EXECUTION COPY
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SERVICING AGREEMENT
between
BANC OF AMERICA FUNDING CORPORATION,
as Depositor,
and
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Servicer,
Dated September 28, 2006
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Mortgage Pass-Through Certificates
Series 2006-5
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.................................................... 1
Section 1.01. Defined Terms.............................................. 1
ARTICLE II ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................ 4
Section 2.01. Servicer to Service Mortgage Loans......................... 4
Section 2.02. Subservicing; Enforcement of the Obligations of Servicers.. 5
Section 2.03. Fidelity Bond; Errors and Omissions Insurance.............. 6
Section 2.04. Access to Certain Documentation............................ 7
Section 2.05. Maintenance of Primary Mortgage Insurance Policy; Claims... 7
Section 2.06. Master Servicer to Act as Servicer......................... 8
Section 2.07. Collection of Mortgage Loan Payments and BANA Custodial
Account................................................. 8
Section 2.08. Collection of Taxes, Assessments and Similar Items; Escrow
Account................................................. 11
Section 2.09. Access to Certain Documentation and Information Regarding
the Mortgage Loans...................................... 12
Section 2.10. Permitted Withdrawals from the BANA Custodial Account...... 12
Section 2.11. Maintenance of Hazard Insurance............................ 13
Section 2.12. Enforcement of Due-On-Sale Clauses; Assumption Agreements.. 14
Section 2.13. Realization Upon Defaulted Mortgage Loans; REO Property.... 15
Section 2.14. Trustee to Cooperate; Release of Mortgage Files............ 17
Section 2.15. Documents, Records and Funds in Possession of the Servicer
to be Held for the Trustee.............................. 18
Section 2.16. Servicing Compensation..................................... 19
Section 2.17. Annual Statement as to Compliance.......................... 19
Section 2.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements; Provision of Additional
Information............................................. 20
Section 2.19. Advances................................................... 21
Section 2.20. Modifications, Waivers, Amendments and Consents............ 21
Section 2.21. Reports to the Securities and Exchange Commission.......... 23
Section 2.22. Lost Instruments Affidavit and Indemnity................... 24
Section 2.23. Buy-Down Account; Application of Buy-Down Funds............ 24
ARTICLE III SERVICER'S CERTIFICATE; REMITTANCES.......................... 25
Section 3.01. Servicer's Certificate..................................... 25
Section 3.02. Remittances................................................ 25
ARTICLE IV THE SERVICER.................................................. 25
Section 4.01. Liabilities of the Servicer................................ 25
Section 4.02. Merger or Consolidation of the Servicer.................... 25
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Section 4.03. Limitation on Liability of the Servicer.................... 26
Section 4.04. Servicer Not to Resign..................................... 26
Section 4.05. Representations, Warranties and Covenants of the Servicer.. 27
Section 4.06. REMIC Related Covenants.................................... 28
ARTICLE V DEFAULT........................................................ 28
Section 5.01. Events of Default.......................................... 28
Section 5.02. Master Servicer to Act; Appointment of Successor........... 30
ARTICLE VI TERMINATION................................................... 31
Section 6.01. Termination upon Purchase by the Master Servicer or
Liquidation of All Mortgage Loans....................... 31
ARTICLE VII MISCELLANEOUS PROVISIONS..................................... 31
Section 7.01. Amendment.................................................. 31
Section 7.02. Governing Law.............................................. 32
Section 7.03. Notices.................................................... 32
Section 7.04. Severability of Provisions................................. 32
Section 7.05. Assignment by the Depositor................................ 32
EXHIBITS
Exhibit A Form of Certification of Establishment of Account.......... A-1
Exhibit B Form of Servicer's Certification........................... B-1
Exhibit C Reserved
Exhibit D Contents of Servicing File................................. D-1
Exhibit E Servicing Criteria to the Assessment of Compliance......... E-1
Schedule I BANA Mortgage Loan Schedule................................ I-1
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SERVICING AGREEMENT
THIS SERVICING AGREEMENT, dated September 28, 2006 (the "Agreement"), is
hereby executed by and between BANC OF AMERICA FUNDING CORPORATION, as depositor
(together with its permitted successors and assigns, the "Depositor"), and BANK
OF AMERICA, NATIONAL ASSOCIATION, as Servicer (together with its permitted
successors and assigns, the "Servicer").
WITNESSETH THAT:
WHEREAS, pursuant to the Mortgage Loan Purchase Agreement, dated September
28, 2006, by and between the Depositor and the Servicer, the Servicer shall
convey the BANA Mortgage Loans on a servicing-retained basis to the Depositor,
which in turn shall convey the BANA Mortgage Loans to the Trustee under a
pooling and servicing agreement dated September 28, 2006 (the "Pooling and
Servicing Agreement"), among U.S. Bank National Association, as trustee (the
"Trustee"), the Depositor and CitiMortgage, Inc., as master servicer (the
"Master Servicer") and Xxxxx Fargo Bank, N.A., as securities administrator (the
"Securities Administrator");
WHEREAS, the Depositor desires that the Servicer service the BANA Mortgage
Loans pursuant to this Agreement, and the Servicer agrees to do so;
WHEREAS, the Depositor and the Servicer acknowledge and agree that the
Depositor will assign all of its rights hereunder to the Trustee, and the
Trustee then shall succeed to all rights of the Depositor under this Agreement;
WHEREAS, the Master Servicer shall be obligated under the Pooling and
Servicing Agreement, among other things, to supervise the servicing of the BANA
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 upon the occurrence and continuance of an Event of
Default as provided herein;
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, the Depositor and the Servicer hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
BANA Custodial Account: The separate Eligible Account or Accounts created
and maintained by BANA pursuant to Section 2.07(b).
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BANA Mortgage Loans: The mortgage loans serviced by BANA and identified as
such on the Mortgage Loan Schedule and which are also identified on the BANA
Mortgage Loan Schedule attached hereto.
BANA Mortgage Loan Schedule: The mortgage loan schedule attached hereto as
Schedule I containing the same fields as are set forth on the Mortgage Loan
Schedule.
Buy-Down Account: The separate Eligible Account or Accounts created and
maintained by the Servicer pursuant to Section 2.23.
Buy-Down Agreement: An agreement governing the application of Buy-Down
Funds with respect to a Buy-Down Mortgage Loan.
Buy-Down Funds: Money advanced by a builder, seller or other interested
party to reduce a Mortgagor's monthly payment during the initial years of a
Buy-Down Mortgage Loan.
Buy-Down Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to
a Buy-Down Agreement, 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
from Buy-Down Funds.
Determination Date: As to any Distribution Date, the 16th day of the month
of the related Distribution Date or, if such 16th day is not a Business Day, the
Business Day immediately preceding such day.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Monthly Advance: The payment required to be made by the Servicer with
respect to any Distribution Date pursuant to Section 2.19, the amount of any
such payment being equal to the aggregate of Monthly Payments (net of the
Servicing Fee) on the BANA Mortgage Loans (including any REO Property) serviced
by the Servicer that were due on the related Due Date and not received as of the
close of business on the related Determination Date, less the aggregate amount
of any such delinquent payments that the Servicer has determined would
constitute a Nonrecoverable Advance if advanced.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 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.
Remittance Date: As to any Distribution Date, by 2:00 p.m. Eastern time on
the 18th calendar day of each month, or if such day is not a Business Day, the
Business Day immediately preceding such day.
Securities Act: The Securities Act of 1933, as amended.
Serviving Criteria: As defined in Section 2.18 of this Agreement.
Servicing Fee: With respect to each BANA Mortgage Loan and Distribution
Date, the amount of the fee payable to the Servicer, which shall, for such
Distribution Date, be equal to
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one-twelfth of the product of the Servicing Fee Rate with respect to such BANA
Mortgage Loan and the Stated Principal Balance of such BANA Mortgage Loan,
subject to reduction as provided in Section 2.16. Such fee shall be payable
monthly, computed on the basis of the same Stated Principal Balance and period
respecting which any related interest payment on a BANA Mortgage Loan is
computed. The Servicer's right to receive the Servicing Fee is limited to, and
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds and other proceeds, to the extent permitted
by Section 2.10) of related Monthly Payments collected by the Servicer, or as
otherwise provided under Section 2.10.
Servicing Fee Rate: With respect to each BANA Mortgage Loan, a per annum
rate as described in the BANA Mortgage Loan Schedule.
Servicing File: The items pertaining to a particular BANA Mortgage Loan
referred to in Exhibit D hereto, and any additional documents required to be
added to the Servicing File pursuant to this Agreement.
Servicing Officer: Any officer of the Servicer involved in, or responsible
for, the administration and servicing of the BANA Mortgage Loans whose name
appears on a list of servicing officers furnished to the Master Servicer by the
Servicer, as such list may from time to time be amended.
Servicing Advance: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) expenses reimbursable to the Servicer
pursuant to Section 2.13 and any enforcement or judicial proceedings, including
foreclosures, (iii) the management and liquidation of any REO Property and (iv)
compliance with the obligations under Section 2.11.
Servicing Transfer Costs: All reasonable costs and expenses incurred by the
Master Servicer in connection with the transfer of servicing from the Servicer,
including, without limitation, any costs or expenses associated with the
complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Master Servicer to
correct any errors or insufficiencies in the servicing data or otherwise to
enable the Master Servicer to service the BANA Mortgage Loans properly and
effectively.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing 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 Servicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer 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 Servicer under
this Agreement or any reconstitution agreement that are identified in Item
1122(d) of Regulation AB.
Subservicing Agreement: Any subservicing agreement (which, in the event the
Subservicer is an affiliate of the Servicer, need not be in writing) between the
Servicer and any
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Subservicer relating to the servicing and/or administration of certain BANA
Mortgage Loans as provided in Section 2.02.
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
the Pooling and Servicing Agreement.
ARTICLE II
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 2.01. Servicer to Service Mortgage Loans.
