the Servicer or any predecessor servicer. In particular,
neither the Master Servicer nor any successor servicer (including the
Owner and the Master Servicer) shall be liable for any servicing errors
or interruptions resulting from any failure of the Servicer to maintain
computer and other information systems that are year-2000 compliant."
23. The following words are hereby added after the words "Attention:
Xxxx Xxxxx" in Section 10.06(ii):
"with a copy to:
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxxxx"
