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RESIDENTIAL FLOW SERVICING AGREEMENT
BETWEEN
OCWEN FEDERAL BANK FSB,
SERVICER
AND
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
OWNER
DATED AUGUST 1, 1999
PERFORMING AND NON-PERFORMING
RESIDENTIAL MORTGAGE LOANS AND REO PROPERTIES
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Table of Contents
Page
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions.................................................1
Section 1.2. Interpretation of Agreement................................11
ARTICLE II
TRANSFER OF SERVICING, SERVICING RESPONSIBILITIES AND SERVICING COMPENSATION
Section 2.1. Transfer of Servicing Files to Servicer....................11
Section 2.2. Release of Loan Documents..................................13
Section 2.3. Servicing Responsibilities.................................13
Section 2.4. Collection and Resolution Activities.......................18
Section 2.5. Servicing Compensation.....................................18
ARTICLE III
DEFAULT MANAGEMENT SERVICES
Section 3.1. Default Management Responsibilities........................19
Section 3.2. Foreclosure................................................19
Section 3.3. Deed in Lieu...............................................19
Section 3.4. Priority; Insurance Claims.................................20
Section 3.5. Bankruptcy of Obligor......................................20
Section 3.6. Discounted Payoffs.........................................20
ARTICLE IV
PROPERTY MANAGEMENT AND DISPOSITION SERVICES
Section 4.1. Property Management and Disposition Responsibilities.......20
Section 4.2. Environmental Problems.....................................21
ARTICLE V
STANDARDS FOR CONDUCT
Section 5.1. Standards of Care and Delegation of Duties.................21
Section 5.2. Transactions with Related Persons..........................22
Section 5.3. Access to Records..........................................22
Section 5.4. Annual Audit...............................................22
ARTICLE VI
BILLING OF AND REPORTS TO OWNER
Section 6.1. Property Protection Expenses and Property Improvement
Expenses...................................................23
Section 6.2. Remittances and Monthly Report.............................23
Section 6.3. Remittance Upon Termination................................24
Section 6.4. Billing....................................................24
Section 6.5. Missing Document Report....................................25
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of Servicer.................25
Section 7.2. Representations and Warranties of Owner....................26
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Liabilities to Obligors....................................28
Section 8.2. Servicer's Indemnity of Owner..............................28
Section 8.3. Owner's Indemnity of Servicer; Limitation on Liability of
Servicer...................................................28
Section 8.4. Indemnification Procedures.................................30
Section 8.5. Operation of Indemnities...................................31
ARTICLE IX
DEFAULT
Section 9.1. Events of Default..........................................31
Section 9.2. Effect of Transfer.........................................32
ARTICLE X
TERM
Section 10.1. Term of Agreement..........................................32
Section 10.2. Transfers of Servicing.....................................33
Section 10.3. Servicer Not to Resign.....................................33
Section 10.4. Successor Servicer.........................................33
ARTICLE XI
RECONSTITUTION
Section 11.1. Reconstitution.............................................34
ARTICLE XII
MISCELLANEOUS
Section 12.1. Successors and Assigns: No Third Beneficiaries.............36
Section 12.2. Choice of Law..............................................36
Section 12.3. Notices....................................................36
Section 12.4. Entire Agreement; Amendments; Waivers......................37
Section 12.5. No Joint Venture; Limited A&M..............................37
Section 12.6. Severabilily; Interpretation...............................37
Section 12.7. Counterparts...............................................37
Section 12.8. Waiver of Jury Trial.......................................37
Section 12.9. Limitation of Damages......................................38
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EXHIBITS
The following exhibits are incorporated into this Agreement:
EXHIBIT A......... Monthly Report
EXHIBIT B......... Servicing File
EXHIBIT C......... Acknowledgment Agreement
EXHIBIT D......... Form of Opinion of Counsel
EXHIBIT E......... Form of Officer's Certificate
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RESIDENTIAL FLOW SERVICING AGREEMENT
This Residential Flow Servicing Agreement (this "Agreement") dated
effective as of August 1, 1199, by and between Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc., a New York corporation ("Owner") and Ocwen
Federal Bank FSB, a federal savings bank (the "Servicer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Owner (i) owns certain loans secured by mortgages and/or deeds
of trust ("Loans") and "red estate owned" properties ("REO Properties") and (ii)
may from time to time originate or buy additional Loans and REO Properties for
its own account;
WHEREAS, Owner and Servicer desire to set forth the terms and
conditions on which Servicer will service and provide management and disposition
services for such mortgage loans and "real estate owned" properties;
NOW, THEREFORE, in consideration for the mutual benefits and
obligations as hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1.Definitions. Capitalized terms used in this Agreement and
not otherwise defined shall have the meanings given to them in this Section 1.1.
"Accepted Servicing Practices" means, with respect to any Loan or REO
Property, those servicing, collection, resolution or disposition practices that
are undertaken with the same care, skill, prudence and diligence with which
Servicer services and administers mortgage loans or properties hold for other
portfolios similar to the Loan or REO Property, as the case may be, but without
regard to:
1. any relationship that Servicer, any sub-servicer or any
affiliate of Servicer or any sub-servicer may have with the
related Obligor, or
2. Servicer's or any sub-servicer's right to receive compensation
for its services hereunder or with respect to any particular
transaction; or
3. the ownership, or servicing or management for others, by
Servicer or any sub-servicer, of any other mortgage loans or
property;
provided, however, that such services are performed in compliance with the terms
of this Agreement.
"Acknowledgment Agreement" means the document, substantially in the
form of Exhibit C, to be executed by Owner and Servicer on or prior to each
Transfer Date.
"Agency Transfer" means the sale or transfer by Owner of some or all of
the Loans to FNMA under its Cash Purchase Program or its MBS Swap Program
(Special Servicing Option) or to FHLMC under its Xxxxxxx Xxx Xxxx Program or
Gold PC Program, retaining Servicer as "servicer thereunder."
"Agreement" means this Servicing Agreement as amended, modified or
supplemented from time to time, including all exhibits and schedules hereto.
"Ancillary Income" means all income (other than interest and prepayment
penalties) from the Loans and REO Properties to which Servicer is entitled
(exclusive of the Servicing Fee), including, without limitation, late charges,
insufficient fund fees, assumption fees, modification fees, fees associated with
any repayment plan or forbearance agreement, fees associated with any discounted
payoff, interest on the Collection Account and Escrow Accounts (but only to the
extent that applicable Requirements or the Loan Documents do not require that
such interest be paid to the applicable Obligor) and all other incidental fees.
Servicer shall be entitled to retain all Ancillary Income.
"Association" means any homeowners' association or condominium
association.
"Balloon Mortgage Loan" means any Loan that by its original terms or by
virtue of any modification provides for an amortization schedule extending
beyond its originally scheduled Maturity Date.
"Balloon Payment" means, with respect to a Balloon Mortgage Loan as of
any date of determination, the amount outstanding on the Maturity Date of such
Balloon Mortgage Loan in excess of the related Monthly Payment.
"Bankruptcy Code" means 11 U.S.C. 101 et. seq., as the same may be
amended, modified or supplemented from time to time.
"Business Day" means any day other than (a) a Saturday or Sunday or (b)
a day on which banking and savings and loan institutions in the States of
Florida, New York or New Jersey are authorized or obligated by law or executive
order to be closed.
"Collection Account" means the separate account(s) created pursuant to
Section 2.3(a) of this Agreement, which shall be entitled "Ocwen Federal Bank
FSB, as Servicer, in trust for Xxxxxx Capital, A Division of Xxxxxx Brothers
Holdings Inc. and its successors and assigns."
"Collection Period" means with respect to each Distribution Date, the
calendar month prior to the month of the Distribution Date.
"Current Servicer" means Owner or any other servicer, sub-servicer,
document custodian, owner, holder, originator or other Person who, as of the
date of this Agreement, has possession of any document or information
constituting a part of the Servicing File and who was servicing the Loans and
REO Properties prior to the Transfer Date.
"Custodian" means the custodian appointed by the Owner to hold the Loan
Documents.
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"Determination Date" means the last day (or if such day is not a
Business Day, the Business Day immediately preceding such day) of the Collection
Period.
"Disposition" means any (a) taking of Mortgaged Property by eminent
domain or condemnation or sale in lieu thereof, (b) the liquidation of a
defaulted Loan through a foreclosure sale, trustee's sale, deed-in-lieu of
foreclosure or otherwise, (c) a sale or assignment of a Loan or REO Property in
accordance with the terms hereof, and/or (d) any other disposition of the Loan
or REO Property whether through a discounted payoff, prepayment, Balloon Payment
or any other similar disposition.
"Distribution Date" means, prior to any Reconstitution, the tenth day
of each month, or if such day is not a Business Day, the next succeeding
Business Day.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Co.
"Eligible Account": An account maintained with a depository
institution, (i) whose accounts are insured by the FDIC and (ii) whose (or whose
direct or indirect parents) long term unsecured debt obligations are rated at
least "A" or better by one of the Rating Agencies.
"Environmental Liability" shall have the meaning ascribed thereto in
Section 8.3(c).
"Environmental Problem Property" means a Property that is in violation
of any environmental law, rule or regulation.
"Escrow Accounts" means the separate account(s) created pursuant to
Section 2.3(a) of this Agreement, for the payment of taxes, Association dues,
assessments, Hazard Insurance and Mortgage Insurance premiums, ground rents and
similar items which shall be entitled "Ocwen Federal Bank FSB, as Servicer, in
bust for Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc. and its
successors and assigns, and various mortgagors."
"Escrow Payments" means amounts required to be paid for taxes,
Association dues, assessments, Hazard Insurance and Mortgage Insurance premiums,
ground rents and similar items and, any and all other purposes for which funds
are required to be held in escrow.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation or any
successor thereto.
"Fitch" means Fitch Investors Services, L.P.
"Flood Insurance Policy" means an insurance policy insuring against
flood damage to a Mortgaged Property.
"FNMA" means- the Federal National Mortgage Association or any
successor thereto.
"Hazard Insurance" means casualty, fire, hazard, flood, wind, liability
or similar insurance policies relating to a Property.
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"HUD" means the United States Department of Housing and Urban
Development.
"Liability" shall have the meaning ascribed thereto in Section 8.2.
"Liquidation Proceeds" means cash received in connection with the
liquidation of defaulted Loans, whether through a Disposition or otherwise, net
of the amount of any broker's fees payable in connection with any sale of a REO
Property (but without any deduction for any legal fees or other costs or
expenses).
"Loan" means a loan, secured by a mortgage or deed of trust on certain
real property, acquired by Owner and for which the servicing is transferred to
Servicer from time to time pursuant to the terms and provisions of Section 2.1;
the term "Loan" shall include Performing Loans and Non-Performing Loans.
"Loan Documents" means the promissory note, mortgage or deed of trust,
assignment of mortgage, intervening assignments of mortgage, title insurance
policy or binder, Mortgage Insurance or guaranty agreement and any other
agreement, instrument or other document evidencing or relating to a Loan and any
other agreement, instrument or other document evidencing ownership of a REO
Property.
"Maturity Date" means, with respect to any Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related promissory note.
"Missing Document Report" means the report prepared by Servicer and
delivered to Owner pursuant to Section 6.5.
"Monthly Collection Amount" means, for each Distribution Date, all
amounts actually received into Servicer's lock box during the related Collection
Period with respect to the Loans and REO Properties from whatever source (other
than partial and forbearance payments), amounts representing accrued taxes and
insurance premiums; not yet due and payable to the applicable taxing authority
or insurer, calculated in accordance with the then current escrow analysis
performed by Servicer in accordance with applicable Requirements.
"Monthly Payment" means with respect to any Loan and any Collection
Period, the scheduled monthly payment of principal and interest, excluding any
Balloon Payment, on such Loan which is payable in such Collection Period.
"Monthly" means the monthly report prepared by Servicer and delivered
to Owner pursuant to Section 6.2.
"Moody's" means Moody's Investor's Service Inc.
"Mortgage Insurance" means any mortgage insurance or guaranty relating
to a Loan issued by a Mortgage Insurer.
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"Mortgage Insurer" means the Federal Housing Administration as a
mortgage insurer, the United States Department of Veterans Affairs as a mortgage
guarantor and any issuer of private mortgage insurance.
"Mortgage Loan Remittance Rate" means with respect to each Loan, the
annual rate of interest remitted to Owner, which shall be equal to the interest
rate on the Loan under the Loan Documents minus the annual rate of the Servicing
Fee.
"Mortgaged Property" means the real property securing a Loan.
"Non-Performing Loan" means as of the Determination Date, a Loan for
which any one of the following applies: (a) any Monthly Payment is delinquent at
least three (3) calendar months determined without giving effect to any grace
period permitted by the related Loan Documents; (b) there has been a material
default under the terms and provisions of the Loan Documents, and such material
default is not likely to be cured by Obligor within three (3) calendar months;
(c) as to which Servicer shall have received notice of the foreclosure (or
deed-in-lieu of foreclosure) or proposed foreclosure (or proposed deed-in-lieu
of foreclosure) or exercise of other remedies of any other mortgage or lien on
the Mortgaged Property; (d) as to which the Obligor has entered into or
consented to bankruptcy, appointment of a receiver or conservator or a similar
insolvency or similar proceeding, or the Obligor has become the subject of a
decree or order for such a proceeding which shall have remained in force
undischarged or unstayed for a period of two (2) calendar months; or (e) as to
which the Obligor admits in writing its inability to pay its debts generally as
they become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its creditors
or voluntarily suspends payments of its obligations.
"Non-Recoverable Advance" shall have the meaning set forth in Section
2.3(b) below.
"Obligor" means the Person or Persons obligated to make payments of
principal and interest on the Loan, and includes all joint, several or joint and
several obligors and all guarantors other than Mortgage Insurers.
"Officer's Certificate" means a certificate, substantially in the form
of Exhibit E, executed by an officer of the Servicer and delivered to the Owner
on the date hereof.
"Opinion of Counsel" means an opinion of counsel, substantially in the
form of. Exhibit D, delivered to Owner on the date hereof.
"Owner" means Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc.
"Pass-Through Transfer" means the sale or transfer of some or all of
the Loans by Owner to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.