For and on behalf of the Certificateholders, the Servicer shall service and
administer the BANA Mortgage Loans in accordance with the terms of this
Agreement, Customary Servicing Procedures, applicable law and the terms of the
related Mortgage Notes and Mortgages. Notwithstanding the foregoing sentence,
the servicing responsibilities with respect to eighteen (18) BANA Mortgage Loans
shall be transferred by the Servicer to Xxxxx Fargo Bank, N.A. on or about
November 1, 2006. In connection with such servicing and administration, the
Servicer shall have full power and authority, acting alone and/or through
Subservicers as provided in Section 2.02, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration including, but not limited to, the power and authority,
subject to the terms hereof, (a) to execute and deliver, on behalf of the Master
Servicer, the Certificateholders, the Securities Administrator and the Trustee,
customary consents or waivers and other instruments and documents, (b) to
consent, with respect to the BANA Mortgage Loans, to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (c) to collect any Insurance Proceeds
and other Liquidation Proceeds relating to the BANA Mortgage Loans, and (d) to
effectuate foreclosure or other conversion of the ownership of the Mortgaged
Property securing any BANA Mortgage Loan. The Servicer shall represent and
protect the interests of the Trust in the same manner as it protects its own
interests in mortgage loans in its own portfolio in any claim, proceeding or
litigation regarding a BANA Mortgage Loan and shall not make or permit any
modification, waiver or amendment of any term of any BANA Mortgage Loan, except
as provided pursuant to Section 2.20. Without limiting the generality of the
foregoing, the Servicer, in its own name or in the name of any Subservicer or
the Trustee, is hereby authorized and empowered by the Depositor and the
Trustee, when the Servicer or any Subservicer, as the case may be, believes it
appropriate in its reasonable judgment, to execute and deliver, on behalf of the
Trustee, the Depositor, the Certificateholders or any of them, any and all
instruments and agreements of satisfaction, cancellation, default, assumption,
modification, discharge, partial or full release, and all other comparable
instruments and agreements, with respect to the BANA Mortgage Loans, and with
respect to the related Mortgaged Properties held for the benefit of the
Certificateholders. To the extent that the Servicer is not permitted to execute
and deliver such documents pursuant to the preceding sentence, the Servicer
shall prepare and deliver to the Depositor and/or the Trustee such documents
requiring execution and delivery by any or all of them as are necessary or
appropriate to enable the Servicer to service and administer the BANA Mortgage
Loans. Upon receipt of such documents, the Depositor and/or the Trustee, upon
the direction of the Servicer, shall promptly execute such documents and deliver
them to the Servicer. Alternatively, upon the request of the Servicer, the
Trustee shall execute and deliver to the Servicer any additional powers of
attorney or other documents prepared by the Servicer that
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are reasonably necessary or appropriate to enable the Servicer to carry out its
servicing and administrative duties under this Agreement.
In accordance with the standards of the preceding paragraph, the Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties
relating to the BANA Mortgage Loans, which Servicing Advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 2.08, and further as provided in Section 2.10. The costs
incurred by the Servicer, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties and related insurance premiums shall
not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the Stated Principal Balances of the BANA
Mortgage Loans, notwithstanding that the terms of such BANA Mortgage Loans so
permit.
The relationship of the Servicer (and of any successor to the Servicer as
servicer under this Agreement) to the Trustee, the Master Servicer and the
Securities Administrator under this Agreement is intended by the parties to be
that of an independent contractor and not that of a joint venturer, partner or
agent.
Section 2.02. Subservicing; Enforcement of the Obligations of Servicers.
(a) The Servicer may arrange for the subservicing of any BANA Mortgage Loan
by a Subservicer pursuant to a Subservicing Agreement; provided, however, that
such subservicing arrangement and the terms of the related Subservicing
Agreement must provide for the servicing of such BANA Mortgage Loan in a manner
consistent with the servicing arrangements contemplated hereunder.
Notwithstanding the provisions of any Subservicing Agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer
or otherwise, the Servicer shall remain obligated and liable to the Depositor,
the Master Servicer, the Securities Administrator, the Trustee and the
Certificateholders for the servicing and administration of the BANA Mortgage
Loans in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering those BANA Mortgage Loans. All actions of each
Subservicer performed pursuant to the related Subservicing Agreement shall be
performed as agent of the Servicer with the same force and effect as if
performed directly by the Servicer.
(b) For purposes of this Agreement, the Servicer shall be deemed to have
received any collections, recoveries or payments with respect to the BANA
Mortgage Loans that are received by a Subservicer regardless of whether such
payments are remitted by the Subservicer to the Servicer.
(c) As part of its servicing activities hereunder, the Servicer, for the
benefit of the Trustee, the Securities Administrator, the Master Servicer and
the Certificateholders, shall use its best reasonable efforts to enforce the
obligations of each Subservicer engaged by the Servicer under the related
Subservicing Agreement, to the extent that the non-performance of any such
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obligation would have a material and adverse effect on a BANA Mortgage Loan.
Such enforcement, including, without limitation, the legal prosecution of
claims, termination of Subservicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Servicer, in its good faith business judgment, would
require were it the owner of the related BANA Mortgage Loans. The Servicer shall
pay the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to the
extent, if any, that such recovery exceeds all amounts due in respect of the
related BANA Mortgage Loan or (ii) from a specific recovery of costs, expenses
or attorneys fees against the party against whom such enforcement is directed.
(d) Any Subservicing Agreement entered into by the Servicer shall provide
that it may be assumed or terminated by the Master Servicer, if the Master
Servicer has assumed the duties of the Servicer, or any successor Servicer, at
the Master Servicer's or successor Servicer's option, as applicable, without
cost or obligation to the assuming or terminating party or the Trust Estate,
upon the assumption by such party of the obligations of the Servicer pursuant to
Section 5.02.
(e) Any Subservicing Agreement, and any other transactions or services
relating to the BANA Mortgage Loans involving a Subservicer, shall be deemed to
be between the Servicer and such Subservicer alone, and the Trustee, the
Securities Administrator, the Master Servicer and the Certificateholders shall
not be deemed parties thereto and shall have no claims or rights of action
against, rights, obligations, duties or liabilities to or with respect to the
Subservicer or its officers, directors or employees, except as set forth in
Section 2.01. The Servicer shall be solely liable for all fees owed by it to any
Subservicer, irrespective of whether the Servicer's compensation pursuant to
this Agreement is sufficient to pay such fees.
Section 2.03. Fidelity Bond; Errors and Omissions Insurance.
The Servicer shall maintain, 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 BANA
Mortgage Loans. These policies must insure the Servicer against losses resulting
from dishonest or fraudulent acts committed by the Servicer's personnel, any
employees of outside firms that provide data processing services for the
Servicer, and temporary contract employees or student interns. Such fidelity
bond shall also protect and insure the Servicer against losses in connection
with the release or satisfaction of a BANA Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 2.03 requiring such fidelity bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The minimum coverage under any such bond and insurance
policy shall be at least equal to the corresponding amounts required by FNMA in
the FNMA Servicing Guide or by FHLMC in the FHLMC Sellers' & Servicers' Guide,
as amended or restated from time to time, or in an amount as may be permitted to
the Servicer by express waiver of FNMA or FHLMC.
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Section 2.04. Access to Certain Documentation.
The Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Certificates and the examiners and
supervisory agents of the OTS, the FDIC and such other authorities, access to
the documentation required by applicable regulations of the OTS and the FDIC
with respect to the BANA Mortgage Loans. Such access shall be afforded without
charge, but only upon reasonable and prior written request and during normal
business hours at the offices designated by the Servicer. Nothing in this
Section 2.04 shall limit the obligation of the Servicer to observe any
applicable law and the failure of the Servicer to provide access as provided in
this Section 2.04 as a result of such obligation shall not constitute a breach
of this Section 2.04.
Section 2.05. Maintenance of Primary Mortgage Insurance Policy; Claims
With respect to each BANA Mortgage Loan with a Loan-to-Value Ratio in
excess of 80% or such other Loan-to-Value Ratio as may be required by law, the
Servicer shall, without any cost to the Trust Estate, maintain or cause the
Mortgagor to maintain in full force and effect a Primary Mortgage Insurance
Policy insuring that portion of the BANA Mortgage Loan in excess of a percentage
in conformity with FNMA requirements. The Servicer shall pay or shall cause the
Mortgagor to pay the premium thereon on a timely basis, at least until the
Loan-to-Value Ratio of such BANA Mortgage Loan is reduced to 80% or such other
Loan-to-Value Ratio as may be required by law. If such Primary Mortgage
Insurance Policy is terminated, the Servicer shall obtain from another insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated Primary Mortgage Insurance Policy. If the insurer
shall cease to be an insurer acceptable to FNMA, the Servicer shall notify the
Master Servicer in writing, it being understood that the Servicer shall not have
any responsibility or liability for any failure to recover under the Primary
Mortgage Insurance Policy for such reason. If the Servicer determines that
recoveries under the Primary Mortgage Insurance Policy are jeopardized by the
financial condition of the insurer, the Servicer shall obtain from another
insurer which meets the requirements of this Section 2.05 a replacement
insurance policy. The Servicer shall not take any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
that, but for the actions of the Servicer, would have been covered thereunder.
In connection with any assumption or substitution agreement entered into or to
be entered into pursuant to Section 2.12, the Servicer shall promptly notify the
insurer under the related Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
Primary Mortgage Insurance Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Servicer shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself, the Trust, the Trustee and the
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policy in a timely fashion in accordance with the terms of such Primary Mortgage
Insurance Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any Primary Mortgage Insurance Policy respecting a
defaulted BANA
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Mortgage Loan. Pursuant to Section 2.08(a), any amounts collected by the
Servicer under any Primary Mortgage Insurance Policy shall be deposited in the
Escrow Account, subject to withdrawal pursuant to Section 2.08(b).
The Servicer will comply with all provisions of applicable state and
federal law relating to the cancellation of, or collection of premiums with
respect to, Primary Mortgage Insurance, including, but not limited to, the
provisions of the Homeowners Protection Act of 1998, and all regulations
promulgated thereunder, as amended from time to time.
Section 2.06. Master Servicer to Act as Servicer.
If the Servicer shall for any reason no longer be the Servicer hereunder
(including by reason of an Event of Default), the Master Servicer shall within
90 days of such time, assume, if it so elects, or shall appoint a successor
Servicer to assume, all of the rights and obligations of the Servicer hereunder
arising thereafter (except that the Master Servicer shall not be (a) liable for
losses of the Servicer pursuant to Section 2.11 or any acts or omissions of the
predecessor Servicer hereunder, (b) obligated to make Advances if it is
prohibited from doing so by applicable law or (c) deemed to have made any
representations and warranties of the Servicer hereunder). Any such assumption
shall be subject to Sections 4.02 and 5.02. If the Servicer shall for any reason
no longer be the Servicer (including by reason of any Event of Default), the
Master Servicer or the successor Servicer may elect to succeed to any rights and
obligations of the Servicer under each Subservicing Agreement or may terminate
each Subservicing Agreement. If it has elected to assume the Subservicing
Agreement, the Master Servicer or the successor Servicer shall be deemed to have
assumed all of the Servicer's interest therein and to have replaced the Servicer
as a party to any Subservicing Agreement entered into by the Servicer as
contemplated by Section 2.02 to the same extent as if the Subservicing Agreement
had been assigned to the assuming party except that the Servicer shall not be
relieved of any liability or obligations under any such Subservicing Agreement.
The Servicer that is no longer a Servicer hereunder shall, upon request of
the Master Servicer, but at the expense of such Servicer, deliver to the
assuming party all documents and records relating to each Subservicing Agreement
or substitute servicing agreement and the BANA Mortgage Loans then being
serviced thereunder and an accounting of amounts collected or held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
such substitute Subservicing Agreement to the assuming party. The Master
Servicer shall be entitled to be reimbursed from such Servicer (or the Trust if
such Servicer is unable to fulfill its obligations hereunder) for all Servicing
Transfer Costs.
Section 2.07. Collection of Mortgage Loan Payments and BANA Custodial Account.
(a) Continuously from the date hereof until the principal and interest on
all BANA Mortgage Loans are paid in full, the Servicer will proceed diligently,
in accordance with this Agreement, to collect all payments due under each of the
BANA Mortgage Loans when the same shall become due and payable. Further, the
Servicer will in accordance with all applicable law and Customary Servicing
Procedures ascertain and estimate taxes, assessments, fire and hazard insurance
premiums, mortgage insurance premiums and all other charges with respect to the
BANA Mortgage Loans that, as provided in any Mortgage, will become due and
payable to the
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end that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable. Consistent with the
foregoing, the Servicer may in its discretion (i) waive any late payment charge
or any prepayment penalties or penalty interest in connection with the
prepayment of a BANA Mortgage Loan and (ii) extend the due dates for payments
due on a Mortgage Note for a period not greater than 120 days; provided,
however, that the Servicer cannot extend the maturity of any such BANA Mortgage
Loan past the date on which the final payment is due on the latest maturing BANA
Mortgage Loan as of the Cut-Off Date. In the event of any such arrangement, the
Servicer shall make Monthly Advances on the related BANA Mortgage Loan in
accordance with the provisions of Section 2.19 during the scheduled period in
accordance with the amortization schedule of such BANA Mortgage Loan without
modification thereof by reason of such arrangements. The Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The Servicer shall establish and maintain the BANA Custodial Account.
The Servicer shall deposit or cause to be deposited into the BANA Custodial
Account on a daily basis within one Business Day of receipt, except as otherwise
specifically provided herein, the following payments and collections remitted by
Subservicers or received by it in respect of the BANA Mortgage Loans subsequent
to the Cut-Off Date (other than in respect of principal and interest due on the
BANA Mortgage Loans on or before the Cut-Off Date) and the following amounts
required to be deposited hereunder with respect to the BANA Mortgage Loans it
services:
(i) all payments on account of principal of such BANA Mortgage Loans,
including Principal Prepayments;
(ii) all payments on account of interest on such BANA Mortgage Loans,
net of the Servicing Fee;
(iii) (A) all Insurance Proceeds and Liquidation Proceeds, other than
Insurance Proceeds to be (1) applied to the restoration or repair of the
Mortgaged Property, (2) released to the Mortgagor in accordance with
Customary Servicing Procedures or (3) required to be deposited to the
Escrow Account pursuant to Section 2.08(a), and other than any Excess
Proceeds and (B) any Insurance Proceeds released from the Escrow Account
pursuant to Section 2.08(b)(iv);
(iv) any amount required to be deposited by the Servicer pursuant to
Section 2.07(d) in connection with any losses on Permitted Investments with
respect to the BANA Custodial Account;
(v) any amounts required to be deposited by the Servicer pursuant to
Section 2.13;
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(vi) all Repurchase Prices, all Substitute Adjustment Amounts and all
Reimbursement Amounts to the extent received by the Servicer;
(vii) Monthly Advances made by the Servicer pursuant to Section 2.19
and any Compensating Interest;
(viii) any Buy-Down Funds required to be deposited pursuant to Section
2.23; and
(ix) any other amounts required to be deposited hereunder.
The foregoing requirements for deposits to the BANA Custodial Account by
the Servicer shall be exclusive. If the Servicer shall deposit in the BANA
Custodial Account any amount not required to be deposited, it may at any time
withdraw or direct the institution maintaining the BANA Custodial Account to
withdraw such amount from the BANA Custodial Account, any provision herein to
the contrary notwithstanding. The BANA Custodial Account may contain funds that
belong to one or more trust funds created for mortgage pass-through certificates
of other series and may contain other funds respecting payments on mortgage
loans belonging to the Servicer or serviced by the Servicer on behalf of others;
provided, however, that such commingling of funds shall not be permitted at any
time during which Fitch's senior long-term unsecured debt rating of Bank of
America, National Association is below "A." Notwithstanding such commingling of
funds, the Servicer shall keep records that accurately reflect the funds on
deposit in the BANA Custodial Account that have been identified by it as being
attributable to the BANA Mortgage Loans. The Servicer shall maintain adequate
records with respect to all withdrawals made pursuant to this Section 2.07. All
funds required to be deposited in the BANA Custodial Account shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
2.10.
(c) The institution at which the BANA Custodial Account is maintained may
invest the funds therein as directed in writing by the Servicer in Permitted
Investments, which shall mature not later than the Business Day next preceding
the related Remittance Date (except that if such Permitted Investment is an
obligation of the institution that maintains such account, then such Permitted
Investment shall mature not later than such Remittance Date). All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All BANA Custodial Account Reinvestment Income shall be for
the benefit of the Servicer as part of its Servicing Compensation and shall be
retained by it monthly as provided herein. The amount of any losses realized in
the BANA Custodial Account incurred in respect of any such investments shall
promptly be deposited by the Servicer in the BANA Custodial Account.
(d) The Servicer shall give notice to the Master Servicer of any proposed
change of the location of the BANA Custodial Account maintained by it not later
than 30 days and not more than 45 days prior to any change thereof. The creation
of the BANA Custodial Account shall be evidenced by a certification
substantially in the form of Exhibit A hereto. A copy of such certification
shall be furnished to the Master Servicer.
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Section 2.08. Collection of Taxes, Assessments and Similar Items; Escrow
Account.
(a) To the extent required by the related Mortgage Note and not violative
of current law, the Servicer shall segregate and hold all funds collected and
received pursuant to each BANA Mortgage Loan which constitute Escrow Payments in
trust separate and apart from any of its own funds and general assets and for
such purpose shall establish and maintain one or more escrow accounts
(collectively, the "Escrow Account"), titled "Bank of America, National
Association, in trust for registered holders of Banc of America Funding
Corporation Mortgage Pass-Through Certificates, Series 2006-5 and various
Mortgagors." The Escrow Account shall be established with a commercial bank, a
savings bank or a savings and loan association that meets the guidelines set
forth by FNMA or FHLMC as an eligible institution for escrow accounts and which
is a member of the Automated Clearing House. In any case, the Escrow Account
shall be insured by the FDIC to the fullest extent permitted by law. The
Servicer shall deposit in the appropriate Escrow Account on a daily basis, and
retain therein: (i) all Escrow Payments collected on account of the BANA
Mortgage Loans, (ii) all amounts representing proceeds of any hazard insurance
policy which are to be applied to the restoration or repair of any related
Mortgaged Property; and (iii) all amounts representing proceeds of any Primary
Mortgage Insurance Policy. Nothing herein shall require the Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
(b) Withdrawals of amounts so collected from the Escrow Account may be made
by the Servicer only (i) to effect timely payment of taxes, assessments,
mortgage insurance premiums, fire and hazard insurance premiums, condominium or
PUD association dues, or comparable items constituting Escrow Payments for the
related Mortgage, (ii) to reimburse the Servicer out of related Escrow Payments
made with respect to a BANA Mortgage Loan for any Servicing Advance made by the
Servicer pursuant to Section 2.08(c) with respect to such BANA Mortgage Loan,
(iii) to refund to any Mortgagor any sums determined to be overages, (iv) for
transfer to the BANA Custodial Account upon default of a Mortgagor or in
accordance with the terms of the related BANA Mortgage Loan and if permitted by
applicable law, (v) for application to restore or repair the Mortgaged Property,
(vi) to pay to the Mortgagor, to the extent required by law, any interest paid
on the funds deposited in the Escrow Account, (vii) to pay to itself any
interest earned on funds deposited in the Escrow Account (and not required to be
paid to the Mortgagor), (viii) to the extent permitted under the terms of the
related Mortgage Note and applicable law, to pay late fees with respect to any
Monthly Payment which is received after the applicable grace period, (ix) to
withdraw suspense payments that are deposited into the Escrow Account, (x) to
withdraw any amounts inadvertently deposited in the Escrow Account; or (xi) to
clear and terminate the Escrow Account upon the termination of this Agreement in
accordance with Section 6.01. Any Escrow Account shall not be a part of the
Trust Estate.
(c) With respect to each BANA Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status of
Primary Mortgage Insurance Policy premiums and fire and hazard insurance
coverage. The Servicer 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 and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account, if any, which shall have been
estimated and accumulated by the Servicer in
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amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. To the extent that a Mortgage does not provide for Escrow Payments,
the Servicer shall determine that any such payments are made by the Mortgagor.
The Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payments of all such bills irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments. The Servicer shall advance any such payments that are not
timely paid, but the Servicer shall be required so to advance only to the extent
that such Servicing Advances, in the good faith judgment of the Servicer, will
be recoverable by the Servicer out of Insurance Proceeds, Liquidation Proceeds
or otherwise.
Section 2.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
The Servicer shall afford the Master Servicer, the Securities Administrator
and the Trustee reasonable access to all records and documentation regarding the
BANA Mortgage Loans serviced by it and all accounts, insurance information and
other matters relating to this Agreement, such access being afforded without
charge, but only upon reasonable request and during normal business hours at the
office designated by the Servicer.
Section 2.10. Permitted Withdrawals from the BANA Custodial Account.
The Servicer may from time to time make withdrawals from the BANA Custodial
Account, for the following purposes:
(i) to pay itself (to the extent not previously retained), the
Servicing Compensation to which it is entitled pursuant to Section 2.16;
(ii) to reimburse itself for unreimbursed Advances made by it, such
right of reimbursement pursuant to this clause (ii) being limited to
amounts received on the BANA Mortgage Loans in the same Loan Group as the
BANA Mortgage Loan(s) in respect of which any such Advance was made;
(iii) to reimburse itself for any Nonrecoverable Advance previously
made;
(iv) to reimburse itself for Insured Expenses from the Insurance
Proceeds;
(v) to pay to the purchaser, with respect to each BANA Mortgage Loan
or REO Property that has been purchased pursuant to the Pooling and
Servicing Agreement, all amounts received thereon after the date of such
purchase;
(vi) to reimburse itself or the Depositor for expenses incurred by any
of them and reimbursable pursuant to Section 4.03;
(vii) to withdraw any amount deposited in the BANA Custodial Account
and not required to be deposited therein;
(viii) on or prior to the Remittance Date, to withdraw an amount equal
to the portion of the Pool Distribution Amount relating to the BANA
Mortgage Loans and any
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other amounts due to the Master Servicer under this Agreement for such
Distribution Date, to the extent on deposit, and remit such amount in
immediately available funds to the Master Servicer for deposit in the
Master Servicer Custodial Account;
(ix) on or prior to the Remittance Date, to withdraw all amounts
deposited into the BANA Custodial Account pursuant to Section 2.07(b)(viii)
for such Distribution Date and remit such amounts in immediately available
funds to the Master Servicer for deposit into the Master Servicer Custodial
Account; and
(x) to clear and terminate the BANA Custodial Account upon termination
of this Agreement pursuant to Section 6.01.