"Performing Loan" means any Loan which is not a Non-Performing Loan as
of the Determination Date.
"Permitted Loan" means, any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Distribution Date in each month:
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(a) direct obligations of, and obligations fully guaranteed
by, the United States of America, FHLMC, FNMA, the Federal Home Loan
Banks or any agency or instrumentality of the United States of America
the obligations of which are backed by the M faith and credit of the
United States of America;
(b) (i) demand and time deposits in, certificates of deposit
of, bankers acceptances issued by, or federal finds sold by, and
depository institution or trust company (including Servicer or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal or state authorities,
so long as, at the time of such investment or contractual commitment
providing for such investment, such depository institution or trust
company or its ultimate parent has a short-term unsecured debt rating
in one of the two highest available rating categories of S&P and the
highest available rating category of Moody's Investor's Service Inc.
and provided that each such investment has an original maturity of no
more than 365 days, and (ii) any other demand or time deposit or
deposit which is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (a) above and entered
into with a depository institution or trust company (acting as
principal) rated "A" or higher by S&P and rated "A2" or higher by
Moody's; provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (a)
above and must (i) be valued daily at current market price plus accrued
interest, (ii) pursuant to such valuation, be equal, at all times, to
at least 105% of the cash transferred by Servicer in exchange for such
collateral, and (iii) be delivered to Servicer, or if Servicer is
supplying the collateral, an agent for Servicer, in such a manner as to
accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of
America or any state thereof which has a short-term unsecured debt
rating in the highest available rating category of each of the Rating
Agencies at the time of such investment.
(e) commercial paper having an original maturity of less than
180 days and issued by an institution having a short-term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment.
(f) a guaranteed investment contract approved by each of the
Rating Agencies and Owner and issued by an insurance company or other
corporation having a short-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of
such investment;
(g) money market funds having one of the two highest available
rating categories of S&P and the highest available rating category of
Moody's at the time of such investment, which invests only in other
Eligible Investments;
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(h) Federal Housing Administration debentures; provided, that
any such investment shall be rated in one of the two highest ratings
categories by each Rating Agency;
(i) FHLMC participation certificates which guaranty timely
payment of principal and interest and senior debt obligations;
(j) Consolidated senior debt obligations of any Federal Home
Loan Banks;
(k) FNMA mortgage-backed securities (other than stripped
mortgage securities which are valued greater than par on the portion of
unpaid principal) and senior debt obligations;
(l) Federal funds, certificates of deposit time deposits, and
bankers' acceptances (having original maturities of not more than 365
days) of any domestic bank, the short-term debt obligations of which
have been rated F-1+ or better by Fitch, A-1+ or better by S&P and P-1
by Moody's; or
(m) Deposits of any bank or savings and loan association (the
long-term deposit rating of which is Baa3 or better by Moody's and BBB
by each of S&P and Fitch) which has combined capital, surplus and
undivided profits of at least $50,000,000 which deposits are insured by
the FDIC and held up to the limits insured by the FDIC;
provided that all instruments described hereunder shall mature at par on or
prior to the next succeeding Distribution Date unless otherwise provided in this
Agreement and that no instrument described hereunder may be purchased at a price
greater than par if such instrument may be prepaid or called at a price less
than its purchase price prior to stated maturity.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or agency or political subdivision
thereof.
"Preliminary Servicing Period" means, with respect to any Loan, the
period commencing on the related Transfer Date and ending on the date the Owner
enters into a Reconstitution Agreement which amends or restates the servicing
provisions of this Agreement.
"Prepayment Interest Shortfall Amount" Upon any Reconstitution as set
forth in Article XI hereto, with respect to any Loan that was subject to a
principal prepayment in full during any Collection Period, which principal
prepayment was applied to such Loan prior to such Loan's due date in such
Collection Period, the amount of interest (net the related Servicing Fee) that
would have accrued on the amount of such principal prepayment during the period
commencing on the date as of which such principal prepayment was applied to such
Loan and ending on the day immediately preceding such due date, inclusive.
"Property" means any Mortgaged Property and/or REO Property.
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"Property Improvement Expenses" means any costs and expenses for
repairs, replacements or improvements which Servicer deems advisable under the
circumstances, but only to the extent that they:
(a) are paid to Persons who are generally in the business of
providing such goods and services;
(b) are reasonable for the types of goods or services provided
in the geographical area in which such goods or services are provided;
(c) are designed to maintain or improve the value of a
Property but not immediately necessary to operate it; and
(d) are incurred for the purpose of facilitating the sale of
the related Loan or REO Property and maximizing the proceeds thereof,
including but not limited to the following:
(i) cosmetic improvements such as painting and
landscaping;
(ii) replacement of items which are obsolete or
wearing out but which may not be
dysfunctional; and
(iii) moneys paid to a tenant or buyer for a
purpose similar to a Property Improvement
Expense.
"Property Protection Expenses" means the following costs and expenses,
but only to the extent that they are paid to Persons who are generally in the
business of providing such goods and services and are reasonable for the types
of goods or services provided in the geographical area in which such goods or
services are provided:
(a) utility costs;
(b) payments required under service contracts, including but
not limited to service contracts for heating, ventilation and air
conditioning systems, landscape maintenance, pest extermination,
security, model furniture, swimming pool service, trash removal,
answering service and credit checks;
(c) property management fees;
(d) usual and customary leasing and sales brokerage expenses
and commissions;
(e) permits, licenses and registration fees and costs;
(f) any expense necessary in order to prevent or cure a breach
under a lease, contract or agreement including any debt secured by a
lien which is superior or prior to the lien encumbering the Loan, if
the consequences of failure to prevent or cure could, in the sole
judgment of Servicer, have a material adverse effect with respect to a
Loan or Property;
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(g) any expense necessary in order to prevent or cure a
material violation of any applicable law, regulation, code or
ordinance;
(h) costs and expenses of brokers' price opinions and surveys
incidental to evaluation, leasing and/or sale of the Loans and/or
Properties;
(i) fees and expenses of attorneys, paralegals, surveyors,
title and escrow companies (including, without limitation, costs, fees
and/or expenses for title insurance premiums, title searches, escrow
fees. recording costs and all costs similar or related thereto), costs
incurred to obtain documents or information for the Servicing File, and
any costs and expenses related to the preparation and/or recordation of
releases of liens or satisfactions of mortgages (in whole or in part);
(j) property inspections; and
(k) other such reasonable fees and expenses incurred by
Servicer in connection with the enforcement, collection, foreclosure,
management and operation of the REO Property or the Mortgaged Property,
sales of REO Properties (including, without limitation, the costs and
expenses set forth ` in subsection (i) above and any and all transfer
taxes and other closing costs customarily paid by the seller in the
locale where such sale occurs) and the performance of its servicing
activities.
"Rating Agencies" means, collectively, Duff & Phelps, Fitch, Moody's
and S&P.
"Reconstitution" means the actions required by Section 11.1 in
connection with a Whole Loan Transfer, Agency Transfer or Pass-Through Transfer.
"Reconstitution Agreement" The agreement or agreements entered into by
Servicer and Owner and/or certain third parties on the Reconstitution Date or
Dates with respect to any or all of the Loans serviced hereunder, in connection
with an Agency Transfer, a Whole Loan Transfer or a Pass-Through Transfer as
provided in Section 11.1 hereof.
"Reconstitution Date" The date or dates on which any or all of the
Mortgage Loans subject to this Agreement shall be removed from this Agreement
and reconstituted as part of Whole Loan Transfer, Agency Transfer or
Pass-Through Transfer pursuant to Section 11.1 hereof.
"Requirements" means all federal, state or local laws and any other
requirements of any government or agency or instrumentality thereof applicable
to the servicing of the Loans, the management of the REO Properties or the
provision of services hereunder by Servicer.
"REO Property" means, (a) as of any Determination Date for the purpose
of calculating the relevant Servicing Fee, and (b) as of the actual date of
acquisition of title for all other purposes: any (i) real property owned by
Owner and made subject to this Agreement, and (ii) any Mortgaged Property that
was subject to a Loan, after the Mortgaged Property has been acquired on behalf
of Owner pursuant to this Agreement through foreclosure or similar proceedings,
acceptance of deed-in-lieu of foreclosure-, acquisition of title in lieu of
foreclosure or the acquisition-of title by operation of law.
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"S&P" means Standard & Poor's Rating Group.
"Servicer" means Ocwen Federal Bank FSB, a federal savings bank, its
successors in interest and permitted assigns.
"Servicer Event of Default" shall have the meaning set forth in Section
9. 1.
"Servicing Advances" means all amounts advanced by Servicer in payment
of Property Protection Expenses, Escrow Payments and Property Improvement
Expenses.
"Servicing Fee" means, collectively, with respect to any Loan or REO
Property, the servicing fees set forth on the related Acknowledgment Agreement.
"Servicing File" means with respect to each Loan, the Loan Documents
and information (including any servicing tapes, images and conversion reports)
received from the Current Servicer, provided by Owner (including title company
investigations of matters relating to the Loans and the REO Properties), or
obtained through the efforts of Servicer hereunder. To the extent reasonably
practicable the Servicing File will contain copies of the Loan Documents and
information described in Exhibit B hereto.
"Servicing Portfolio" means all Loans and REO Properties serviced by
Servicer pursuant to this Agreement.
"Setup" means, in connection with the transfer of servicing of Loans
and REO Properties to Servicer, the conversion of any data tape from the Current
Servicer, the uploading and quality control review of data, the uploading of
final trial balances, the posting of interim payment activity of the Loans, the
setup of tax, escrow and insurance records, and the management of the document
delivery process.
"Setup Expenses" means the direct out-of-pocket expenses incurred by
Servicer in connection with Setup of a Loan or REO Property, including, without
limitation, title searches, recording fees for powers of attorney and tax search
services.
"Setup Fee" means an initial fee for the Setup of each Loan and/or REO
Property , as set forth on the related Acknowledgment Agreement.
"Transfer Date" means the date on which the servicing of a pool of
Loans and/or REO Properties is transferred from the Current Servicer to the
Servicer and becomes part of the Servicing Portfolio, as evidenced by an
Acknowledgment Agreement, executed in accordance with Section 2.1.
"Whole Loan Transfer" means any sale or transfer of some or all of the
Loans by Owner to a third party, which sale or transfer is not a Pass-Through
Transfer.
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Section 1.2. Interpretation of Agreement.
(a) All references in this Agreement to designated Sections,
Articles, Exhibits and Schedules are to the designated sections and
articles of and exhibits and schedules to this Agreement.
(b) Use of the masculine gender is intended to include the
feminine and neuter genders.
(c) The headings and captions used in this Agreement are for
convenience of reference only and do not define, limit or describe the
scope or intent of the provisions of this Agreement (d) Terms in the
singular include the plural and vice versa.
(e) The term "includes" or "including" are intended to be
inclusive rather than exclusive.
ARTICLE II
TRANSFER OF SERVICING, SERVICING RESPONSIBILITIES AND SERVICING COMPENSATION
Section 2.1. Transfer of Servicing Files to Servicer.
(a) The Owner may request that Servicer add a pool of Loans or
REO Properties to the Servicing Portfolio at any time during the term
of this Agreement. Servicer shall have no obligation to accept any
Loans or REO Properties to be added to this Agreement. Within five
Business Days of any request for a pool of Loans and/or REO Properties
to be added, which request shall be accompanied by a description of the
Loans or REO Properties to be transferred and a proposed fee structure,
Servicer shall accept or reject such pool of Loans and/or REO
Properties. If Servicer accepts such pool, then Owner and Servicer
shall execute an Acknowledgment Agreement in the form of Exhibit C
hereto, and the Loans and/or REO Properties shall become a part of the
Servicing Portfolio. On the Transfer Date, Owner shall cause the
Current Servicer to transfer to Servicer the Servicing Files and/or
servicing records necessary to provide current data with respect to
each of the Loans and Properties. Such transfer shall occur in
accordance with such procedures as Owner and Servicer shall mutually
agree upon taking into account the requirements of this Agreement. In
the event that not all of the related Servicing; Files and/or necessary
servicing records are transferred on the applicable Transfer Date,
thereafter, Servicer, at Owner's reasonable expense, payable in
accordance with Section 6.4, shall use its best efforts to cause the
Current Servicer to transfer to Servicer any Servicing Files and/or
servicing records necessary to provide current data with respect to
each Loan and each REO Property which were not transferred to Servicer
on the applicable Transfer Date. Servicer shall transfer and convert
the Servicing Files to Servicer's system as soon as reasonably possible
from the date of receipt by Servicer of the Servicing Files and such
other documents as are reasonably necessary to service the Loans and
REO Properties from the Current Servicer.
11
(b) As of each Transfer Date, Owner hereby appoints Servicer
to provide and Servicer hereby assumes and accepts responsibility for
providing the services described herein with respect to each Loan and
REO Property; provided, however, that if Servicer is making diligent
efforts to complete and verify the Servicing File because a Servicing
File is not materially complete or contains incorrect information on
the Transfer Date, Servicer shall not be responsible for any failure to
provide any service hereunder, or for any inaction or any action taken
hereunder related to such incompleteness or incorrectness.
(c) To the extent that Owner holds a transferable, life of
loan tax service contract with TransAmerica on a Loan being transferred
to the Servicing Portfolio, Owner shall transfer such contract to
Servicer on the Transfer Date. If no such contract exists, then
Servicer shall obtain such a contract at Owner's sole expense as soon
as reasonably possible after the Transfer Date. Servicer also shall
obtain, at Owner's expense, tax reports for any Loans that are
Non-Performing Loans as of the Transfer Date. The costs of such
contract and tax reports shall be billed to, and paid by, Owner in
accordance with Section 6.4; provided that, to the extent that Servicer
chooses to obtain a life of loan transferable tax contract on a newly
originated Loan from TransAmerica, and the cost of such tax contract
exceeds $50, then Owner will not be responsible for reimbursing
Servicer for any amount over $50.