The Servicer shall keep and maintain separate accounting, on a BANA
Mortgage Loan by BANA Mortgage Loan basis, for the purpose of justifying any
withdrawal from the BANA Custodial Account pursuant to clauses (i), (ii), (iv)
and (v) above. Prior to making any withdrawal from the BANA Custodial Account
pursuant to clause (iii) above, the Servicer shall deliver to the Master
Servicer an Officer's Certificate of a Servicing Officer indicating the amount
of any previous Advance determined by the Servicer to be a Nonrecoverable
Advance and identifying the related BANA Mortgage Loan(s) and their respective
portions of such Nonrecoverable Advance.
In connection with any failure by the Servicer to make any remittance
required to be made by it to the Master Servicer Custodial Account on the day
and by the time such remittance is required to be made under this Agreement
(without giving effect to any grace or cure period), the Servicer shall pay the
Master Servicer for the account of the Master Servicer interest at the rate
published in The Wall Street Journal as the "Prime Rate" on any amount not
timely remitted from and including the day such remittance was required to be
made to, but not including, the day on which such remittance was actually made.
Section 2.11. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each BANA Mortgage Loan fire
and hazard insurance with extended coverage customary in the area where the
Mortgaged Property is located in an amount which is at least equal to the lesser
of (a) the full insurable value of the Mortgaged Property or (b) the greater of
(i) the outstanding principal balance owing on the BANA Mortgage Loan and (ii)
an amount such that the proceeds of such insurance shall be sufficient to avoid
the application to the Mortgagor or loss payee of any coinsurance clause under
the policy. If the Mortgaged Property is in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) the Servicer will
cause to be maintained a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration and the requirements
of FNMA or FHLMC. The Servicer shall also maintain on REO Property serviced by
it, fire and hazard insurance with extended coverage in an 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, flood
insurance in an amount required above. Any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in an Escrow Account
and applied to the restoration or repair of the property subject to the related
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Mortgage or property acquired in liquidation of the BANA Mortgage Loan, or to be
released to the Mortgagor in accordance with Customary Servicing Procedures)
shall be deposited in the BANA Custodial Account, subject to withdrawal pursuant
to Section 2.10. It is understood and agreed that no earthquake or other
additional insurance need be required by the Servicer of any Mortgagor or
maintained on REO Property, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to the Servicer, and shall provide
for at least 30 days prior written notice of any cancellation, reduction in
amount or material change in coverage to the Servicer.
The hazard insurance policies for each BANA Mortgage Loan secured by a unit
in a condominium development or planned unit development shall be maintained
with respect to such BANA Mortgage Loan and the related development in a manner
which is consistent with FNMA requirements.
Notwithstanding the foregoing, the Servicer may maintain a blanket policy
insuring against hazard losses on all of the Mortgaged Properties relating to
the BANA Mortgage Loans in lieu of maintaining the required hazard insurance
policies for each BANA Mortgage Loan and may maintain a blanket policy insuring
against special flood hazards in lieu of maintaining any required flood
insurance. Any such blanket policies shall (A) be consistent with prudent
industry standards, (B) name the Servicer as loss payee, (C) provide coverage in
an amount equal to the aggregate unpaid principal balance on the related BANA
Mortgage Loans without co-insurance, and (D) otherwise comply with the
requirements of this Section 2.11. Any such blanket policy may contain a
deductible clause; provided that if any Mortgaged Property is not covered by a
separate policy otherwise complying with this Section 2.11 and a loss occurs
with respect to such Mortgaged Property which loss would have been covered by
such a policy, the Servicer shall deposit in the BANA Custodial Account the
difference, if any, between the amount that would have been payable under a
separate policy complying with this Section 2.11 and the amount paid under such
blanket policy.
Section 2.12. Enforcement of Due-On-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 2.12, when any Mortgaged
Property subject to a Mortgage has been conveyed by the Mortgagor, the Servicer
shall use reasonable efforts, to the extent that it has actual knowledge of such
conveyance, to enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Servicer is not required to exercise such
rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise required under such Mortgage Note or Mortgage as a condition to such
transfer. If (i) the Servicer is prohibited by law from enforcing any such
due-on-sale clause, (ii) coverage under any Required Insurance Policy would be
adversely affected, (iii) the Mortgage Note does not include a due-on-sale
clause or (iv) nonenforcement is otherwise permitted hereunder, the Servicer is
authorized, subject to Section 2.12(b), to take or enter into an assumption and
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modification agreement from or with the Person to whom such Mortgaged Property
has been or is about to be conveyed, pursuant to which such Person becomes
liable under the Mortgage Note and, unless prohibited by applicable state law,
the Mortgagor remains liable thereon; provided that the BANA Mortgage Loan shall
continue to be covered (if so covered before the Servicer enters such agreement)
by the applicable Required Insurance Policies. The Servicer, subject to Section
2.12(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Mortgagor and becomes liable under
the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be
deemed to be in default under this Section 2.12 by reason of any transfer or
assumption which it reasonably believes it is restricted by law from preventing,
for any reason whatsoever.
(b) Subject to the Servicer's duty to enforce any due-on-sale clause to the
extent set forth in Section 2.12(a), in any case in which a Mortgaged Property
has been conveyed to a Person by a Mortgagor, and such Person is to enter into
an assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage or if an instrument of release is required releasing the
Mortgagor from liability on the BANA Mortgage Loan, the Servicer shall prepare
and execute the assumption agreement with the Person to whom the Mortgaged
Property is to be conveyed and such modification agreement or supplement to the
Mortgage Note or Mortgage or other instruments as are reasonable or necessary to
carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with
any applicable laws regarding assumptions or the transfer of the Mortgaged
Property to such Person. In connection with any such assumption, no material
term of the Mortgage Note may be changed. In addition, the substitute Mortgagor
and the Mortgaged Property must be acceptable to the Servicer in accordance with
its underwriting standards as then in effect. Together with each such
substitution, assumption or other agreement or instrument, the Servicer shall
execute an Officer's Certificate signed by a Servicing Officer stating that the
requirements of this subsection have been met. The Servicer shall notify the
Master Servicer and the Trustee that any such substitution or assumption
agreement has been completed by forwarding to the Master Servicer, who shall
forward to the Trustee (or at the direction of the Trustee, the Custodian) a
copy of the Officer's Certificate described in the previous sentence and the
original of such substitution or assumption agreement, which in the case of the
original shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. Any fee collected
by the Servicer for entering into an assumption or substitution of liability
agreement may be retained by it as additional servicing compensation.
Section 2.13. Realization Upon Defaulted Mortgage Loans; REO Property.
The Servicer shall use reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
BANA Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Servicer shall follow
Customary Servicing Procedures and shall meet the requirements of the insurer
under any Required Insurance Policy. Notwithstanding the foregoing, a Servicer
shall not be required to expend its own funds in connection with any foreclosure
or towards the
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restoration of any Mortgaged Property unless it shall determine (i) that such
restoration and/or foreclosure will increase the proceeds of liquidation of the
BANA Mortgage Loan after reimbursement to itself of such expenses and (ii) that
such expenses will be recoverable to it through proceeds of the liquidation of
the BANA Mortgage Loan (respecting which it shall have priority for purposes of
withdrawals from the BANA Custodial Account). Any such expenditures shall
constitute Servicing Advances for purposes of this Agreement.
With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trust for the benefit of the Certificateholders, or its
nominee, on behalf of the Certificateholders. The name of the Trust shall be
placed on the title to such REO Property. The Servicer shall ensure that the
title to such REO Property references this Agreement. Pursuant to its efforts to
sell such REO Property, the Servicer shall either itself or through an agent
selected by it manage, conserve, protect and operate such 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. Incident to its conservation and
protection of the interests of the Certificateholders, the Servicer may rent the
same, or any part thereof, as it deems to be in the best interest of the
Certificateholders for the period prior to the sale of such REO Property. The
Servicer shall prepare for and deliver to the Master Servicer a statement with
respect to each REO Property serviced by it that has been rented, if any,
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions; provided, however, that the Servicer shall
have no duty to rent any REO Property on behalf of the Trust. The net monthly
rental income, if any, from such REO Property shall be deposited in the BANA
Custodial Account no later than the close of business on each Determination
Date. The Servicer shall perform, with respect to the BANA Mortgage Loans, the
tax reporting and withholding required by Sections 1445 and 6050J of the Code
with respect to foreclosures and abandonments, the tax reporting required by
Section 6050H of the Code with respect to the receipt of mortgage interest from
individuals and, if required by Section 6050P of the Code with respect to the
cancellation of indebtedness by certain financial entities, by preparing such
tax and information returns as may be required, in the form required.
If the Trust acquires any Mortgaged Property as described above or
otherwise in connection with a default or a default which is reasonably
foreseeable on a BANA Mortgage Loan, the Servicer shall dispose of such
Mortgaged Property prior to the end of the third calendar year following the
year of its acquisition by the Trust (such period, the "REO Disposition Period")
unless (A) the Master Servicer, the Securities Administrator, on behalf of the
Trustee, and the Trustee shall have been supplied by the Servicer with an
Opinion of Counsel to the effect that the holding by the Trust of such Mortgaged
Property subsequent to the REO Disposition Period will not result in the
imposition of taxes on "prohibited transactions" (as defined in Section 860F of
the Code) on any REMIC or cause any REMIC Estate to fail to qualify as a
separate REMIC at any time that any Certificates are outstanding, or (B) the
Master Servicer, on behalf of the Trustee (at the Servicer's expense), or the
Servicer shall have applied for, prior to the expiration of the REO Disposition
Period, an extension of the REO Disposition Period in the manner contemplated by
Section 856(e)(3) of the Code. If such an Opinion of Counsel is provided or such
an exemption is obtained, the Trust may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel) for the
applicable
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period. Notwithstanding any other provision of this Agreement, no Mortgaged
Property acquired by the Trust shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
Trust in such a manner or pursuant to any terms that would (i) cause such
Mortgaged Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or (ii) subject any REMIC to the
imposition of any federal, state or local income taxes on the income earned from
such Mortgaged Property under Section 860G(c) of the Code or otherwise, unless
the Servicer has agreed to indemnify and hold harmless the Trust with respect to
the imposition of any such taxes. The Servicer shall identify to the Master
Servicer and the Securities Administrator any Mortgaged Property relating to a
BANA Mortgage Loan held by the Trust for 30 months for which no plans to dispose
of such Mortgaged Property by the Servicer have been made. After delivery of
such identification, the Servicer shall proceed to dispose of any such Mortgaged
Property by holding a commercially reasonable auction for such property.