(d) Prior to the transfer to Servicer of the complete
Servicing File with respect to a Loan, Servicer shall not be
responsible for the payment of Escrow Payments with respect to such
Loan unless Servicer has actual knowledge of the existence, amount and
due date of such obligations, in which case Servicer shall determine in
accordance with Accepted Servicing Practices whether or not to make any
Escrow Payments within five (5) Business Days after it has actual
knowledge of the existence, amount and due date of such obligations. In
the case of property taxes and similar items, Servicer shall be deemed
not to have knowledge of the existence, amount and/or due date of such
obligations until five (5) Business Days after receiving a current
report with respect to the Mortgaged Property from a tax service
retained by Servicer, unless the Current Servicer provided that
information to Servicer as part of the servicing transfer. Servicer
shall be entitled to rely in all respects on any tax service report and
shall have no liability to Owner if a tax sale occurs for which
Servicer (i) received no notice from the applicable taxing authority
and received no information from the Current Servicer that would
indicate that the taxes were delinquent, or (ii) received a report from
a tax service indicating that the taxes were current.
(e) Upon reasonable request by Servicer, Owner shall furnish
Servicer with such limited powers of attorney and other documents
prepared by Servicer and satisfactory in form and substance to Owner as
may be necessary or appropriate to enable Servicer to liquidate,
collect payments against and otherwise service and manage the Loans and
REO Properties in accordance with this Agreement. Additionally,
Servicer may appoint certain designated servicing officers in a writing
to Owner and such designated servicing officers shall be authorized to
act upon behalf of Owner hereunder. Such list (or any amended list)
designating such servicing officers shall be sufficient so long as it
is executed by any officer of Servicer. All documents so provided to
Servicer shall be held in trust by Servicer on behalf of Owner.
12
(f) Owner agrees to cooperate fully with Servicer with respect
to all reasonable requests made by Servicer in connection with the
transfer of servicing pursuant to this Section 2.1.
Section 2.2. Release of Loan Documents. From time to time as is
appropriate for the servicing or foreclosure of a Loan or the acquisition of
Mortgaged Properties in lieu of foreclosure or for the making of any claim
against or collection under any Mortgage Insurance policy, Hazard Insurance
policy, other insurance policy, Servicer's fidelity bond, Servicer's errors and
omissions policy, or for purposes of effecting a partial release of any
Mortgaged Property from the lien of the, mortgage or for making any corrections
to the mortgage note or the mortgage or other Loan Documents, Servicer shall
deliver to the Custodian, or, if the Owner is acting as its own custodian, to
the Owner, an officer's certificate of Servicer certifying as to the reason for
such release and designating the Loan Documents requested to be released to
Servicer.
Within days of receipt of the foregoing, Owner shall deliver or cause
Custodian to deliver to Servicer the Loan Documents so requested. Servicer shall
cause the Loan Documents so released to be returned to the Custodian or Owner,
as applicable, when the need therefor by Servicer no longer exists, unless the
Mortgage Loan is liquidated and the proceeds thereof are deposited in the
Collection Account. Upon receipt of an Officer's Certificate of Servicer stating
that such Mortgage Loan was liquidated and the Liquidation Proceeds were
deposited in the Collection Account, the servicing receipt shall be released by
the Custodian or Owner, as applicable, to Servicer.
Servicer shall retain possession of any Loan Documents that have been
released to Servicer by the Custodian or Owner, as applicable, at all times
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Collection Account,
(ii) the Loan Documents have been delivered to an attorney or to a public
trustee or other public official as required by law for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property or (iii) Servicer's need therefor no longer exists and
Servicer returns the Loan Documents to the Custodian or Owner, as applicable,
pursuant to the previous paragraph.
Loan Documents held by Servicer are and shall be held in trust by
Servicer for the benefit of Owner as the owner thereof and Servicer's possession
of the Mortgage Loan Documents so retained is at the will of Owner for the sole
purpose of servicing the related Loan, and such retention and possession by
Servicer is in a custodial capacity only. The Loan Documents with respect to
each Loan shall be appropriately marked to clearly reflect the ownership of such
Loan by Owner.
Section 2.3. Servicing Responsibilities.
Subject to Accepted Servicing Practices, Servicer shall have full power
and authority to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Subject to Section 2.1 and in accordance with Accepted Servicing Practices, in
performing its obligations hereunder, Servicer shall comply with the following
with respect to each Loan or REO Property, continuously from the date hereof
until the date each Loan or REO Property ceases to be subject to this Agreement:
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(a) Servicer shall hold all funds received for Owner hereunder
in trust for Owner in a segregated Collection Account in accordance
with all applicable regulations and with a financial institution whose
accounts are insured by the FDIC to the amount available. To the extent
amounts on deposit exceed the FDIC insured limit, then the Servicer
either (1) shall deposit such excess amounts in a separate Eligible
Account or (2) shall invest such excess amounts in Permitted
Investments. The Collection Account shall be maintained with Servicer,
or if it is not maintained with Servicer, then it must be an Eligible
Account Any amounts held in the Collection Account may be, but are not
required to be, invested by Servicer in Permitted Investments. Any
income on the Collection Account shall belong to Servicer and may be
withdrawn therefrom in accordance with Sections 6.2 and 6.3. If losses
are incurred on investments in the Collection Account, Servicer
promptly shall deposit, from its own funds without right to
reimbursement, the full amount of such losses. Servicer shall make
remittances from the Collection Account as provided in Sections 6.2 and
6.3 and is authorized to make withdrawals from the Collection Account
for that purpose and to withdraw funds deposited therein in error and
to clear and terminate the. Collection Account upon termination of this
Agreement Servicer shall hold all funds received to cover Escrow
Payments in connection with the Loans in trust for Owner, and the
related Obligor in a segregated Escrow Account, which shall be
maintained in accordance with all applicable Requirements and the
terms; of the Loan Documents. The Escrow Account shall be maintained
with Servicer, or, if not maintained with Servicer, in an Eligible
Account Servicer shall disburse such funds from the appropriate Escrow
Accounts as necessary or advisable. Servicer shall also be authorized
to hold all partial payments and forbearance payments in the Escrow
Account and shall not be required to deposit same into the Collection
Account nor to remit same to Owner until such time as Servicer applies
such payments to the applicable Loan.
(b) Servicer shall deposit the following collections related
to the Loans and REO Property into the Collection Account within one
Business Day of receipt thereof, provided that Servicer may retain the
Servicing Fee earned per Loan or REO Property solely from the interest
portion of collections related to such Loan or REO Property (including
not only the interest portion of Obligor's payments, but also
recoveries with respect to interest from any Liquidation Proceeds,
proceeds of Hazard Insurance policies or other insurance policies and,
condemnation proceeds):
(i) all payments on account of principal and
interest on the Loans, including any payoffs
or curtailments and any prepayment
penalties;
(ii) any amounts received from the seller of a
Loan or any other person giving
representations and warranties with respect
to the Loan, in connection with the
repurchase of any Loan;
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(iii) all Liquidation Proceeds;
(iv) all proceeds of Hazard Insurance policies,
Flood Insurance policies or other insurance
policies (other than proceeds to be held in
the Escrow Account and applied to the
restoration and repair of the Property or
released to the Obligor in accordance with
the related Loan Documents; and
(v) (v) all condemnation proceeds that are not
applied to the restoration or repair of the
Property or released to the Obligor in
accordance with the related Loan Documents.
(c) Servicer shall timely determine the amounts of all required
disbursements from the Escrow Accounts and shall make disbursements as they
become due. Servicer shall also determine whether any delinquency exists in the
payment of Escrow Payments and shall use commercially reasonable efforts to
cause such deficient amounts to be paid by the Obligor. If there are not
sufficient funds in the appropriate Escrow Account to make such payments as they
become due, Servicer shall advance Escrow Payments unless Servicer determines in
its reasonable judgment that an advance pursuant to this or any other section
will not be ultimately recoverable from late payments, insurance proceeds,
Liquidating Proceeds or any other recovery on such Loan or Property (a
"Non-Recoverable Advance"). If Servicer determines that the Escrow Payment would
constitute a Non-Recoverable Advance, Servicer will not be obligated to make
such advance. Servicer shall notify Owner promptly in the event it deems any
Servicing Advance to be a Non-Recoverable Advance. Any advances made towards
Escrow Payments shall be deemed to be Servicing Advances, for which Servicer
shall be entitled to reimbursement pursuant to Section 6.2.
(d) Withdrawals from the Escrow Account or Accounts may be made by
Servicer only:
(i) to effect timely payments of Escrow Payments
for the related Loan;
(ii) to reimburse the Servicer for any Servicing
Advance made by the Servicer with respect to
a related Loan, but only from amounts
received on the related Loan that represent
late collections of Escrow Payments
thereunder;
(iii) to refund to any Obligor any funds found to
be in excess of the amounts required under
the terms of the related Loan;
(iv) for transfer to the Collection Account and
application to reduce the principal balance
of the Loan in accordance with the terms of
the related mortgage and mortgage note;
(v) for application to restoration or repair of
the Mortgaged Property;
15
(vi) to pay to the Servicer, or any Obligor to
the extent required by law, any interest
paid on the funds deposited in the Escrow
Account;
(vii) to clear and terminate the Escrow Account on
the termination of this Agreement; and
(viii) to withdraw funds deposited in error.
With respect to each Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Obligor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. The
Servicer assumes full responsibility for the timely payment of all such bills
and, shall effect timely payment of all such charges irrespective of each
Obligor's faithful performance in the payment of same or the making of the
Escrow Payments, and the Servicer shall make advances from its own funds to
effect such payments (unless Servicer determines, consistent with Accepted
Servicing Practices, that any required advance would be a Non-Recoverable
Advance). With regard to non-escrow Loans, the Servicer shall use reasonable
efforts consistent with Accepted Servicing Practices to determine that any such
payments are made by the Obligor at the time they first became due and shall
insure that the Mortgaged Property is not lost to a tax lien as a result of
nonpayment and that such mortgage is not left uninsured and shall make advances
from its own funds to effect any such delinquent payments to avoid the lapse of
insurance coverage on the Mortgaged Property or to avoid the imposition of a tax
lien (unless Servicer determines, consistent with Accepted Servicing Practices,
that any required advance would be a Non-Recoverable Advance).
(e) Servicer shall comply with the provisions of all applicable
Requirements and the Loan Documents relating to the giving of all notices or
other or required to be given by or on behalf of Owner to any Mortgage Insurer,
tide insurer or other insurer or guarantor, as applicable. Where any applicable
Requirement or the Loan Documents require any notice or other communication to
be given to an Obligor, Servicer shall, in the absence of instructions to the
contrary from Owner, give such notice or other communication to the Obligor.
16
(f) Except as otherwise prescribed by Accepted Servicing Practices with
respect to any Loans which are not first liens on the related Mortgaged
Properties, Servicer shall, as a Property Protection Expense if not paid by an
Obligor, (i) enforce the Obligor's obligations under the Loan Documents to cause
each Mortgaged Property to be insured against risks, hazards and liabilities as
required by all applicable Requirements and the Loan Documents, in an amount at
least equal to the unpaid principal balance of the Loan, and (ii) cause each REO
Property to be insured against risks, hazards and liabilities, in an amount
which is at least equal to the lesser of (A) the full replacement value of the
improvements which are a part of such REO Property, and (B) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property; such insurance shall be obtained from a financially sound and
reputable insurance carrier. Servicer shall retain copies of all Hazard
Insurance policies or certificates of insurance representing such coverage.
Servicer shall comply with all of the terms of Mortgage Insurance and guarantees
relating to any Loan and shall use its best efforts to maintain such Mortgage
Insurance and guarantees in full force and effect provided that Servicer has
actual knowledge of such insurance or guaranty. In the event of an insured loss
with respect to any REO Property, Servicer shall promptly file or cause to be
filed a claim on the Hazard Insurance. In the event of an insured loss with
respect to a Mortgaged Property, Servicer shall promptly file or cause to be
filed a claim on the Hazard Insurance unless Servicer has actual knowledge that
the Obligor has filed such a claim. In the case of a Mortgaged Property,
Servicer shall apply or disburse all insurance proceeds in accordance with the
terms and provisions of the Loan Documents and all Requirements, and, in the
case of a REO Property, Servicer shall apply or disburse all insurance proceeds
in accordance with the instructions of Owner, in each case net of any amounts
due to Servicer as otherwise provided herein. Servicer shall be responsible for
submitting a claim under any Mortgage Insurance or other guaranty or insurance
on a timely basis provided that Servicer has actual knowledge of such insurance
or guaranty. Except as otherwise prescribed by Accepted Servicing Practices with
respect to any Loans which are not first liens on the related Mortgaged
Properties, Servicer shall, as a Property Protection Expense and where the
Obligor fails or refuses to maintain insurance on the Mortgaged Property in
accordance with the applicable Loan Documents (or to pay escrows sufficient
therefor, as the case may be), subject the Mortgaged Properties to the coverage
of its "force-placed" hazard insurance policy with such deductible as Servicer
maintains for similar mortgaged properties serviced for itself and for others by
Servicer. The amount of any premiums to Servicer resulting from obtaining such
coverage shall be treated as a Property Protection Expense hereunder. The Owner
shall be solely responsible for the amount of the deductible in the event of any
loss and Servicer shall have no liability to Owner therefor.
Subject to the preceding paragraph, Servicer shall keep in force during
the term of this Agreement a fidelity bond and a policy or policies of insurance
covering errors and omissions in the performance of Servicer's obligations under
this Agreement. Such fidelity bond and policy or policies shall be maintained
with recognized insurers and shall be in such form and amount as would permit
Servicer to be qualified as a FNMA or FHLMC seller-servicer. Servicer shall be
deemed to have complied with this provision if an affiliate of Servicer has such
errors and omissions and fidelity bond coverage and, by the terms of such
insurance policy or fidelity bond, the coverage afforded thereunder extends to
Servicer.
Servicer shall ensure that Flood Insurance is maintained on Mortgaged
Premises (and REO) that are identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards (and the flood
insurance described below has been made available). Any such Flood Insurance
shall meet the current guidelines of the Federal Insurance Administration and
shall be with a generally acceptable insurance carrier.
17
The amount of the Flood Insurance Policy shall equal not less than the
least of (i) the lesser of (a) the unpaid principal balance of the Loan, plus
accrued interest and the aggregate of all Servicing Advances, and (b) the full
insurable value of the Mortgaged Property, but in each case not less than such
amount as is necessary to prevent the mortgagor and/or the mortgagee from
becoming a co-insurer or loss payee, and (ii) the maximum amount of insurance
which was available under the Flood Disaster Protection Act of 1973.