The income earned from the management of any REO Properties, net of
reimbursement to the Servicer for expenses incurred (including any property or
other taxes) in connection with such management and net of unreimbursed
Servicing Fees, Monthly Advances and Servicing Advances, shall be applied to the
payment of principal of and interest on the related defaulted BANA Mortgage
Loans (solely for the purposes of allocating principal and interest, interest
shall be treated as accruing as though such BANA Mortgage Loans were still
current) and all such income shall be deemed, for all purposes in this
Agreement, to be payments on account of principal and interest on the related
Mortgage Notes and shall be deposited into the BANA Custodial Account. To the
extent the net income received during any calendar month is in excess of the
amount attributable to amortizing principal and accrued interest at the related
Mortgage Interest Rate on the related BANA Mortgage Loan for such calendar
month, such excess shall be considered to be a partial prepayment of principal
of the related BANA Mortgage Loan.
The proceeds from any liquidation of a BANA Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the Servicer for any related unreimbursed Servicing Advances
and Servicing Fees; second, to reimburse the Servicer for any unreimbursed
Monthly Advances and to reimburse the BANA Custodial Account for any
Nonrecoverable Advances (or portions thereof) that were previously withdrawn by
the Servicer pursuant to Section 2.10(iii) that related to such BANA Mortgage
Loan; third, to accrued and unpaid interest (to the extent no Monthly Advance
has been made for such amount or any such Monthly Advance has been reimbursed)
on the BANA Mortgage Loan or related REO Property, at the Mortgage Rate to the
Due Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the BANA Mortgage Loan.
Excess Proceeds, if any, from the liquidation of a Liquidated Mortgage Loan will
be retained by the Servicer as additional servicing compensation pursuant to
Section 2.16.
Section 2.14. Trustee to Cooperate; Release of Mortgage Files.
Upon the payment in full of any BANA Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer or the Master Servicer will
immediately notify the Trustee (or, at the direction of the Trustee, the
Custodian) by delivering, or causing to be delivered, two copies (one of which
will
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be returned to the Servicer with the Mortgage File of a Request for Release
(which may be delivered in an electronic format acceptable to the Trustee and
the Servicer or the Master Servicer). Upon receipt of such request, the Trustee
or the Custodian, as applicable, shall within seven Business Days release the
related Mortgage File to the Servicer. The Trustee shall deliver to the Servicer
the Mortgage Note with written evidence of cancellation thereon. If the Mortgage
has been recorded in the name of MERS or its designee, the Servicer shall take
all necessary action to reflect the release of the Mortgage on the records of
MERS. Expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the related Mortgagor. From time to
time and as shall be appropriate for the servicing or foreclosure of any BANA
Mortgage Loan, including for such purpose collection under any policy of flood
insurance, any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Trustee or the
Custodian, as applicable, shall, upon delivery to the Trustee (or, at the
direction of the Trustee, the Custodian) of a Request for Release signed by a
Servicing Officer, release the Mortgage File within seven Business Days to the
Servicer. Subject to the further limitations set forth below, the Servicer shall
cause the Mortgage File so released to be returned to the Trustee or the
Custodian, as applicable, when the need therefor by the Servicer no longer
exists, unless the BANA Mortgage Loan is liquidated and the proceeds thereof are
deposited in the BANA Custodial Account, in which case the Servicer shall
deliver to the Trustee or the Custodian, as applicable, a Request for Release,
signed by a Servicing Officer.
Upon prepayment in full of any BANA Mortgage Loan or the receipt of notice
that funds for such purpose have been placed in escrow, the Servicer shall give
an instrument of satisfaction (or Assignment of Mortgage without recourse)
regarding the Mortgaged Property relating to such BANA Mortgage Loan, which
instrument of satisfaction or Assignment of Mortgage, as the case may be, shall
be delivered to the Person entitled thereto against receipt of the prepayment in
full. If the Mortgage is registered in the name of MERS or its designee, the
Servicer shall take all necessary action to reflect the release on the records
of MERS. In lieu of executing such satisfaction or Assignment of Mortgage, or if
another document is required to be executed by the Trustee, the Servicer may
deliver or cause to be delivered to the Trustee, for signature, as appropriate,
any court pleadings, requests for trustee's sale or other documents necessary to
effectuate such foreclosure or any legal action brought to obtain judgment
against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
deficiency judgment or to enforce any other remedies or rights provided by the
Mortgage Note or the Mortgage or otherwise available at law or in equity.
Section 2.15. Documents, Records and Funds in Possession of the Servicer to be
Held for the Trustee.
The Servicer shall transmit to the Trustee or, at the direction of the
Trustee, the Custodian, as required by this Agreement all documents and
instruments in respect of a BANA Mortgage Loan serviced by it coming into the
possession of the Servicer from time to time and shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any
BANA Mortgage Loan. The documents constituting the Servicing File shall be held
by the Servicer as custodian and bailee for the Trustee. All Mortgage Files and
funds collected or held by, or under
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the control of, the Servicer in respect of any BANA Mortgage Loans, whether from
the collection of principal and interest payments or from Liquidation Proceeds,
including but not limited to, any funds on deposit in the BANA Custodial
Account, shall be held by the Servicer for and on behalf of the Trustee and
shall be and remain the sole and exclusive property of the Trustee, subject to
the applicable provisions of this Agreement. The Servicer also agrees that it
shall not knowingly create, incur or subject any Mortgage File or any funds that
are deposited in the BANA Custodial Account, Master Servicer Custodial Account
or any Escrow Account, or any funds that otherwise are or may become due or
payable to the Trustee for the benefit of the Certificateholders, to any claim,
lien, security interest, judgment, levy, writ of attachment or other encumbrance
created by the Servicer, or assert by legal action or otherwise any claim or
right of setoff against any Mortgage File or any funds collected on, or in
connection with, a BANA Mortgage Loan, except, however, that the Servicer shall
be entitled to set off against and deduct from any such funds any amounts that
are properly due and payable to the Servicer under this Agreement.
Section 2.16. Servicing Compensation.
The Servicer shall be entitled out of each payment of interest on a BANA
Mortgage Loan (or portion thereof) included in the Trust Estate to retain or
withdraw from the BANA Custodial Account an amount equal to the Servicing Fee
for such Distribution Date.
Additional servicing compensation in the form of Excess Proceeds,
prepayment penalties, assumption fees, late payment charges and all income and
gain net of any losses realized from Permitted Investments and all other
customary and ancillary income and fees shall be retained by the related
Servicer to the extent not required to be deposited in the related BANA
Custodial Account pursuant to Section 2.07(b). The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided in this Agreement.
Notwithstanding the foregoing, with respect to the payment of the Servicing
Fee on any Distribution Date, the aggregate Servicing Fee for the Servicer for
such Distribution Date shall be reduced (but not below zero) by an amount equal
to the lesser of (a) the Prepayment Interest Shortfall for such Distribution
Date relating to the BANA Mortgage Loans serviced by such Servicer and (b)
one-twelfth of 0.25% of the aggregate Stated Principal Balance of such BANA
Mortgage Loans for such Distribution Date (any such reduction, "Compensating
Interest").
Section 2.17. Annual Statement as to Compliance.
The Servicer shall deliver to the Master Servicer (and the Master Servicer
will forward to the Trustee and each Rating Agency), no later than March 5
following the end of each calendar year commencing with March 2007, an Officer's
Certificate in the form required by Item 1123 of Regulation AB, to the effect
that (i) an authorized officer of the Servicer has reviewed (or a review has
been made under his or her supervision of) the Servicer's activities under this
Agreement during the prior calendar year and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement in all material respects throughout such year, or, if there
has been a default in the fulfillment of any such
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obligation in any material respect, specifying each such default known to such
officer and the nature and status thereof.
Section 2.18. Annual Independent Public Accountants' Servicing Statement;
Financial Statements; Provision of Additional Information.
On or before March 5 of each calendar year, commencing in 2007, the
Servicer shall:
(a) deliver to the Master Servicer and the Depositor a report (in form and
substance reasonably satisfactory to the Master Servicer and the Depositor)
regarding the Servicer'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 Master Servicer and the Depositor and signed by an
authorized officer of the Servicer, and shall address each of the "Applicable
Servicing Criteria" specified on Exhibit E hereto;
(b) Not later than March 5th of each calendar year, following the end of
each calendar year commencing with March 2007, the Servicer, at its expense,
shall cause a registered public accounting firm which is a member of the
institute of certified public accountants to furnish to the Master Servicer a
report by such accounting firm that attests to, and reports on, the assessment
made by the Servicer pursuant to this Section 2.18, as required by Rules 13a-18
and 15d-18 under the Exchange Act, and Item 1122(b) of Regulation AB. Such
attestation shall be in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act;
(c) cause each Subservicer, and each Subcontractor determined by the
Servicer pursuant to Section 2.02 to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB and deliver to the
Master Servicer and the Depositor an assessment of compliance and accountants'
attestation as and when provided in paragraphs (a) and (b) of this Section; and
(d) with respect to any year in which a certification under the
Xxxxxxxx-Xxxxx Act of 2002, as amended, is required to be given with respect to
the Trust Fund, deliver, or cause each Subservicer and Subcontractor described
in Section 2.18(c) to provide, to the Depositor, the Master Servicer 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, signed by the appropriate officer of the Servicer, in the form
attached hereto as Exhibit B. In addition, the Servicer shall indemnify and hold
harmless the Master Servicer, and its officers, directors and Affiliates from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any inaccuracy in the certification provided by it
pursuant to Section 2.18(c), any breach of its obligations under Section 2.17
and Section 2.18 or its negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the Master Servicer and its officers, directors
and affiliates, then the Servicer agrees that it shall contribute to the amount
paid or payable by the Master Servicer, its officers, directors
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or affiliates as a result of the losses, claims, damages or liabilities of the
Master Servicer, its officers, directors or affiliates in such proportion as is
appropriate to reflect the relative fault of the Master Servicer and its
officers, directors and affiliates on the one hand and such Servicer on the
other in connection with a breach of its obligations under Section 2.17 or
Section 2.18 or its negligence, bad faith or willful misconduct in connection
therewith. The obligations set forth in paragraphs (c) and (d) shall only apply
with respect to periods for which reports on Form 10-K will be filed for the
Trust Fund.