(g) Servicer shall prepare promptly each report required by all
applicable Requirements including reports to be delivered to all governmental
agencies having jurisdiction over the, servicing of the Loans and the Escrow
Accounts, shall execute such reports or, if Owner must execute such reports,
shall deliver such reports to Owner for execution prior to the date on which
such reports are due and shall file such reports with the appropriate Persons.
Servicer shall timely prepare and deliver to the appropriate Persons Internal
Revenue Service forms 1098, 1099 and 1099A (or any similar replacement, amended
or updated Internal Revenue Service forms) relating to any Loan for the time
period such Loan has been serviced by Servicer. T he reports to be provided
under this subsection shall cover the period through the end of the month
following the termination of this Agreement or, in the case of reports to be
sent to the Internal Revenue Service, the end of the calendar year following
termination of the Agreement Servicer shall promptly prepare all reports or
other information required to respond to any inquiry from or give any necessary
instructions to any Mortgage Insurer, provider of Hazard Insurance or other
insurer or guarantor, taxing authority, tax servicer, Association or the
Obligor.
(h) Servicer shall maintain adequate facilities and experienced staff
to carry out its obligations hereunder.
(i) Servicer shall hold and be responsible for responding promptly and
accurately to all reasonable requests from Owner, the Obligor or other Persons
for information relating to a Loan or REO Property or to the Obligor that
Servicer is required or permitted to disclose to such Person, upon compliance by
such Person of any conditions to the release of such information.
(j) Servicer shall cooperate with Owner in facilitating any financing
or securitization or whole loan transfer of the Loans, including furnishing such
reports and information with -respect to the Loans or with respect to Servicer
as Owner may reasonably request, and facilitating the transfer of servicing of
the Loans to such entity as Owner may designate in connection with an Agency
Transfer, a Pass-Through Transfer or Whole Loan Transfer of the Loans. Any and
all costs, fees and expenses incurred by Servicer in connection with the
foregoing shall be paid by Owner pursuant to Section 6.4.
(k) All collections on any Loan, unless the terms of the Loan specify
otherwise, be applied first to accrued unpaid interest, then to principal then
due, and finally to any other amounts payable under the terms of the Loan.
18
Section 2.4. Collection and Resolution Activities. Servicer shall be
responsible, continuously from the Transfer Date until the date each Loan ceases
to be subject to this Agreement, for using measures consistent with the Accepted
Servicing Practices to attempt to collect delinquent payments on each Loan.
Section 2.5. Servicing Compensation. Servicer shall be entitled to the
Setup Fee (as set forth in the related Acknowledgment Agreement) related to a
Loan or REO Property on the related Transfer Date. Owner shall pay the Setup Fee
in accordance with Section 6.4. Servicer shall be entitled each month to the
Servicing Fee. The Servicing Fee shall be prorated for any period of less than a
full calendar month based upon the number of days such Loan was serviced by
Servicer. In addition, Servicer shall be entitled to retain all Ancillary
Income. Servicer shall not be obligated to deposit any Ancillary Income into the
Collection Account. In the event that Servicer deposits into the Collection
Account any Ancillary Income, Servicer may withdraw such amount at any time from
the Collection Account, any provision herein to the contrary notwithstanding.
ARTICLE III
DEFAULT MANAGEMENT SERVICES
Section 3.1. Default Management Responsibilities. Without limiting the
generality of Section 2.3, Servicer is hereby authorized and empowered by Owner
to take the following actions, without limitation: (i) prepare, execute and
deliver, on behalf of Owner at its expense, any and all financing statements,
continuation statements and other documents or instruments necessary to maintain
the hen on each Mortgaged Property and related collateral; and modifications,
waivers (including, without limitation, waivers of any late -payment charge in
connection with any delinquent payment on a Loan), consents, amendments,
discounted payoff agreements, forbearance agreements, cash management agreements
or consents to or with respect to any documents contained in the related
Servicing File; and any and all instruments of satisfaction or cancellation, or
of partial or full release or discharge, and all other instruments comparable to
any of the -types of instruments described in this subsection (i), and (ii)
institute and prosecute judicial and non-judicial foreclosures, suits on
promissory notes, indemnities, guaranties or other Loan Documents, actions for
equitable and/or extraordinary relief (including, without limitation, actions
for temporary restraining orders, injunctions, and appointment of receivers),
suits for waste, fraud and any and all other tort, contractual and/or other
claims of whatever nature, and to appear in and file on behalf of Owner such
pleadings or documents as may be necessary or advisable in any bankruptcy
action, state or federal suit or any other action.
Section 3.2. Foreclosure. If Servicer reasonably determines that
foreclosure is appropriate with respect to a Loan (including if it determines
that foreclosure is appropriate in conjunction with or as an alternative to
collection efforts and default management services hereunder), Servicer shall
retain an attorney and supervise the conduct of the foreclosure proceeding. If
the Property is acquired in the foreclosure proceeding, Servicer may acquire the
Property in the name of Owner or its designee, and Servicer shall commence
providing property and disposition services as provided in Section 4.1.
Notwithstanding anything to the contrary contained herein, in the event Servicer
has reasonable cause to believe that a Property is an Environmental Problem
Property as described in Section 4.2 hereof, Servicer shall notify Owner of the
existence of the Environmental Problem Property, describe such problem, make a
re commendation to Owner regarding handling the Property and carry out the
recommendation unless otherwise directed by Owner in writing within five (5)
days after Owner's receipt (or deemed receipt) of such notice in accordance with
the terms and provisions of Section 11.3 below. In no event will Servicer be
required to acquire record title to an Environmental Problem Property. If
Servicer elects to proceed with a foreclosure in accordance with the laws of the
state where the Mortgaged Property is located, Servicer shall not be required to
pursue a deficiency judgment against the related Obligor or any, other liable
party if the laws of the state do not permit such a deficiency judgment after
such foreclosure or if Servicer determines in its reasonable judgment that the
likely recovery if a deficiency judgment is obtained will not be sufficient to
warrant the cost, time, expense and/or exposure of pursuing the deficiency
judgment.
19
Section 3.3. Deed in Lieu. If Servicer pursues a deed in lieu of
foreclosure pursuant to the authority granted to Servicer by the terms and
provisions of Section 3.1 above, Servicer will retain counsel to prepare
appropriate documentation, execute and deliver such documentation on behalf of
Owner and may enter into an agreement with Obligor regarding payment of any
deficiency. The actions described herein shall be taken by Servicer in
accordance with Accepted Servicing Practices or otherwise with the consent of
Owner. Title to such Property may be taken in the name of Owner or its designee.
Notwithstanding anything to the contrary contained herein, in connection with a
deed in lieu of foreclosure, in the event Servicer has reasonable cause to
believe that a Property is an Environmental Problem Property as described in
Section 4.2 hereof, Servicer shall notify Owner of the existence of the
Environmental Problem Property, describe such problem, make a recommendation to,
Owner regarding handling the Property and carry out the recommendation unless
otherwise directed by Owner in writing within five (5) days after Owner's
receipt (or deemed receipt) of such notice in accordance with the term and
provisions of Section 11.3 below. In no event will Servicer be required to
acquire record tide to an Environmental Problem Property. Servicer will provide
the services described in Section 4.1 with respect to each Property for which a
deed in lieu of foreclosure is received by Servicer.
Section 3.4. Priority; Insurance Claims. Servicer will be responsible
for retaining counsel on behalf of Owner to advise Servicer whether any proposed
relief for the Obligor pursuant to this Section 3.4 will adversely affect claims
against any other Obligor' or the priority of the lien securing the Loan.
Servicer will be responsible for determining that such relief will not adversely
affect any applicable Mortgage Insurance or other guaranty. Servicer shall
consider the effect of such relief on the priority of the lien, claim against
other Obligors and the effect on Mortgage Insurance or other guarantees in
acting hereunder.
Section 3.5. Bankruptcy of Obligor. If Servicer has actual knowledge
that an Obligor is the subject of a proceeding under the Bankruptcy Code or any
other similar law, has made an assignment for the benefit of creditors or has
had a receiver or custodian appointed for its property, Servicer shall retain an
attorney to pursue claim to payment on the Loan and foreclosure on the Property.
If the Property is acquired in an insolvency proceeding, it shall be acquired in
the name of Owner or its designee.
Section 3.6. Discounted Payoffs. In accordance with Section 3.1 and
Accepted Servicing Practices, Servicer may permit the Obligor to pay off a
Non-Performing Loan at less than its unpaid principal balance without obtaining
Owner's approval; provided that if the discounted payoff amount is less than 80%
of the market value of the Mortgaged Property (as determined by the Servicer),
then the Servicer shall notify Owner, by telecopy and telephone, of the proposed
discounted payoff. Unless the Servicer receives a written objection from Owner
within three Business Days of the notice, then Owner shall be deemed to consent
to such discounted payoff.
20
ARTICLE IV
PROPERTY MANAGEMENT AND DISPOSITION SERVICES
Section 4.1. Property Management and Disposition Responsibilities. With
respect to each REO Property made subject to this Agreement and with respect to
each Mortgaged Property that becomes an REO Property, Servicer shall, in
accordance with Accepted Servicing Practices, provide property and disposition
services with respect to such REO Property, including analysis of sale and leas'
potential of such REO Property, leasing and collection of rents, property
management (including maintenance and repairs to such REO Property to render it
leasable or salable), Escrow Account administration for payment of Escrow
Payments and property sales.
Section 4.2. Environmental Problems. If Servicer hereafter becomes
aware that a Property is an Environmental Problem Property, Servicer will notify
Owner of the existence of the Environmental Problem Property. Additionally,
Servicer shall set forth in such notice a description of such problem, an
estimate of how long the problem has existed (if known to Servicer), a
recommendation to Owner relating to the proposed action regarding the
Environmental Problem Property, and Servicer shall carry out the recommendation
set forth in such notice unless otherwise directed by Owner in writing within
five (5) days after Owner's, receipt (or deemed receipt) of such notice in
accordance with the terms and provisions of Section 11.3 below. Notwithstanding
the foregoing, Servicer shall obtain Owner's written consent to any expenditures
proposed to remediate Environmental Problem Properties or to defend any claims
associated with Environmental Problem Properties if such expenses, in the
aggregate, are expected to exceed $10,000. If Servicer has reason to believe
that a Property is an Environmental Problem Property (e.g., Servicer obtains a
broker's price opinion which reveals the potential for such problem), Servicer
will not accept a deed-in-lieu of foreclosure upon any such Property without
first obtaining a preliminary environmental investigation for the Property
satisfactory to Owner.
ARTICLE V
STANDARDS FOR CONDUCT
Section 5.1. Standards of Care and Delegation of Duties.
(a) The obligation of Servicer to perform its duties under
this Agreement, including any duty to obtain or verify information,
will be satisfied so long as Servicer acts in a manner consistent, with
Accepted Servicing Practices. Servicer shall not be responsible for the
form, substance, validity, perfection, priority, effectiveness or
enforceability of any documents in the Servicing File on the Transfer
Date or on the date that it obtains such documents from the Current
Servicer.
21
(b) In the performance of its duties and obligations under
this Agreement, Servicer may act directly or through agents,
sub-servicers, independent counsel, accountants and other independent
professional Persons, or it may delegate the performance of functions
and consult with agents, independent counsel and other independent
Persons; provided, however, that no such delegation shall relieve
Servicer from any of its obligations; hereunder. Additionally, in the
event that Servicer believes that it is unable to comply with the
requirements of Section 5.1(a) with respect to any particular Loan or
REO Property as a result of Servicer's relationship with an Obligor or
some other xxxxx which would cause Servicer to be in violation of
Accepted Servicing Practices, it may enter into a sub-servicing
agreement whereby a, sub-servicer shall perform its duties with respect
to such Loan or REO Property. In such event, so long as such
sub-servicer performs such duties on behalf of Servicer, in accordance
with the other terms and provisions of this Agreement, then Servicer
shall be deemed to be in compliance therewith.
(c) Servicer shall be entitled to rely upon any notice,
document, correspondence, request or directives received by it from
Owner that Servicer believes to be genuine and to have been signed or
presented by an authorized officer or representative of Owner, and
shall not be obligated to inquire as to the authority or power of any
Person so executing or presenting any notice, document, request or
directive or as to the truthfulness of any statements set forth
therein.
Section 5.2. Transactions with Related Persons. In carrying out -its
obligations and duties under this Agreement, Servicer may contact with its
affiliates, provided that all Persons with whom Servicer may contract, enter
into with or otherwise deal with, shall be engaged on a commercially reasonable
arm's-length basis and at competitive rates of compensation. Nothing contained
in this Agreement will prevent Servicer or its affiliates from engaging in other
businesses or from acting in a similar capacity for any other Person even though
such Person may engage in business activities similar to those of Owner or its
affiliates.
Section 5.3. Access to Records.
(a) To the extent required by this Agreement, Servicer will
establish and a system of (i) records of operational information
relating to the collection of Loans, the conduct of default management
services and the administration, management, servicing, repair,
maintenance, rental, sale or other disposition of `Loans and REO
Properties and (ii) books and accounts, which shall be maintained in
accordance with customary business practices, of financial information
relating to the Loans and the Properties. Information may be maintained
on a computer or electronic system.
(b) If Owner provides reasonable prior written notice, Owner
and its respective accountants, attorneys, agents or designees may
examine Servicer's books and records relating to the Loans and the REO
Properties during normal business hours of Servicer at Owner's expense.
Such records shall not include any proprietary or confidential
information, as reasonably determined by Servicer. Owner shall provide
to Servicer a copy of any report generated in connection with any such
examination. In addition, Servicer shall provide to Owner any other
information, related to the Loans and Properties, reasonably requested
by Owner.
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Section 5.4. Annual Audit. On or before April 30 of each year,
beginning with April 30, 2000, Servicer shall cause a firm of independent public
accountants (who may also render other services to Servicer), which is a member
of the American Institute of Certified Public Accountants, to furnish a
statement to Owner, and to Servicer, to the effect that such firm has examined
certain documents and records for the preceding calendar year (or during the
period from the date of commencement of Servicer's duties hereunder until the
end of such preceding calendar year in the case of the first such certificate)
and that, on the basis of such examination conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers, such firm is
of the opinion that Servicer's overall servicing operations have been conducted
in compliance with the Uniform Single Attestation Program for Mortgage Bankers
except for such exceptions that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers requires it to report, in which case
such exceptions shall be set forth in such statement.
ARTICLE VI
BILLING OF AND REPORTS TO OWNER
Section 6.1. Property Protection Expenses and Property Improvement
Expenses. To the extent no funds remain on deposit in the Escrow Account to pay
Property Protection Expenses and/or Property Improvement Expenses, Servicer
shall advance such amounts; provided, however, that Servicer shall not be
obligated to make any advance if Servicer determines in its reasonable judgment
that such advance will be a Non-Recoverable Advance. Any advances made towards
Property Protection Expenses and/or Property Improvement Expenses shall be
deemed to be Servicing Advances. As provided in Section 6.2, Servicer shall be
entitled to reimbursement of all such Servicing Advances made pursuant to this
Section 6.1 from all collections on the related Loan that are subsequently
deposited in the Collection Account. To the extent that Servicer has previously
withdrawn funds from the Collection Account funds to pay for third party costs
relating to loan modifications and Servicer thereafter recovers cash from the
Obligor for such amounts, Servicer shall deposit such recovered cash into the
Collection Account.
Section 6.2. Remittances and Monthly Report. Two (2) Business Days
prior to each Distribution Date, Servicer shall submit a Monthly Report by means
of hard copy and computer diskette substantially in the form set forth on
Exhibit A hereto (or in such other form and manner as may be hereafter mutually
agreed upon by Owner and Servicer), showing all collections of interest and
principal (from whatever source) on the Loans and all collections in respect of
the REO Properties (including sale proceeds and rental payments) during the
related Collection Period as well as the amounts, and a detailed description of
all Servicing Advances incurred during the related Collection Period and all
distributions from the Collection Account since the preceding Distribution Date.
On each Distribution Date Servicer shall withdraw the Monthly Collection Amount
from the Collection Account and distribute the amount withdrawn in the following
priority:
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(a) to refund to any Obligor any funds determined to be in
excess of the amounts required under the terms of the related Loan
Documents;
(b) to the Owner, (i) all payments on account of principal on
the Mortgage Loans or REO Properties, including all principal
prepayments and (ii) all payments on account of interest on the
Mortgage Loans adjusted to the Mortgage Loan Remittance Rate; provided,
however, that. upon liquidation of a Loan, any amounts due to Servicer
pursuant to subsection (d) below with respect to such Loan shall be
paid prior to any amounts due pursuant to this subsection (b);
(c) to pay itself all Ancillary Income collected during the
related Collection Period;
(d) to reimburse itself for unpaid Servicing Fees and
unreimbursed Servicing Advances; provided, that Servicer's right to
reimburse itself pursuant to this subclause (d) with, respect to any
Loan or REO Property (i) is limited to related Liquidation Proceeds,
condemnation proceeds, insurance proceeds and such other amounts as may
be collected by Servicer from the Obligor or otherwise relating to the
Loan or REO Property, and (ii) if, after Disposition of such Loan or
REO Property, such amounts are insufficient to satisfy such unpaid or
unreimbursed amounts, then Servicer may seek reimbursement from Owner
(as set forth in Section 6.4 below), it being understood that, in the
case of such reimbursement from the Collection Account, Servicer's
right thereto shall be prior to the rights of Owner.
Amounts payable to Owner shall be paid by wire transfer in immediately available
funds (by 4:00 p.m., eastern time on the day of transfer) to an account
designated by Owner.
With respect to any remittance sent by Servicer after the second
Business Day following the Business Day on which such payment was due, Servicer
shall pay to the Owner interest on any such late payment at an annual rate equal
to the rate of interest as is publicly announced from time to time by Citibank,
N.A., New York, New York, or its successor as its prime lending rate, plus 30/c,
adjusted as of the date of each change, but in no event greater than the amount
permitted by applicable law ("Default Rate"). Such interest shall be paid by
Servicer to the Owner on the date such late payment is made and shall cover the
period commencing with and including the Business Day on which such payment was
due and ending with but excluding the Business Day on which such payment is
made. Such interest shall be remitted along with such late payment The payment
by Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Servicer Event of Default.
Section 6.3. Remittance Upon Termination.
Upon the termination of this Agreement, Servicer shall withdraw all
funds from the Collection Account and shall distribute them as follows:
(a) to refund to any Obligor any funds determined to be in
excess of the amounts required under the terms of the related Loan
Documents;
(b) to Owner, and
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(c) to reimburse itself for all unpaid Servicing Fees and
Servicing Advances.
Amounts payable to Owner shall be paid by wire transfer in immediately available
funds (by 4:00 p.m., eastern time on the day of transfer) to an account
designated by Owner.
Section 6.4. Billing. Servicer shall submit monthly invoices to Owner
for any expenses incurred by Servicer pursuant to Sections 2.1(a), 2.1(c),
2.3G), 6.5, 11.1 and for any Setup Fees and Setup Expenses. Moreover, upon
Disposition of a Loan or REO Property, if the related Liquidation Proceeds,
insurance proceeds, condemnation proceeds and other amounts collected from the
Obligor or otherwise with respect to the Loan are insufficient to pay or
reimburse Servicer for any of the items payable to Servicer in Section 6.2(d),
or if funds in the Collection Account upon the termination of this Agreement are
insufficient to reimburse Servicer for any items in Section 6.3(c), Servicer
shall submit an invoice for any such amount that remains outstanding. Owner
shall remit to Servicer in immediately available funds all amounts reflected on
any invoice within five (5) days after the date Servicer sends such notice to
Owner. If Owner fails to pay any amount invoiced within ten (10) days of receipt
of the invoice, then Owner shall pay Servicer interest on such late payment at
the Default Rate. Such interest shall be paid by Owner to Servicer on the date
such late payment is made and shall cover the period commencing with and
including the Business Day on which such payment was due and ending with but
excluding the Business Day on which such payment is made. Such interest shall be
remitted along with such late payment. The payment by Owner of any such interest
shall not be deemed an extension of time for payment On any Distribution Date,
if any payment owed under this Section 6.4 is more than thirty (30) days past
due, Servicer is entitled to withdraw the amount owing from the Collection
Account and to pay itself such amount prior to making any payments to Owner
pursuant to Section 6.2. The obligation of Owner to pay amounts billed by
Servicer shall survive any termination of this Agreement.
Section 6.5. Missing Document Report. In addition to the Monthly
Report, Servicer shall provide to Owner a report (the "Missing Document Report")
with respect to a Loan within forty-five (45) days after -the related Transfer
Date, which Missing Document Report shall include a listing (to Servicer's
current, actual knowledge) with respect to each Loan and REO Property of all
missing documents reasonably necessary to service such Loan or REO Property. For
the purposes of this Section 6.5, the phrase "to Servicer's current, actual
knowledge" shall mean that Servicer shall be responsible for examining the
Servicing File presented to Servicer by Owner or the Current Servicer and
verifying that each such Servicing File contains Loan Documents customary for
the type of Loan; Servicer shall have no responsibility for determining whether
there are particular missing documents if the documents presented to Servicer do
not disclose the existence of such missing document. Owner shall cure, or shall
cause the Current Servicer to cure, any such deficiencies as soon as reasonably
possible following receipt of the Missing Document Report. After Servicer has
delivered to Owner the notice referred to in this Section 6.5, regarding missing
documents, Servicer shall not be responsible for any failure to perform any
action related to such Loan to the extent Servicer is impaired by the absence of
such material document(s). Moreover, if Owner has not cured any document
deficiency within 30 days following receipt of the Missing Document Report, and
such document is reasonably necessary to service such Loan or REO Property, then
Servicer may, but is not obligated to, cure such deficiency. All out-of-pocket
expenses incurred by Servicer in connection with such cure shall be billed to,
and paid by, Owner pursuant to Section 6.4.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties of Servicer. Servicer, as a
condition to the consummation of the transactions contemplated hereby, hereby
makes the following representations and warranties to Owner as of the initial
Transfer Date and each subsequent Transfer Date:
(a) Organization and Good Standing; Licensing. Servicer is a
federal savings association duly organized, validly existing and in
good standing under the laws of-the United States of America and has
the power and, authority to own its assets and to transact the business
in which it is currently engaged. Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned, or leased or serviced by it requires such
qualification (except where there is an appropriate statutory exemption
applicable to Servicer or the failure so to qualify would not have a
material adverse effect on the business, properties, assets or,
financial condition of Servicer).
(b) Authorization: Binding Obligations. Servicer has the power
and authority to make, execute, deliver and perform this Agreement,
including all instruments of transfer to be delivered pursuant to -this
Agreement, and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of Servicer enforceable against
it in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies.
(c) No Consent Required. Servicer is not required to obtain
the consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made or as to which the
failure to obtain or make will not materially adversely affect the
ability of Servicer to perform its obligations hereunder.
(d) No Violations. The execution, delivery and performance of
this Agreement by Servicer will not violate any provision of any
existing law or regulation or any order or decree of any court
applicable to Servicer, except for violations that will not adversely
affect Servicer's ability to perform its obligations hereunder, or the
charter or by-laws of Servicer, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Servicer is a
party or by which Servicer may be bound.
(e) Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending
or to the knowledge of Servicer threatened, against Servicer or any of
its properties or with respect to this Agreement, which if adversely
determined, would have a material adverse effect on the transactions
contemplated by this Agreement.
26
(f) HUD Approved. Servicer is a mortgagee approved by HUD for
servicing pursuant to 24 CFR ss. 202.18. No event has occurred that,
with notice to HUD, would result in a breach of the representation made
in the preceding sentence.
(g) FNMA or FHLMC Approved. Servicer is an approved
seller/servicer for FNMA or FHLMC in good standing. No event has
occurred that would make Servicer unable to comply with FNMA or FHLMC
eligibility requirements, would require notification to FNMA or FHLMC,
or, with notification to FNMA or FHLMC, would result in a breach of the
representation made in the preceding sentence.
Section 7.2. Representations and Warranties of Owner. Owner, as a
condition to the consummation of the transactions contemplated hereby, hereby
makes the following representations and warranties to Servicer as of the initial
Transfer Date and each subsequent Transfer Date:
(a) Organization and Good Standing; Licensing. Owner is a
corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has the power and authority to
own its assets and to transact the business in which it is currently
engaged. Owner is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or
leased by it requires such qualification (except where there is an
appropriate statutory exemption applicable to Owner or the failure so
to qualify would not have a material adverse effect on the business,
properties, assets or condition (financial or otherwise) of Owner).
(b) Authorization: Binding Obligations. Owner has the power
and authority to make, execute, deliver and perform this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) and perform all of the transactions contemplated to be
performed by it under this Agreement, and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will constitute
the legal, valid and binding obligation of Owner enforceable in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies.
(c) No Consent Required. Owner is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, except such as have been obtained or made.
(d) No Violations. The execution, delivery and performance of
this Agreement by Owner will not violate any provision of any existing
law or regulation or any order or decree of any court applicable to
Owner or the articles or by4aws of Owner, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which
Owner is a party or by which Owner may be bound.
27
(e) Litigation. No litigation or administrative proceeding of
or before any court, tribunal or governmental body is currently pending
or to the knowledge of Owner threatened, against Owner or any of its
properties or with respect to this Agreement, which if adversely
determined would have a material adverse effect on the transactions
contemplated by this Agreement.
(f) Holder of Notes. The Owner is the owner and holder of the
notes evidencing the debt under the Mortgage Loans (with each note
either endorsed in blank or endorsed to Owner), and is the beneficiary
or mortgagee of record of the mortgage or deed of trust securing such
Mortgage Loans.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. Liabilities to Obligors. No liability to any Obligor under
any of the Loans or Properties arising out of any act or omission to act of any
servicer, sub-servicer, owner, holder or originator of the Loans or Properties
prior to the Transfer Date is assumed by Servicer under or as a result of this
Agreement and the transactions contemplated hereby and, to the extent permitted
and valid under mandatory provisions of law, Servicer expressly disclaims such
assumption.
Section 8.2. Servicer's Indemnity of Owner. Servicer shall defend and
indemnify of Owner against any and all claims, losses, damages, liabilities,
judgments, penalties, fines, forfeitures, reasonable legal fees and expenses,
and any and all related costs and/or expenses of litigation, administrative
and/or regulatory agency proceedings, and any other costs, fees and expenses,
suffered or incurred by Owner (each, a "Liability') arising out of or resulting
from third party claims or actions that were caused directly by or directly
resulted from a breach of any of Servicer's representations and warranties
contained in this Agreement or the failure of Servicer to perform its duties in
accordance with the terms of this Agreement or Accepted Servicing Practices.
Servicer shall not be liable to Owner, however, with respect to action taken, or
for refraining from taking any action, with respect to any Loan or REO Property
at or in conformity with the direction of Owner (for this purpose, the terms of
this Agreement are directions of Owner), or for any Liability caused by or
resulting from a delay occasioned by Owner's objection to a proposal by Servicer
hereunder, or for any Liability caused by or resulting from Owner's breach of a
representation or warranty herein or for any Liability incurred by xxxxx of
Owner's willful misfeasance, bad faith or negligence in acting or refraining
from acting. In any event, Servicer shall not have any liability or obligations
for any actions of any prior servicer, sub-servicer, originator, holder or
owner, or any successor servicer, of the Loans or Properties.
Section 8.3. Owner's Indemnity of Servicer; Limitation on Liability of
Servicer.
(a) Owner shall defend and indemnify Servicer against any
Liability arising from (i) third party claim or actions that were
caused by or resulted from (A) any actions or omissions in respect of
any Loan or REO Property of any prior servicer, sub-servicer, owner or
originator of a Loan or REO Property, and/or (B) taking any action, or
refraining from taking any action, with respect to any Loan or REO
Property at or in conformity with this Agreement or the direction of
Owner, and/or (ii) any Environmental Liability (as defined in Section
8.3(c) below), (iii) any breach by Owner or Owner's directors,
officers, employees, agents, invitees or representatives of Owner's
obligations under Section 8.3(d) below, and (iv) any Liability relating
to the failure or refusal of Owner or any trustee or custodian in
possession of original Loan Documents to timely provide to Servicer the
originals of any Loan Documents in order to allow Servicer sufficient
time to timely process satisfactions, payoffs and releases.