Section 2.19. Advances.
The Servicer shall determine on or before each Determination Date whether
it is required to make a Monthly Advance pursuant to the definition thereof. If
the Servicer determines it is required to make a Monthly Advance, it shall, on
or before the Remittance Date, either (a) deposit into the BANA Custodial
Account an amount equal to the Advance and/or (b) make an appropriate entry in
its records relating to the BANA Custodial Account that any portion of the
Amount Held for Future Distribution in the BANA Custodial Account has been used
by the Servicer in discharge of its obligation to make any such Monthly Advance.
Any funds so applied shall be replaced by the Servicer by deposit in the BANA
Custodial Account no later than the close of business on the Business Day
preceding the next Remittance Date. The Servicer shall be entitled to be
reimbursed from the BANA Custodial Account for all Advances of its own funds
made pursuant to this Section 2.19 as provided in Section 2.10. The obligation
to make Monthly Advances with respect to any BANA Mortgage Loan shall continue
until the ultimate disposition of the REO Property or Mortgaged Property
relating to such BANA Mortgage Loan. The Servicer shall inform the Master
Servicer and the Securities Administrator of the amount of the Monthly Advance
to be made by it no later than the related Remittance Date.
The Servicer shall deliver to the Master Servicer and the Securities
Administrator on the Determination Date an Officer's Certificate of a Servicing
Officer indicating the amount of any proposed Monthly Advance determined by the
Servicer to be a Nonrecoverable Advance. Notwithstanding anything to the
contrary, the Servicer shall not be required to make any Monthly Advance or
Servicing Advance that would be a Nonrecoverable Advance.
Section 2.20. Modifications, Waivers, Amendments and Consents.
(a) Subject to this Section 2.20, the Servicer may agree to any
modification, waiver, forbearance, or amendment of any term of any BANA Mortgage
Loan without the consent of the Master Servicer, the Securities Administrator,
the Trustee or any Certificateholder. All modifications, waivers, forbearances
or amendments of any BANA Mortgage Loan shall be in writing and shall be
consistent with Customary Servicing Procedures.
(b) The Servicer shall not agree to enter into, and shall not enter into,
any modification, waiver (other than a waiver referred to in Section 2.12, which
waiver, if any, shall be governed by Section 2.12), forbearance or amendment of
any term of any BANA Mortgage Loan if such modification, waiver, forbearance, or
amendment would:
(i) affect the amount or timing of any related payment of principal,
interest or other amount payable thereunder;
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(ii) in the Servicer's judgment, materially impair the security for
such BANA Mortgage Loan or reduce the likelihood of timely payment of
amounts due thereon; or
(iii) otherwise constitute a "significant modification" within the
meaning of Treasury Regulations Section 1.860G-2(b);
unless, in either case, (A) such BANA Mortgage Loan is 90 days or more past due
or (B) the Servicer delivers to the Master Servicer and the Securities
Administrator an Opinion of Counsel to the effect that such modification,
waiver, forbearance or amendment would not affect the REMIC status of any REMIC
and, in either case, such modification, waiver, forbearance or amendment is
reasonably likely to produce a greater recovery with respect to such BANA
Mortgage Loan than would liquidation. Notwithstanding the foregoing, no Opinion
of Counsel need be delivered if the purpose of the modification is to reduce the
Monthly Payment on a Mortgage Loan as a result of a partial Principal Prepayment
provided that the Mortgage Loan is fully amortized by its original maturity
date. Subject to Customary Servicing Procedures, the Servicer may permit a
forbearance for a BANA Mortgage Loan which in the Servicer's judgment is subject
to imminent default.
(c) Any payment of interest, which is deferred pursuant to any
modification, waiver, forbearance or amendment permitted hereunder, shall not,
for purposes hereof, including, without limitation, calculating monthly
distributions to Certificateholders, be added to the unpaid principal balance of
the related BANA Mortgage Loan, notwithstanding that the terms of such BANA
Mortgage Loan or such modification, waiver or amendment so permit.
(d) The Servicer may, as a condition to granting any request by a Mortgagor
for consent, modification, waiver, forbearance or amendment, the granting of
which is within the Servicer's discretion pursuant to the BANA Mortgage Loan and
is permitted by the terms of this Agreement, require that such Mortgagor pay to
the Servicer, as additional servicing compensation, a reasonable or customary
fee for the additional services performed in connection with such request,
together with any related costs and expenses incurred by it, which amount shall
be retained by the Servicer as additional servicing compensation.
(e) The Servicer shall notify the Master Servicer, in writing, of any
modification, waiver, forbearance or amendment of any term of any BANA Mortgage
Loan and the date thereof, and shall deliver to the Trustee (or, at the
direction of the Trustee, the Custodian) for deposit in the related Mortgage
File, an original counterpart of the agreement relating to such modification,
waiver, forbearance or amendment, promptly (and in any event within ten Business
Days) following the execution thereof; provided, however, that if any such
modification, waiver, forbearance or amendment is required by applicable law to
be recorded, the Servicer (i) shall deliver to the Trustee (or, at the direction
of the Trustee, the Custodian) a copy thereof and (ii) shall deliver to the
Trustee (or, at the direction of the Trustee, the Custodian) such document, with
evidence of notification upon receipt thereof from the public recording office.
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Section 2.21. Reports to the Securities and Exchange Commission.
(a) The Servicer shall reasonably cooperate with the Depositor and the
Master Servicer in connection with the Trust's satisfying its reporting
requirements under the Exchange Act.
(b) The Servicer hereby agrees to reasonably cooperate to enable the Trust
to fully comply with all Securities and Exchange Commission ("SEC") disclosure
and reporting requirements in effect from time to time with respect to the Trust
and any securities representing ownership interests in or backed by assets of
the Trust, including without limitation, Regulation AB.
(c) The Servicer hereby acknowledges and agrees that the Depositor, the
Master Servicer and the Securities Administrator are relying on its performance
of its obligations under Sections 2.17 and 2.18 in order to perform their
respective obligations under Section 3.22 of the Pooling and Servicing
Agreement.
(d) The Servicer shall notify the Master Servicer of any proceedings of the
type described in Item 1117 of Regulation AB, together with a description
thereof, within two Business Days of the Servicer's knowledge thereof. In
addition, the Servicer shall notify the Master Servicer of any affiliations or
relationships that develop following the Closing Date between the Servicer and
any of parties listed in Item 1119 of Regulation AB, together with a description
thereof, within two Business Days of the Servicer's knowledge thereof.
(e) In addition to such information as the Servicer is obligated to provide
pursuant to other provisions of this Agreement, not later than ten days prior to
the deadline for the filing of any distribution report on Form 10-D in respect
of any securitization transaction that includes any of the BANA Mortgage Loans
serviced by the Servicer or any Subservicer, the Servicer or such Subservicer,
as applicable, shall, to the extent the Servicer or such Subservicer has
knowledge, provide to the party responsible for filing such report (including,
if applicable, the Master Servicer) notice of the occurrence of any of the
following events along with all information, data, and materials related thereto
as may be required to be included in the related distribution report on Form
10-D (as specified in the provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers of pool asset
terms, fees, penalties or payments during the distribution period or that
have cumulatively become material over time (Item 1121(a)(11) of Regulation
AB);
(ii) material breaches of pool asset representations or warranties or
transaction covenants (Item 1121(a)(12) of Regulation AB); and
(iii) information regarding new asset-backed securities issuances
backed by the same pool assets, any material pool asset changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or selection of
pool assets (Item 1121(a)(14) of Regulation AB).
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Upon request, the Servicer shall provide to the Master Servicer and the
Depositor evidence of the authorization of the person signing any certification
or statement, copies or other evidence of Fidelity Bond Insurance and Errors and
Omission Insurance policy, financial information and reports, and such other
information related to the Servicer or any Subservicer or the Servicer or such
Subservicer's performance hereunder.
The obligations set forth in paragraphs (d) and (e) of this Section shall only
apply with respect to periods for which reports are required to be filed with
respect to the Trust under the Exchange Act.
Section 2.22. Lost Instruments Affidavit and Indemnity.
With respect to any BANA Mortgage Loan, if a "lost instruments affidavit
and indemnity" or any equivalent document is required pursuant to Section
2.01(b) of the Pooling and Servicing Agreement, the Servicer shall prepare,
execute and deliver or cause to be prepared, executed and delivered, on behalf
of the Trust, such a document to the public recording office.
Section 2.23. Buy-Down Account; Application of Buy-Down Funds.
In addition to the BANA Custodial Account, if any of the Mortgage Loans are
Buy-Down Mortgage Loans, the Servicer shall establish and maintain a Buy-Down
Account and shall deposit therein all Buy-Down Funds not later than the Business
Day following the day of receipt and posting by the Servicer. The Servicer shall
keep and maintain a separate account for each Buy-Down Mortgage Loan for the
purpose of accounting for deposits to and withdrawals from the Buy-Down Account.
The Servicer shall invest the funds in the Buy-Down Account in investments which
are Permitted Investments. All income and gain realized from any such
investment, to the extent not required by the applicable Buy-Down Agreements to
be applied to pay interest on the related Buy-Down Mortgage Loans, shall be for
the benefit of the Servicer. The amount of any losses incurred in respect of
such investments shall be deposited in the Buy-Down Account by the Servicer out
of its own funds immediately as realized.
With respect to each Buy-Down Mortgage Loan, on the Business Day next
following receipt of the Mortgagor's required monthly payment under the related
Buy-Down Agreement, the Servicer shall withdraw from the Buy-Down Account and
deposit in immediately available funds in the BANA Custodial Account an amount
which, when added to such Mortgagor's payment, will equal the full monthly
payment due under the related Mortgage Note.
Upon termination of a Buy-Down Agreement, no further Buy-Down Funds
relating thereto shall be deposited into the BANA Custodial Account, and the
Servicer may withdraw the related Buy-Down Funds which remain in the Buy-Down
Account and distribute such funds as provided by such Buy-Down Agreement.
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ARTICLE III
SERVICER'S CERTIFICATE; REMITTANCES
Section 3.01. Servicer's Certificate.