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(b) Neither Servicer nor any directors, officers, employees or
agents of Servicer shall be liable to Owner for any action taken or for
refraining from taking any action in good faith pursuant to this
Agreement or for errors in judgment; provided, however, that this
provision shall not protect Servicer against any liability directly and
solely caused by Servicer that would otherwise be imposed by reason of
Servicer's willful misfeasance or bad faith in the performance of or
failure to perform duties hereunder. Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted to
Servicer respecting any matters arising hereunder and shall not be
liable for taking any action or refraining from taking any action in
good faith reliance thereon, pursuant to this Agreement.
(c) The term "Environmental Liability" shall mean any and all
claims, losses, damages, liabilities, judgments, penalties, fines,
forfeitures, reasonable legal fees and expenses, and any and all
related costs and/or expenses of litigation, administrative and/or
regulatory agency proceedings, and any other costs, fees and expenses,
suffered or incurred by Servicer arising out of or resulting from the
introduction of such materials on any Property before and/or after the
date hereof, including, without limitation, (a) any liability under or
on account of the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., as the same may be
amended from time to time, and/or any other federal or state
environmental laws, and specifically including, without limitation, any
liability relating to asbestos and asbestos containing materials,
polychlorinated biphenyls, radon gas, petroleum and petroleum products,
urea formaldehyde and any substances classified as being "in
inventory", "usable work in process" or similar classification which
would, if classified as unusable, be included in the foregoing
definition, including the assertion of any lien thereunder, (b) claims
brought by third parties for loss or damage incurred or sustained
subsequent to the date hereof, and (c) liability with respect to any
other matter affecting the Property within the jurisdiction of the
federal Environmental Protection Agency or state environmental
regulatory agencies pursuant to any state laws, and in the regulations
adopted pursuant to any of said laws; provided, however, that the
indemnity for Environmental Liability shall not be effective with
respect to any liability directly and solely caused by Servicer that
would otherwise be imposed by reason of Servicer's willful misfeasance
or bad faith in the performance of or failure to perform duties
hereunder.
29
(d) It is understood and agreed that during the term of this
Agreement Owner may have access to certain of Servicer's confidential
and proprietary information including, without limitation, Servicer's
computer systems and models, secure web site, investor reporting
systems, default management -systems and procedures, and other
proprietary systems and procedures (the "Confidential Information").
The term "Confidential Information" does not include information which
becomes generally available to the public other than as a result of
disclosure by Owner or its representatives, but shall be deemed to
include the Setup Fee and the Servicing Fees contained herein and any
passwords or identification codes, access codes, modem dial-up numbers
and similar items. The Owner shall keep confidential and shall not
divulge to any party other than an officer or employee of Owner who has
a need-to know, without Servicer's prior written consent, any
Confidential Information. Additionally, Owner shall only permit its
officers and employees to perform procedures on Servicer's system which
are specifically authorized by Servicer. The Confidential Information
shall not be used or duplicated by Owner for any purpose other than
those purposes specified by Servicer. Owner further agrees that the
Confidential Information will not be used by it or its directors,
officers, employees, invitees, agents or representatives, including,
but not limited to outside counsel, in any way detrimental to Servicer,
as determined in the reasonable judgment of Servicer. In the event that
Owner is requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative
demand or similar process) to disclose any Confidential Information, it
is agreed that Owner will provide Servicer with prompt notice of such
request(s) so that Servicer may seek an appropriate protective order
and/or waive compliance with the provisions of this subsection, in
Servicer's sole and absolute discretion. Owner acknowledges that
Servicer will incur irreparable damage if Owner should breach the terms
and provisions of this subsection. Accordingly, if Owner or Owner's
directors, officers, employees, invitees, agents or representatives
breaches or threatens to breach any of the provisions of this
subsection, Servicer shall be entitled, without prejudice, to all the
rights and remedies available to it, including a temporary restraining
order and an injunction restraining any breach of the provisions of
this subsection (without any bond or other security being required
therefor).
Section 8.4. Indemnification Procedures. If, for so long as this
Agreement is in effect, a party entitled to indemnification hereunder
("Indemnified Party") has actual notice or knowledge of any claim or loss for
which on by an indemnifying party hereunder ("Indemnifying Party") is asserted,
the Indemnified Party shall give to the Indemnifying Party written notice within
such time as is reasonable under the circumstances, describing such claim or
loss in reasonable detail. In the event that a demand or claim for
indemnification is made hereunder with respect to losses the amount or extent of
which is not yet known or certain, the notice of demand for indemnification
shall so state, and, where practicable, shall include an estimate of the amount
of the losses.
(a) Unless applicable law mandates a cure within a shorter
period of time, the Indemnifying Party shall have 30 calendar days from
the date of receipt by Indemnifying Party of written notice of a breach
of the Indemnifying Party's representations within, which to cure such
breach, or if such breach cannot be cured within 30 days but
Indemnifying Party has commenced efforts to cure, then the Indemnifying
Party shall have 60 calendar days from the date of such notice to cure
such breach. In the event a breach is cured by the Indemnifying Party,
the Indemnifying Party shall execute a written acknowledgment of the
cure in such form as is approved or provided by the Indemnified Party.
30
(b) In the case of actual notice of indemnification hereunder
involving any litigation, arbitration or legal proceeding, the
Indemnifying Party shall have responsibility to, and shall employ
counsel acceptable to the Indemnified Party, and shall assume all
expense with respect to, the defense or settlement or such claim;
provided however, that:
(i) the Indemnified Party shall be entitled to
participate in the defense of such claim and
to employ counsel at its own expense to
assist in the handling of such claim; and
(ii) the Indemnifying Party shall obtain the
prior written approval of the Indemnified
Party before entering into any settlement of
such claim or ceasing to defend against such
claim if, pursuant to or as a result of such
settlement or cessation, (1) injunctive or
other relief (excepting the payment of money
damages) would be imposed against any
Indemnified Party which could materially
interfere with the business, operations,
assets, conditions (financial or otherwise)
or prospects of the Indemnified Party, or
(2) the settlement or cessation shall result
in an indemnification obligation of the
Indemnifying Party that, in the reasonable
judgment of the Indemnified Party, cannot be
fulfilled by the Indemnifying Party in
accordance with the terms of this Agreement.
If the Indemnifying Party does not provide
to the Indemnified Party, within fifteen
(15) days after receipt of a notice of
indemnification, a written acknowledgment
that the Indemnifying Party shall assume
responsibility for the defense or settlement
of such claim as provided in this Section
8.4, the Indemnified Party shall have the
right to defend and settle the claim in such
manner as it may deem appropriate at the
cost and expense of the Indemnifying Party,
and the Indemnifying Party shall promptly
reimburse the Indemnified Party therefor, in
accordance with this Agreement.
Section 8.5. Operation of Indemnities. If any Person has made any
indemnity payments to any other Person pursuant to this Article VII and such
other Person thereafter collects any of such amounts from others, such other
Person will repay such amounts collected, together with any interest collected
thereon. The provisions of this Article VIII shall survive any termination of
this Agreement, the liquidation of any Loan, or the transfer or assignment by
Owner to another Person of any Loan or REO Property or any interest in any Loan
or REO Property or the transfer of the servicing to a successor servicer as long
as the action giving rise to the indemnification shall have occurred during the
period when the Servicer was servicing the related Loan or REO Property.
ARTICLE IX
DEFAULT
Section 9.1. Events of Default. The following shall constitute
"Servicer Events of Default" hereunder by Servicer:
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(a) any failure by Servicer to make any deposit or payment, or
to remit any payment, required to be made under the terms of this
Agreement which continues unremedied for a period of three (3) Business
Days after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to Servicer by
Owner-, or
(b) failure on the part of Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the
part of Servicer set forth in this Agreement which continues unremedied
for a period of thirty (30) days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been
given to Servicer by Owner; or
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against Servicer
and such decree or order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; or
(d) Servicer shall consent to the appointment of a trustee,
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to Servicer or of or relating to all or substantially all
of the property of Servicer, or
(e) 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 or take any action in furtherance of the
foregoing; or
(f) Servicer assigns or attempts to assign its rights, to the
servicing compensation hereunder or attempts to assign this Agreement
or the servicing responsibilities hereunder without the consent of
Owner except as otherwise expressly permitted by the other terms and
provisions of this Agreement; or
(g) to the extent that Servicer is required to maintain a
license, failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction where a
Mortgaged Property is located, to the extent that the failure would
have a material adverse effect on the Servicer's performance of its
obligations hereunder or the enforceability of any Loan; or
(h) Servicer is neither an approved seller/servicer for FNMA
nor for FHLMC; or
(i) the net worth of the Servicer shall be less than
$25,000,000.
32
Section 9.2. Effect of Transfer. After the effective date of the
termination of servicing duties pursuant to Section 9.1, Section 10.1 or Section
10.3, Servicer shall have no further obligations hereunder other than under
Article VIII or Article X.
ARTICLE X
TERM
Section 10.1. Term of Agreement.
(a) This Agreement shall terminate upon the distribution of
the final payment or Liquidation Proceeds on the last Loan or REO
Property subject to this Agreement.
(b) If Servicer fails to perform any of its obligations which
would result, after expiration of the applicable notice and cure or
grace period (if applicable), in a Servicer Event of Default hereunder,
Owner may terminate this Agreement by written notice to Servicer,
specifying the effective date of such termination and instructions with
respect to the Servicing Files and Loan Documents. Servicer shall do
all things necessary or appropriate to effect the purposes of such
termination and the transfer of servicing, and Servicer shall pay all
costs and expenses related to the transfer of servicing. On or after
the receipt by Servicer of such written notice, all authority and power
of Servicer under this Agreement, whether with respect to the Loans or
Properties shall terminate effective as of the date specified in such
written notice. If Servicer fails to perform any of its obligations
which would result, after expiration of the applicable notice and cure
or grace period (if applicable), in a Servicer Event of Default
hereunder, Owner may also pursue whatever rights it may have at law or
in equity to damages, including injunctive relief and specific
performance.
(c) Owner may, at its sole option, terminate any rights the
Servicer may have hereunder with respect to one or more of the Loans,
without cause, upon 30 days prior written notice. In the event of a
termination pursuant to this Section 10.1, Owner shall pay to the
Servicer a sum, as liquidated damages, equal to the product of (a) two,
(b) the servicing fee rate, and (c) the aggregate unpaid principal
balance of the Loans for which this Agreement is going to be terminated
as of the last day of the month following receipt of such notice of
termination.
(d) Servicer may, at its sole option and without cause,
terminate this Agreement with respect to the Loans and REO Properties
being serviced hereunder, on or after the date occurring nine months
after the first date above written upon the sending of 180 days'
written notice to Owner.
Section 10.2. Transfers of Servicing. Servicer shall not pledge or
assign this Agreement or its rights to the Servicing Fee or transfer the
servicing hereunder or delegate its rights or duties hereunder without the prior
written approval of Owner.
Section 10.3. Servicer Not to Resign. Servicer shall not resign from
the obligations and duties imposed on Servicer by this Agreement, except (i) as
set forth in Xxxxxxx 00. 0 xxxxx, (xx) by mutual consent of Servicer and Owner,
or (iii) upon the determination that Servicer's duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by
Servicer. Any determination under clause (iii) above shall be evidenced by an
opinion of counsel to such effect delivered to Owner in form and substance
reasonably acceptable to, Owner. No resignation shall become effective until
Owner or its designee shall have assumed Servicer's responsibilities and
obligations hereunder.
33
Section 10.4. Successor Servicer. If any successor servicer succeeds to
the obligations of Servicer after a termination pursuant to Sections 10.1 or
10.3 above, the successor servicer, to the extent necessary to permit the
successor servicer to carry out the provisions of the terms hereof and without
act or deed on the part of the successor servicer, shall succeed to all of the
rights and obligations of Servicer under any sub-servicing agreement entered
into pursuant to Section 5.1(b). In such event, the successor servicer shall be
deemed to have assumed all of Servicer's interest therein and to have replaced
Servicer as a party to such sub-servicing agreement to the same extent as if
such sub-servicing agreement had been assigned to the successor servicer, except
that Servicer, as applicable, shall not have any liability or obligation under
such sub-servicing agreement in respect of events that occur after such
succession unless so provided in such sub-servicing agreement or unless such
events arise out of actions or events that occurred prior to such succession. In
the event that the successor servicer assumes the servicing obligations of
Servicer, upon request of the successor servicer, Servicer, shall at its own
expense (if the transfer of servicing is occasioned by a Servicer Event of
Default) or at Owner's expense (if the transfer is occasioned by any reason
other than a Servicer Event of Default) deliver to the successor servicer (as
the case may be) all documents and records relating to any sub-servicing
agreement and the Loans then being serviced thereunder and an accounting of
amounts collected and held by it, if any, and will otherwise use its best
efforts to effect the orderly and efficient transfer of any sub-servicing
agreement to the successor servicer.
ARTICLE XI
RECONSTITUTION
Section 11.1. Reconstitution.