Each month, not later than 12:00 noon Eastern time on the 5th Business Day
of such month (or if such day is not a Business Day, the following Business
Day), the Servicer shall deliver to the Securities Administrator and the Master
Servicer, a Servicer's Certificate (in substance and format mutually acceptable
to the Servicer, the Securities Administrator and the Master Servicer) certified
by a Servicing Officer setting forth the information reasonably necessary in
order for each of the Securities Administrator and the Master Servicer to
perform its respective obligations under the Pooling and Servicing Agreement,
including a delinquency report, a monthly collection report and a realized loss
report in a format agreed to by the Servicer, the Securities Administrator and
the Master Servicer each in a mutually agreeable electronic format, as to the
remittance on such Remittance Date and as to the period ending on the last day
of the month preceding such Remittance Date. Each of the Securities
Administrator and the Master Servicer may conclusively rely upon the information
contained in the Servicer's Certificate for all purposes hereunder and shall
have no duty to verify or re-compute any of the information contained therein.
Section 3.02. Remittances.
On each Remittance Date, the Servicer shall remit by wire transfer of
immediately available funds to the Master Servicer an amount equal to the
portion of the Pool Distribution Amount relating to the BANA Mortgage Loans and
any other amounts due to the Master Servicer under this Agreement for such
Distribution Date, to the extent on deposit. The Servicer shall send wire
remittances to the Master Servicer pursuant to the following wire instructions:
Bank Name: CitiBank (West)
Bank City/State: Glendale, CA
ABA Number: 000000000
Account Name: CMI MSD Clearing
Account Number: #070-0000000
ARTICLE IV
THE SERVICER
Section 4.01. Liabilities of the Servicer.
The Servicer shall be liable in accordance herewith only to the extent of
the obligations specifically and respectively imposed upon and undertaken by the
Servicer herein.
Section 4.02. Merger or Consolidation of the Servicer.
The Servicer will each keep in full effect its existence, rights and
franchises as a separate entity under the laws governing its organization, and
will obtain and preserve its qualification to
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do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the BANA Mortgage
Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer, 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 to the Servicer shall be qualified to service
mortgage loans on behalf of FNMA or FHLMC.
Section 4.03. Limitation on Liability of the Servicer.
None of the Servicer or any of the directors, officers, employees or agents
of the Servicer shall be under any liability to the Trust Estate or the
Certificateholders 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 Servicer or any
such Person against any breach of warranties or representations made herein or
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Servicer and any
director, officer, employee or agent of Servicer 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 Servicer and any director,
officer, employee or agent of the Servicer shall be indemnified by the Trust
Estate and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific BANA Mortgage
Loan or BANA Mortgage Loans (except as any such loss, liability or expense shall
be otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. The Servicer shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to
its respective duties under this Agreement and which in its opinion may involve
it in any expense or liability; provided, however, that the Servicer may in its
discretion 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 and
the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Estate, and the Servicer shall be
entitled to be reimbursed therefor out of amounts attributable to the BANA
Mortgage Loans on deposit in the BANA Custodial Account as provided by Section
2.10.
Section 4.04. Servicer Not to Resign.
Subject to the provisions of Section 4.02, the Servicer shall not resign
from its obligations and duties hereby imposed on it except upon determination
that its duties hereunder are no longer permissible under applicable law. Any
such determination permitting the resignation of the Servicer shall be evidenced
by an Opinion of Counsel to such effect delivered to the Master
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Servicer. No such resignation by the Servicer shall become effective until the
Master Servicer or a successor Servicer shall have assumed such Servicer's
responsibilities and obligations in accordance with Section 5.02.
Section 4.05. Representations, Warranties and Covenants of the Servicer.
(a) The Servicer hereby makes the following representations and warranties
to the Depositor, the Master Servicer, the Securities Administrator and the
Trustee, as of the Closing Date:
(i) The Servicer 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 of the
states 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 Servicer. The Servicer has power and authority to execute
and deliver this Agreement and to perform 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
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized. This Agreement, assuming due
authorization, execution and delivery by the other parties hereto,
evidences the valid, binding and enforceable obligation of the Servicer,
subject to applicable law except as enforceability may be limited by (A)
bankruptcy, insolvency, liquidation, receivership, moratorium,
reorganization or other similar laws affecting the enforcement of the
rights of creditors and (B) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All requisite
corporate action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms.
(ii) No consent, approval, authorization or order is required for the
transactions contemplated by this Agreement from any court, governmental
agency or body, or federal or state regulatory authority having
jurisdiction over the Servicer is required or, if required, such consent,
approval, authorization or order has been or will, prior to the Closing
Date, be obtained.
(iii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the amended and
restated article of association or by-laws of the Servicer or result in the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Servicer or its property is subject, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject.
(iv) There is no action, suit, proceeding or investigation pending or,
to the best knowledge of the Servicer, threatened against the Servicer
which, either individually or in the aggregate, would result in any
material adverse change in the business, operations,
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financial condition, properties or assets of the Servicer, or in any
material impairment of the right or ability of the Servicer to carry on its
business substantially as now conducted or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken
or to be taken in connection with the obligations of the Servicer
contemplated herein, or which would materially impair the ability of the
Servicer to perform under the terms of this Agreement.
(b) The representations and warranties made pursuant to this Section 4.05
shall survive delivery of the Mortgage Files to the Trustee for the benefit of
the Certificateholders.
Section 4.06. REMIC Related Covenants.
For as long as the Trust shall exist, the Servicer shall act in accordance
herewith to assure continuing treatment of each REMIC as a REMIC and avoid the
imposition of tax on any REMIC. In particular:
(a) Except as otherwise provided in the Code, (i) the Servicer shall not
contribute to the Trust Estate property unless substantially all of the property
held in any REMIC constitutes either "qualified mortgages" or "permitted
investments" as defined in Code Sections 860G(a)(3) and (5), respectively, and
(ii) no property shall be contributed to either REMIC after the start-up day
unless such contribution would not subject the Trust Estate to the 100% tax on
contributions to a REMIC after the start-up day of the REMICs imposed by Code
Section 860G(d).
(b) The Servicer shall not knowingly accept, on behalf of the Trust Estate
any income from assets other than those permitted to be held by a REMIC.
The Servicer shall not engage in a "prohibited transaction" (as defined in
Code Section 860F(a)(2)), except that, with the prior written consent of the
Master Servicer, the Securities Administrator and the Depositor, the Servicer
may engage in the activities otherwise prohibited by the foregoing paragraphs
(a) and (b); provided that the Servicer shall have delivered to the Master
Servicer and the Securities Administrator an Opinion of Counsel to the effect
that such transaction will not result in the imposition of a tax on any REMIC
and will not disqualify any REMIC from treatment as a REMIC; and, provided
further, that the Servicer shall have demonstrated to the satisfaction of the
Master Servicer and the Securities Administrator that such action will not
adversely affect the rights of the Holders of the Certificates, the Master
Servicer and the Securities Administrator and that such action will not
adversely impact the rating of the Certificates.
ARTICLE V
DEFAULT
Section 5.01. Events of Default.
If any one of the following events ("Events of Default") shall occur and be
continuing:
(a) any failure by the Servicer to deposit amounts in the BANA Custodial
Account in the amount and manner provided herein so as to enable the Securities
Administrator to distribute
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to Holders of Certificates any payment required to be made under the terms of
such Certificates and this Agreement (other than the payments required to be
made under Section 2.19); or
(b) failure on the part of the Servicer duly to observe or perform in any
material respect any other covenants or agreements of the Servicer set forth in
the Certificates or in this Agreement, which covenants and agreements continue
unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Master Servicer, the, Securities Administrator, the Trustee or
the Depositor, or to the Servicer, the Master Servicer, the Depositor, the
Securities Administrator and the Trustee by the Holders of Certificates
evidencing Voting Rights aggregating not less than 25% of all Certificates
affected thereby; or
(c) the entry of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings against the
Servicer, or for the winding up or liquidation of the Servicer's affairs, and
the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(d) the consent by the Servicer to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Servicer or
of or relating to substantially all of its property; or the Servicer 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 or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily
suspend payment of its obligations;
(e) the failure of the Servicer to remit any Monthly Advance required to be
remitted by the Servicer pursuant to Section 2.19 which failure continues
unremedied at 3:00 p.m. Eastern time on the Business Day prior to the related
Distribution Date;
(f) failure by the Servicer to duly perform, within the required time
period, its obligations under Sections 2.17, 2.18 and 2.21, which failure
continues unremedied for a period of ten (10) days after the date of such
failure;
then, and in each and every such case (other than clause (e) hereof), so long as
an Event of Default shall not have been remedied by the Servicer, the Master
Servicer shall, pursuant to the Pooling and Servicing Agreement, by notice then
given in writing to the Servicer and the Depositor, terminate all of the rights
and obligations of the Servicer under this Agreement. If an Event of Default
described in clause (e) hereof shall occur, the Master Servicer shall, by notice
to the Servicer and the Securities Administrator, terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the BANA
Mortgage Loans and proceeds thereof and the Master Servicer or a successor
Servicer appointed pursuant to Section 5.02 shall make the Advance which the
Servicer failed to make. On or after the receipt by the Servicer of such written
notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Certificates or the BANA Mortgage Loans or otherwise, shall
pass to and be vested in the Master Servicer pursuant to and under this Section
5.01 and Section 5.02(a), unless and until such time as the Master Servicer
shall appoint a successor Servicer pursuant to
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Section 5.02, and, without limitation, the Master Servicer is hereby authorized
and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the BANA Mortgage Loans and related documents, or otherwise,
including, without limitation, the recordation of the assignments of the BANA
Mortgage Loans to it. The Servicer agrees to cooperate with the Master Servicer
in effecting the termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the Master Servicer
for the administration by it of all cash amounts that have been deposited by the
Servicer in the BANA Custodial Account or thereafter received by the Servicer
with respect to the BANA Mortgage Loans. All costs and expenses (including
attorneys' fees) incurred in connection with transferring the Mortgage Files to
the successor Servicer and amending this Agreement to reflect such succession as
Servicer pursuant to this Section 5.01 shall be paid by the predecessor
Servicer. Notwithstanding the termination of the Servicer pursuant hereto, the
Servicer shall remain liable for any causes of action arising out of any Event
of Default occurring prior to such termination.
Section 5.02. Master Servicer to Act; Appointment of Successor.
(a) Within 90 days of the time the Servicer receives a notice of
termination pursuant to Section 5.01, the Master Servicer (or other named
successor) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof or shall appoint a successor pursuant to Section 2.06. Notwithstanding
the foregoing, (i) the parties hereto agree that the Master Servicer, in its
capacity as successor Servicer, immediately will assume all of the obligations
of the Servicer under this Agreement, (ii) the Master Servicer, in its capacity
as successor Servicer, shall not be responsible for the lack of information
and/or documents that it cannot obtain through reasonable efforts and (iii)
under no circumstances shall any provision of this Agreement be construed to
require the Master Servicer, acting in its capacity as successor to the Servicer
in its obligation to advance, expend or risk its own funds or otherwise incur
any financial liability in the performance of its duties hereunder if it shall
have reasonable grounds for believing that such funds are non-recoverable.