(a) Servicer and Owner agree that with respect to some or all
of the Loans, Owner may effect one or more Whole Loan Transfers, one or
more Agency Transfers and/or one- or more Pass-Through Transfers. With
respect to each Whole Loan Transfer, Agency Transfer or Pass-Through
Transfer, as the case may be, entered into by Owner, Servicer agrees:
(1) to cooperate fully with Owner and any
prospective purchaser with respect to all
reasonable requests and due diligence
procedures including participating in
meetings with rating agencies, bond insurers
and such other parties as Owner shall
designate and participating in meetings with
prospective purchasers of the Loans or
interests therein and providing information
reasonably requested by such purchasers;
(2) to execute all Reconstitution Agreements
provided that each of Servicer and Owner is
given an opportunity to review and
reasonably negotiate in good faith the
content of such documents not specifically
referenced or provided for herein;
34
(3) to deliver to Owner for inclusion in any
prospectus or other offering material such
publicly available information regarding
Servicer, its Loan delinquency, foreclosure
and loss experience and any additional
information reasonably requested by Owner,
and to deliver to Owner;
(4) to deliver to Owner and to any Person
designated by Owner, at Owner's expense,
such statements and audit letters of
reputable, certified public accountants
pertaining to information provided by
Servicer pursuant to clause 3 above as shall
be reasonably requested by Owner,
(5) to deliver to Owner, and to any Person
designated by Owner, such legal documents
and in-house Opinions of Counsel as are
customarily delivered by originators or
servicers, as the case may be, and
reasonably determined by Owner to be
necessary in connection with Whole Loan
Transfers, Agency Transfers or Pass-Through
Transfers;
(6) to cooperate fully with Owner and any
prospective purchaser with respect to the
preparation (including, but not limited to,
the endorsement, delivery, assignment, and
execution) of Loan Documents and other
related documents, with respect to servicing
requirements reasonably requested by the
rating agencies and credit enhancers;
(7) to negotiate and execute one or more
subservicing agreements between Servicer and
any master servicer which is generally
considered to be a prudent master servicer
in the secondary mortgage market, designated
by Owner in its sole discretion after
consultation with Servicer and/or one or
more custodial and servicing agreements
among Owner, Servicer and a thud party
custodian/trustee which is generally
considered to be a prudent custodian/trustee
in the secondary mortgage market designated
by Owner in its sole discretion after
consultation with Servicer, in either case
for the purpose of pooling the Loans with
other Loans for resale or securitization;
and
(8) in connection with any securitization of any
Loans, to execute a pooling and, servicing
agreement, which pooling and servicing
agreement may, at Owner's direction, contain
contractual provisions including, but not
limited to, a customary certificate payment
delays, servicer advances of delinquent
scheduled, payments of principal and
interest through liquidation (unless deemed
non-recoverable) and prepayment interest
shortfalls (to the extent of the monthly
servicing fee payable thereto), servicing
representations and warranties which in form
and substance conform to the representations
and warranties in this Agreement and to
secondary market standards for securities
backed by Loans similar to the Loans and
such provisions with regard to servicing
responsibilities, investor reporting,
segregation and deposit of principal and
interest payments, custody of the Loans, and
other covenants as are required by Owner and
one or more nationally recognized rating
agencies which are "mortgage related
securities" for the purposes of the
Secondary Mortgage Market Enhancement Act of
1984, unless otherwise mutually agreed. If
Owner deems it advisable at any time to pool
the Loans with other Loans for the purpose
of resale or securitization, Servicer agrees
to execute one or more subservicing
agreements between itself (as servicer) and
a master servicer designated by Owner at its
sole discretion, and/or one or more
servicing agreements among Servicer (as
servicer), Owner and a trustee designated by
Owner at its sole discretion, such
agreements in each case incorporating terms
and provisions substantially identical to
those described in the immediately preceding
paragraph.
35
Any and all reasonable costs, fees and expenses incurred by Servicer in
connection with the foregoing shall be reimbursed by Owner after receipt of an
invoice therefor in accordance with Section 6.4; provided that Servicer shall
not be entitled to reimbursement for the fees of Servicer's own legal counsel in
connection with the foregoing. All Loans not sold or transferred pursuant to a
Whole Loan Transfer, Agency Transfer or Pass-Through Transfer shall be subject
to this Agreement and shall continue to be serviced for the remainder of the
Preliminary Servicing Period in accordance with the terms of this Agreement and
with respect thereto this Agreement shall remain in full force and effect.
(b) Notwithstanding anything contained herein to the contrary,
in connection with (a) a Pass-Through Transfer, or (b) an Agency
Transfer, or (c) a Whole Loan Transfer, Servicer shall deposit in the
Collection Account within one Business Day of receipt, and retain
therein with respect to each principal prepayment in full, the
Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from Servicer's own funds,
without reimbursement therefor up to a maximum amount per month of the
Servicing Fee actually received for such month for the Loans.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Successors and Assigns: No Third Beneficiaries. This
Agreement will inure to the benefit of and- be binding upon the parties hereto
and their successors and assigns. This Agreement is not intended to confer on
any person other than the parties hereto and their successors and assigns any
rights, obligations, remedies or liabilities.
Section 12.2. Choice of Law. This Agreement is made under and shall be
governed by and construed under the laws of Florida.
Section 12.3. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given and received: (a) upon receipt if
delivered personally (unless subject to clause (b)) or if mailed by registered
or certified mail return receipt requested, postage prepaid; (b) at 5:00 p.m.
local time on the business day after dispatch if sent by a nationally recognized
overnight courier, or (c) upon the completion of transmission (which is
confirmed by telephone or by a statement generated by the transmitting machine)
if transmitted by telecopy or other means of facsimile which provides immediate
or near immediate transmission to compatible equipment in the possession of the
recipient in any case to the parties at the following addresses or telecopy
numbers (or at such other address or telecopy number for a party as will be
specified by like notice):
36
if to Servicer:
Ocwen Federal Bank FSB
The Forum, Suite 1002
0000 Xxxx Xxxxx Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, XX 00000
Attention: Secretary
Facsimile Number: (000) 000-0000
Confirmation Number: (000) 000-0000
If to Owner:
Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
3 World Financial Center, 8th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager, Contract Finance
Facsimile Number: (000) 000-0000
Confirmation Number: (000)000-0000
Any change of address must be in writing.
Section 12.4. Entire Agreement; Amendments; Waivers. This Agreement
constitutes the entire agreement between the parties with respect to the
transactions contemplated hereby and supersedes all prior agreements (or
contemporaneous oral agreements) of the parties with respect thereto. This
Agreement may be amended only in writing signed by the party against whom such
amendment is sought to be enforced. Each of Servicer or Owner may, by written
notice to the other, extend the time for or waive the performance of any of the
obligations of such other hereunder. The waiver by any party hereto of a breach
of this Agreement shall not operate or be construed as a waiver of any other or
subsequent breach. No delay, omission or act by a party shall be deemed a waiver
of such party's rights, powers or remedies. No course of dealing between the
parties hereto shall operate as a waiver of any provision hereof.
Section 12.5. No Joint Venture; Limited A&M. The services provided by
Servicer are in each case those of an independent contractor providing a
service. Nothing contained in this Agreement: (i) shall constitute Servicer and
Owner as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity; (ii) shall be construed to
impose any liability as such on Servicer or Owner or (iii) shall, except as
otherwise expressly provided in this Agreement as to Servicer, constitute a
general or limited agency or be deemed to confer on it any express, implied or
apparent authority to incur any obligation or liability on behalf of the other.
Section 12.6. Severabilily; Interpretation. If any provision hereof is
invalid, illegal or unenforceable, the remaining provisions shall not be
affected or impaired thereby. No provision of this Agreement -shall be construed
against or interpreted to the disadvantage of any party hereto by any court or
other authority by reason of such party having or being deemed to have
structured, dictated or drafted such provision. The parties hereto acknowledge.
that no other agreement entered into by Servicer for the provision of servicing,
default management services and property management and disposition services
shall be used or referred to in construing the provisions of this Agreement.
37
Section 12.7. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
Section 12.8. Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.9. Limitation of Damages. NOTWITHSTANDING ANYTHING CONTAINED
HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER
IN CONTRACT, TORT (INCLUDING' NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER
LEGAL OR EQUITABLE PRINCIPLE.
38
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto effective as of the date first written above.
OWNER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
SERVICER:
OCWEN FEDERAL BANK FSB
By: /s/ Xxxxxxx X.X. Xxxxxxx
---------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title: Senior Vice President
39
EXHIBIT A
MONTHLY REPORT
Exhibit A - Page 1
Report Legend
I. Remittance Summary
- distribution of all funds received for the referenced remittance
period
2. Portfolio Summary
- various portfolio statistics
3. Trial Balance Summary (detail - trial balance)
- standard balance -information
4. Cash Collections Summary (detail - cash collections)
- cash collection summarized by transaction code and category
5. Non-Cash Summary (detail - noncash)
- non-cash transactions by category
6. Other Advance Summary (detail - other. advances)
- disbursements of various collection expenses
7. Escrow Advance Summary (detail - escrow advances)
- net disbursements of escrow for which servicer has advanced
funds
8. Payoff Detail
- cash and non-cash collections on paid off loans
9. REO Transfer Detail
- loam transferred to REO
10. Delinquency Summary
- delinquency stratification
11. ARM Detail (detail only - arm)
- ARM data
12. Property Detail (detail only - property)
- property information data
13. Status Detail (detail only - status)
- loan status information data
Exhibit A - Page 2
EXHIBIT B
SERVICING FILE
1. Copy of Note and any riders executed in connection with such Note.
2. Copy of Mortgage or Deed of trust
3. Copy of Mortgagee's Title Policy or Attorney's Title Opinion.
4. Copy of Assignment in blank of the mortgage or deed of tug.
5. Hazard insurance policy.
6. Copy of Mortgage insurance or guaranty agreement, if applicable.
7. Copy of Deed with respect to any REO Property.
8. Any correspondence by and between the Current Servicer and the Obligor.
9. Any broker's price opinion and/or any appraisal relating to the
Property..
10. Original of the tax service contract, if any.
11. Originals of all RESPA and TILA disclosure statements executed by the
Obligor.
12. Settlement Statement
13. Loan Application and credit reports, verification of employment, tax
returns.
14. Documentation relating to any release of collateral.
Exhibit B - Page 1
EXHIBIT C
ACKNOWLEDGMENT AGREEMENT
On this ___ day of _____________, 199_, Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc. (the "Sellee) as the Owner under that certain
Residential Flow Servicing Agreement dated as of August 1, 1999, (the
"Agreement"), does hereby transfer to Ocwen Federal Bank FSB (the -Purchaser-)
as Servicer under the Agreement, the Servicing Rights and servicing
responsibilities related to the Loans listed on the Mortgage Loan Schedule
attached hereto (the "Related Loans') in exchange for the Purchase Price. `The
Purchase Price shall equal the following:
The Purchaser hereby accepts the Servicing Rights and servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Related Loans all in accordance with the
Agreement. The contents of each Servicing File required to be delivered to
service the Loans pursuant to the Agreement have been or shall be delivered to
the Purchaser by the Seller in accordance with the term of the Agreement.
With respect to the Related Loans, the Cut-off Date is ______________,
the Closing Date is ______________, and the Transfer Date is ____________. The
following fees shall apply to the Related Loans:
Servicing Fee:
Setup Fee:
All other terms and conditions of this transaction shall be governed by
the Agreement. Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement. This Acknowledgment Agreement may
be executed simultaneously in any number of counterparts. Each counterpart shall
be deemed to be an original, and all such counterparts shall constitute one and
the same instrument.
Exhibit C - Page 1
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
SELLER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
--------------------------
Name:
------------------------
Title:
------------------------
PURCHASER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
--------------------------
Name:
------------------------
Title:
------------------------
Exhibit C - Page 2
FLOW SERVICING RIGHTS PURCHASE AGREEMENT
THIS FLOW AGREEMENT (this "Agreement"), dated as of the 1st day of
August, 1999, by and between OCWEN FEDERAL BANK FSB, a federal savings bank
("Purchaser"), and XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.,
a Delaware corporation ("Seller").
WHEREAS, on the date hereof, the Seller and the Purchaser have entered
into a flow Residential Servicing Agreement dated substantially of even date
herewith (the "Servicing Agreement").
WHEREAS, the Seller has purchased certain conventional adjustable rate
and fixed rate residential first and second mortgage loans (the "MCA Mortgage
Loans") on a servicing released basis as described herein, pursuant to a certain
Mortgage Loan Purchase and Sale Agreement (the "MCA Purchase Agreement") by and
between Seller and MCA Mortgage, Inc. ("MCA") as provided herein.
WHEREAS, the Seller has purchased certain conventional adjustable rate
and fixed rate residential first and second mortgage loans (the "Fieldstone
Mortgage Loans") and, together with the MCA Mortgage Loans, the "Initial
Mortgage Loans"), on a servicing released basis as described herein, pursuant to
a certain Purchase and Warranties Agreement (the "Fieldstone Purchase
Agreement") by and between Seller and Fieldstone Mortgage, Inc. ("Fieldstone")
as provided herein.
WHEREAS, the Seller intends to purchase additional conventional
adjustable rate and fixed rate residential first and second lien mortgage loans
(the "Additional Mortgage Loans" and, together with the Initial Mortgage Loans,
the "Mortgage Loans");
WHEREAS, Seller owns the Servicing Rights (as that term is defined in
Paragraph 1(f) below) with respect to the Initial Mortgage Loans and the Seller
will own the Servicing Rights with respect to the Additional Mortgage Loan; and
WHEREAS, Seller desires to sell, from time to time, to the Purchaser,
and the Purchaser desires to purchase, from time to time, from the Seller, in
accordance with the terms and conditions of this Agreement, the Servicing
Rights, with all such sales of Servicing Rights to be evidenced by the execution
of an Acknowledgment Agreement (as defined herein) by Purchaser and Seller, and
WHEREAS, Purchaser shall be obligated to service the Mortgage Loans in
accordance with the terms and conditions of the Servicing Agreement.
In consideration of the mutual promises, covenants, and conditions
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Servicing Agreement. In addition, the
following terms as used in this Agreement shall have the meanings assigned to
them below:
(a) Acknowledgment Agreement means the document, in the form
of Exhibit B hereto, to be executed by the Seller and Purchaser on or
prior to each Closing Date.
(b) Closing Date means, with respect to the Initial Mortgage
Loans, August 3, 1999, or such later date or dates as are mutually
agreed upon by the parties, and with respect to any pool of Additional
Mortgage Loans, the date or dates set forth on the Acknowledgment
Agreement.
(c) Current Servicer means Seller or any other servicer,
sub-servicer, document custodian, owner, holder, originator or other
Person who, as of the date of this Agreement, has possession of any
document or information constituting a part of the Servicing File.
(d) Cut-off Date means the date on which the purchase price
for the Servicing Rights associated with each Mortgage Loan listed on
the Mortgage Loan Schedule is calculated by Purchaser and Seller. The
Cut-off Date for the Initial Mortgage Loans shall be August 1, 1999,
and the Cut-off Date with respect to any pool of Additional Mortgage
Loans shall be that set forth on the related Acknowledgment Agreement.