Subject to Section 5.02(b), as compensation therefor, the Master Servicer shall
be entitled to such compensation as the terminated Servicer would have been
entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, the Master Servicer may, if it shall be unwilling so
to act, or shall, if it is legally unable so to act, appoint, or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution having a net worth of not less than $10,000,000 as the
successor to the terminated Servicer hereunder in the assumption of all or any
part of the responsibilities, duties or liabilities of the Servicer hereunder;
provided, however, that any such institution appointed as successor Servicer
shall not, as evidenced in writing by each Rating Agency, adversely affect the
then current rating of any Class of Certificates immediately prior to the
termination of the terminated Servicer. The appointment of a successor Servicer
shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement prior to its termination as Servicer, nor shall any
successor Servicer be liable for any acts or omissions of the predecessor
Servicer or for any breach by the Servicer of any of its representations or
warranties contained herein or in any related document or agreement. Pending
appointment of a successor to the terminated Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Servicer hereunder; provided, however, that any such institution appointed
as successor Servicer shall not, as evidenced in writing by each Rating Agency,
adversely affect the then current rating of any Class of Certificates
immediately prior to the termination of the terminated Servicer. The appointment
of a successor Servicer shall not affect any liability of the predecessor
Servicer which may have arisen under this Agreement prior to its termination as
Servicer, nor shall any successor Servicer be liable for any acts or omissions
of the predecessor Servicer or for any breach by the Servicer of any of its
representations or warranties contained herein or in any related document or
agreement. Pending appointment of a
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successor to the terminated Servicer hereunder, unless the Master Servicer is
prohibited by law from so acting, the Master Servicer shall act in such capacity
as provided above. The Master Servicer and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. All Servicing Transfer Costs shall be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs, and if
such predecessor Servicer defaults in its obligation to pay such costs, such
costs shall be paid by the Trust.
(b) In connection with the appointment of a successor Servicer or the
assumption of the duties of the Servicer, as specified in Section 5.02(a), the
Master Servicer may make such arrangements for the compensation of such
successor as it and such successor agree.
(c) Any successor, including the Master Servicer, to the Servicer as
servicer shall during the term of its service as servicer maintain in force (i)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as servicer hereunder and (ii) a fidelity bond in
respect of its officers, employees and agents to the same extent as the Servicer
is so required pursuant to Section 2.03.
ARTICLE VI
TERMINATION
Section 6.01. Termination upon Purchase by the Master Servicer or Liquidation of
All Mortgage Loans.
Subject to Section 10.02 of the Pooling and Servicing Agreement, the
respective obligations and responsibilities of the Depositor and the Servicer
created hereby shall terminate upon the earlier of (a) the last action required
to be taken by the Securities Administrator on the Final Distribution Date
pursuant to Article X of the Pooling and Servicing Agreement or (b) the final
payment or other liquidation (or any advance with respect thereto) of the last
BANA Mortgage Loan remaining in the Trust Estate or the disposition of all
related REO Property.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Amendment.
This Agreement may be amended from time to time by the Servicer and the
Depositor with a written agreement signed by the Servicer and the Depositor;
provided that the party requesting such amendment shall, at its own expense,
provide the Trustee, the Securities Administrator and the Master Servicer with
an Opinion of Counsel that such amendment will not materially adversely affect
the interest of the Certificateholders in the BANA Mortgage Loans. Any such
amendment shall be deemed not to adversely affect in any material respect any
interest of the Certificateholders in the BANA Mortgage Loans if the Trustee
receives written confirmation from each Rating Agency that such amendment will
not cause such Rating Agency to reduce, qualify or withdraw the then current
rating assigned to the Certificates (and any Opinion of Counsel received by the
Trustee, Securities Administrator and the Master Servicer in
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connection with any such amendment may rely expressly on such confirmation as
the basis therefore); provided, however, this Agreement may be amended by the
Servicer and the Depositor from time to time without the delivery of an Opinion
of Counsel described above to the extent necessary, in the judgment of the
Servicer and its counsel, to comply with the SEC Rules.
Section 7.02. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT APPLICATION OF THE CONFLICTS OF LAWS PROVISIONS THEREOF,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
With respect to any claim arising out of this Agreement, each party
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan in The City of New York, and each party irrevocably waives any
objection which it may have at any time to the laying of venue of any suit,
action or proceeding arising out of or relating hereto brought in any such
courts, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process has been made by
any lawful means.
Section 7.03. Notices.
All demands, notices, instructions, directions, requests and communications
required or permitted to be delivered hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed by certified
mail, return receipt requested, to (a) in the case of the Depositor, Banc of
America Funding Corporation, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: General Counsel and Chief Financial Officer and (b) in the
case of the Servicer, Bank of America, National Association, 000 Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000, Attention: Servicing Manager.
Section 7.04. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, 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 7.05. Assignment by the Depositor.
Simultaneously with the conveyances of (i) the BANA Mortgage Loans on a
servicing-retained basis by Bank of America, National Association to the
Depositor pursuant to the Mortgage Loan Purchase Agreement and (ii) the BANA
Mortgage Loans by the Depositor to the Trustee pursuant to the Pooling and
Servicing Agreement, the Depositor will assign all of its
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rights hereunder to the Trustee, and the Trustee then shall succeed to all
rights of the Depositor under this Agreement.
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IN WITNESS WHEREOF, the Depositor and the Servicer have caused this
Agreement to be duly executed by their respective officers thereunto duly
authorized to be hereunto affixed, all as of the day and year first above
written.
BANC OF AMERICA FUNDING CORPORATION,
as Depositor
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Servicer
By: /s/ Xxxxx X. Good
------------------------------------
Name: Xxxxx X. Good
Title: Principal
[BAFC 2006-5 BANA Servicing Agreement]
Acknowledged and agreed to by:
CITIMORTGAGE, INC.,
as Master Servicer
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
[BAFC 2006-5 BANA Servicing Agreement]
EXHIBIT A
FORM OF CERTIFICATION OF ESTABLISHMENT OF ACCOUNT
[Date]
[_______________] hereby certifies that it has established a [__________]
Account pursuant to Section [________] of the Servicing Agreement, dated
September 28, 2006, between Banc of America Funding Corporation, as Depositor,
and Bank of America, National Association, as Servicer.
[_______________],
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Exhibit A-1
EXHIBIT B
Form of Xxxxxxxx-Xxxxx Certification
Banc of America Funding Corporation
Mortgage Pass-Through Certificates,
Series 2006-5
I, ________________________________, the _______________________ of Bank of
America, National Association (the "Servicer"), certify to Xxxxx Fargo Bank,
N.A. (the "Master Servicer") and its officers, with the knowledge and intent
that they will rely upon this certification, that:
1. I have reviewed the 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 Master Servicer pursuant to the Agreement (collectively,
the "Servicing Information");
2. Based on my knowledge, the 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 Servicing Information;
3. Based on my knowledge, all of the Servicing Information required to be
provided by the Servicer under the Agreement has been provided to the
Master Servicer;
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 in
all material respects; 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 Master
Servicer. Any material instances of noncompliance described in such reports
have been disclosed to the Master Servicer. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Exhibit B-1
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated party: [__________]
[_________], 200[_]
By:
------------------------------------
Name:
Title:
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EXHIBIT C
[Reserved]
Exhibit C-1
EXHIBIT D
CONTENTS OF THE SERVICING FILE
1. Copies of Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income, if required.
5. Verification of acceptable evidence of source and amount of downpayment.
6. Credit report on Mortgagor, in a form acceptable to either FNMA or FHLMC.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property, unless a survey is not required by the
title insurer.
10. 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, home owner association declarations,
etc.
11. Copies of all required disclosure statements.
12. If applicable, termite report, structural engineer's report, water
potability and septic certification.
13. Sales Contract, if applicable.
14. The Primary Insurance Policy or certificate of insurance or an electronic
notation of the existence of such policy, where required pursuant to the
Agreement.
Evidence of electronic notation of the hazard insurance policy, and if required
by law, evidence of the flood insurance policy.
Schedule D-1
EXHIBIT E
SERVICING CRITERIA TO THE ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Servicer shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria";
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
--------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to [X]
monitor any performance or other triggers and
events of default in accordance with the
transaction agreements.
1122(d)(1)(ii) If any material servicing activities are [X]
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements
to maintain a back-up servicer for the mortgage
loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy [X]
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 the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into [X]
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 transaction
agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf [X]
of an obligor or to an investor are made only by
authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding [X]
collections, cash flows or distributions, and
any interest or other fees charged for such
advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such [X]
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
transaction agreements.
Schedule I-1
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
--------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a [X]
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 Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent [X]
unauthorized access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis [X]
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 agreements.
INVESTOR REMITTANCES AND REPORTING [X]
1122(d)(3)(i) Reports to investors, including those to be [X]
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 serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and [X]
remitted in accordance with timeframes,
distribution priority and other terms set forth
in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted [X]
within two business days to the Servicer's
investor records, or such other number of days
specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor [X]
reports agree with cancelled checks, or other
form of payment, or custodial bank statements.
Exhibit E-2
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
--------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is [X]
maintained as required by the transaction
agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are [X]
safeguarded as required by the transaction
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the [X]
asset pool are made, reviewed and approved in
accordance with any conditions or requirements
in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any [X]
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.,
escrow) in accordance with the related mortgage
loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage [X]
loans agree with the Servicer's records with
respect to an obligor's unpaid principal
balance.
1122(d)(4)(vi) Changes with respect to the terms or status of [X]
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 asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., [X]
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 transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are [X]
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
deemed temporary (e.g., illness or
unemployment).
Exhibit E-3
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
--------------------------------------------------------------------------------
REFERENCE CRITERIA
--------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return [X]
for mortgage loans with variable rates are
computed based on the related mortgage loan
documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor [X]
(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 Mortgage Loans, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as [X]
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 number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with [X]
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 late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are [X]
posted within two business days to the obligor's
records maintained by the servicer, or such
other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible [X]
accounts are recognized and recorded in
accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or
Item 1115 of Regulation AB, is maintained as set
forth in the transaction agreements.
Exhibit E-4
SCHEDULE I
BANA MORTGAGE LOAN SCHEDULE
[Please see Exhibit D to Exhibit 4.1 of this Form 8-K]
Schedule I-1