(e) Mortgage Loan Schedule means the schedule of Mortgage
Loans setting forth information with respect to such Mortgage Loans
attached as Exhibit A hereto.
(f) Servicing Rights means any and all of the following: (a)
any and all rights to service the Mortgage Loans; (b) any payments to
or monies received by the Seller for servicing the Mortgage Loans; (c)
any late fees, penalties or similar payments with respect to the
Mortgage Loans (other than prepayment penalties); (d) all agreements or
documents creating, defining or evidencing any such servicing rights to
the extent they relate to such servicing rights and all rights of the
Seller thereunder, (e) any interest on Escrow Payments allowed by law
or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all
accounts and other rights to payment related to any of the, property
described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data
tapes, computer records, or other information pertaining to the
Mortgage Loans or pertaining to the past, present or prospective
servicing of the Mortgage Loans.
(g) Transfer Date means the date on which the Purchaser shall
receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller or its - designee
shall cease all servicing responsibilities. The Transfer Date for the
Initial Mortgage Loans shall be August 15, 1999, and the Transfer Date
for any pool of Additional Mortgage Loans shall be the date set forth
on the Acknowledgment Agreement.
2
2. Effectuation of Purchase and Sale; Terms and Conditions of
Servicing. Purchaser agrees to purchase from Seller, and Seller agrees to sell,
transfer, assign and deliver to Purchaser, all of Seller's right, title and
interest in and to the Servicing Rights with respect to the Mortgage Loans, it
being understood that no endorsement of mortgage notes or assignments of
mortgages shall be required in connection with this transfer. Such purchase and
sale shall take place on each Closing Date, as evidenced by the execution and
delivery of the Acknowledgement Agreement by the Seller and Purchaser (and, on
the Closing Date for the Initial Mortgage Loans, the execution and delivery of
this Agreement by the Seller and Purchaser), the execution by the Seller and
Purchaser of all related closing documents as set forth in Section 2(a) through
(d) herein, and by the delivery of the Purchase Price by the Purchaser to the
Seller. Purchaser shall assume responsibility for servicing the Mortgage Loans
effective as of each related Transfer Date. Following such transfer of
responsibility on the related Transfer Date, Purchaser shall be responsible for
servicing the Mortgage Loans in accordance with, and the Servicing Rights shall
in all respects be subject to, the terms and conditions of the Servicing
Agreement, until such time that any Mortgage Loans are no. longer subject to the
Servicing Agreement.
(a) On the Initial Closing Date, the Purchaser shall deliver
to the Seller the following:
(1) A fully executed original of this Agreement;
(2) A fully executed original of the Servicing
Agreement and all documents required to be delivered
thereunder;
(3) A fully executed original of an Acknowledgment
Agreement;
(4) The Purchase Price for the Servicing Rights
related to the Initial Mortgage Loans; and
(5) An opinion of counsel substantially in the form
of Exhibit D to the Servicing Agreement and an officer's
certificate in the form of Exhibit E to the Servicing
Agreement.
(b) On each Closing Date with respect to any Additional
Mortgage Loans, the Purchaser shall deliver to the Seller the
following:
(1) A fully executed original of the Acknowledgment
Agreement related to such Additional Mortgage Loans;
(2) The Purchase Price for the Servicing Rights
related to such Additional Mortgage Loans;
(c) On the Closing Date relating to the Initial Mortgage
Loans, the Seller shall deliver to the Purchaser the following:
(1) A fully executed original of this Agreement;
(2) A fully executed original of an Acknowledgment
Agreement; and
3
(3) A fully executed original of the Servicing
Agreement and all documents required to be delivered
thereunder.
(d) On the Closing Date for any Additional Mortgage Loans, the
Purchaser shall deliver to the Seller a fully executed original of an
Acknowledgement Agreement.
3. Purchase Price.
(a) On each Closing Date, Purchaser shall pay to Seller an
amount (the "Purchase Price") set forth on the related Acknowledgment
Agreement in consideration for the Servicing Rights related to the
Mortgage Loans.
(b) The Purchase Price shall be paid by Purchaser by wire
transfer of immediately available funds to an account of Seller
specified by Seller to Purchaser in writing on the related Closing
Date.
4. Seller's Covenants. Seller covenants and agrees with Purchaser to
take the following actions, at Seller's own expense, it being understood by the
parties hereto that the following actions may be undertaken by Seller's
designee:
(a) Prior to each Transfer Date:
(1) Seller shall inform all hazard, flood,
earthquake, private mortgage and any other insurance companies
and/or their agents providing insurance with respect to any
related Mortgage Loan of the transfer and request a change in
the loss payee mortgage endorsement clause to Purchaser's
name. With respect to each related Mortgage Loan that is
covered by a force placed insurance policy, Seller shall cause
such policy to be canceled as of the related Transfer Date,
and Purchaser shall cause such insurance to be provided by its
force placed carrier as of such Transfer Date. On- each
Transfer Date, Seller shall provide to Purchaser a list of all
related Mortgage Loans covered by force placed insurance that
will be canceled in connection with the transfer of the
related Servicing Rights to Purchaser.
(2) Seller shall cause its designee to obtain
transferable life-of-loan real estate tax service contracts on
all the related Mortgage Loans to the extent such contracts
are not already in place, and shall assign and transfer all
such contacts to Purchaser at no expense to Purchaser,
provided that if Seller is unable, after using best efforts,
to obtain such a contract, then Purchaser shall have the right
to purchase such a contract at the Seller's cost; provided
further that if Purchaser obtains a TransAmerica tax contract
for a newly originated Mortgage Loan, the Purchaser shall be
entitled to reimbursement from the Seller for no more than $50
for such contract on such Mortgage Loan.
(3) Seller shall, no later than fifteen (15) days
prior to the related Transfer Date, cause its Current Servicer
to inform all Mortgagors of the change in servicer from Seller
to Purchaser by written notice in accordance with applicable
law; provided, however, the content and format of such letters
shall have the prior approval of Purchaser. Seller shall
promptly provide Purchaser with copies of all such notices.
4
(4) Upon reasonable prior request by Purchaser,
Seller shall permit review by Purchaser of Seller's servicing
records and loan records on the premises of Seller during
normal business hours.
(5) Seller shall cause its designee to pay all
private mortgage insurance premium , if any,, and all hazard,
flood, earthquake and other insurance premiums for insurance
covering any of the Mortgage Loans, and real estate taxes for
which bills have been received prior to the Transfer Date on
all Mortgage Loans with impound/escrow accounts, to the extent
such premiums or taxes would be delinquent if unpaid within
thirty (30) days after the Transfer Date. Seller will send to
Purchaser, and Purchaser will pay, any bills received on or
after the Transfer Date and any such bills received prior to
the Transfer Date which Seller is not required to pay pursuant
to this subparagraph.
(6) Available computer or like records reflecting the
status of payments, balances and other pertinent information
on the Mortgage Loans as of the Transfer Date (such
information shall include, but not be limited to,
comprehensive tax and insurance information for each Mortgage
Loan, identifying payee, payee address, next payment due date,
next amount payable, policy number/parcel number). Such
records shall include magnetic tapes reflecting all computer
files maintained by Seller with respect to the Mortgage Loans,
shall include hard copy trial balance reports and schedules if
requested, and as reasonably required by Purchaser, to the
extent reasonably feasible, shall be in a format and storage
medium acceptable for conversion to Purchaser's servicing
computer system, and shall be delivered no later than the
Transfer Date.
(7) A hard copy of the mortgage loan file for each
Mortgage Loan (the "Loan File") consisting of all documents
available to Seller with respect to such Mortgage Loan,
including original credit files held by Seller, to be
delivered on the related Transfer Date. In addition, upon
Purchaser's reasonable request, Seller shall assist Purchaser
in all reasonable respects in Purchaser's efforts to obtain
any additional documents or information necessary to enable
Purchaser to service the Mortgage Loans properly.
(8) Copies of all investor cut-off or accounting
reports submitted by Seller relating to the Mortgage Loans as
of the related Transfer Date, including a trial balance and
reports of collections, delinquencies, prepayments,
curtailments, escrow payments, escrow balances, partial
payments, partial payment balances and other like information
on the Mortgage Loans.
(b) After each Transfer Date, Seller, at Seller's expense,
shall furnish or cause the Current Servicer to furnish, the following
to Purchaser:
5
(1) Within five (5) Business Days after the Transfer
Date, Seller will deliver to Purchaser reports setting forth
all Mortgage Loan escrow/impound balances as of the Transfer
Date, reporting all unposted payments and unearned fees which
are deemed collected as of the Transfer Date, and including a
reconciliation of such escrow/impound balances.
(2) Within five (5) Business Days after the Transfer
Date, to the extent Mortgage Loan histories are available,
Seller will deliver to Purchaser Mortgage Loan histories in
bulk or electronically.
(3) Seller shall deliver to Purchaser any
correspondence received by Seller relating to the Mortgage
Loans after the Transfer Date, such as tax bills, insurance
bills, borrower letters and the like. Such items shall be
forwarded to Purchaser within five (5) Business Days following
the day on which the correspondence is received by Seller. The
correspondence shall be forwarded to Purchaser via overnight
courier for the first thirty (30) days subsequent to the
Transfer Date and via regular mail thereafter.
(4) Seller shall deliver to Purchaser any payments on
the Mortgage Loans received by Seller from the related
Mortgagors for a period of seventy-five (75) days following
the Transfer Date. Seller shall forward any such payment to
Purchaser within two (2) Business Days after Seller's receipt
thereof. Such payments shall be forwarded to Purchaser via
overnight courier for the first thirty (30) days subsequent to
the Transfer Date and via regular mail for the following
thirty (30) days. Thereafter, Seller shall return to the
related Mortgagors any payments on the Mortgage Loans received
by Seller.
(5) Seller shall mail year-end statements reporting
interest income and interest expense . statements to all
Mortgagors for the period from January 1, 1999 through the
Transfer Date.
(c) Purchaser shall not be required to assume any
representations and warranties made by Seller to any third party, or
made to Seller by any entity that sold a Mortgage Loan to Seller,
relating to the underwriting, origination or prior servicing of any of
the Mortgage Loans.
5. Purchaser's Covenants. Purchaser covenants and agrees with Seller to
take the following actions:
(a) Loan Set-up on Purchaser's Servicing System. Promptly upon
receipt of the information specified in Paragraph 4(a)(6), Purchaser
shall enter into its servicing system all appropriate information
concerning each of the Mortgage Loans as necessary to enable Purchaser
to service the Mortgage Loans in accordance with the Servicing
Agreement.
(b) Mortgager Notifications. No more than ten (10) calendar
days after the related Transfer Date, Purchaser will send to the
Mortgagors written notice of the transfer of servicing. Purchaser shall
include in such notice all information that is required to be so
included in order to comply with all applicable federal, state or local
laws.
6
(c) Servicing Obligations. From and after the Transfer Date,
Purchaser shall service the Mortgage Loans pursuant to, and in
compliance with, the terms and conditions of the Servicing Agreement
and the related mortgage note for as long as such Mortgage Loans are
subject to the Servicing Agreement.
(d) Form 1098's and 1099's. Purchaser shall prepare and send,
in accordance with the provisions of the Servicing Agreement, Internal
Revenue Service Form 1098's and 1099's with respect to each of the
Mortgage Loans which cover the period commencing with the Transfer
Date.
(e) Establishment of Escrow Accounts. Purchaser shall
establish and maintain all escrow accounts that are to be maintained in
connection with the Mortgage Loans in accordance with the requirements
set forth in the -Servicing Agreement. Purchaser shall fund the newly
established escrow accounts for each Mortgage Loan on the basis of the
escrow account balance information provided by Current Servicer for
that Mortgage Loan pursuant to Paragraphs 4(a)(8) and 4(b)(1) above.
6. Reimbursement of Advances. Within five (5) Business Days
following the transfer and reconciliation of all funds held by Seller with
respect to the Mortgage Loans on which the Servicing Rights are transfered to
Purchaser, Purchaser will reimburse the Seller, or Seller's current servicer for
any unreimbursed delinquency and servicing advances with respect to such
Mortgage Loans that have been properly documented.
7. Payment of Costs. Purchaser and Seller shall each be
responsible for its own expenses in connection with the performance of its
obligations under this Agreement, which include, but are not limited to, its
legal and accounting fees and data processing related costs. Without limiting
the generality of the foregoing, Purchaser shall pay (i) all shipping expenses
for records and files required to be transferred to Purchaser hereunder and (ii)
any third party or governmental transfer fees resulting from the servicing
transfer.
8. Seller's Indemnification; Repurchase.
(a) Seller agrees to indemnify and hold Purchaser harmless
from and against any claims, demands, liabilities, losses, causes of
action or expenses (including, without limitation, reasonable
attorneys', fees) incurred by Purchaser that result from (i) any breach
by Seller of any of its obligations or representations or warranties in
this Agreement, (ii) any material errors or unlawful acts or omissions
in connection with the origination of any Mortgage Loan or in
connection with the servicing of any Mortgage Loan prior to the
Transfer Date, or (iii) Purchaser's inability to service a Mortgage
Loan properly to the extent such inability was due solely to the fact
that Seller did not deliver to Purchaser one or more documents that
were reasonably necessary to enable Purchaser to service such Mortgage
Loan properly, or (iv) any fact is discovered that would constitute a
breach of the Seller's representations and warranties in either Section
10(h) or 10(k) if the knowledge qualifier were not contained therein.
7
(b) If any fact is discovered that would constitute a material
breach of the Seller's representations and warranties in either Section
10(h) or 10(k) if the knowledge qualifier were not contained therein,
then the Seller, at the sole option of the Purchaser, shall repurchase
the Servicing Rights of the related Mortgage Loan at the Purchase Price
paid therefor. This obligation to repurchase such Servicing Rights
shall be in addition to the Seller's obligation to provide
indemnification under Section 8(a).
9. Purchaser's Indemnification. Purchaser agrees to indemnify and hold
Seller or Seller's designee harmless from and against any claims, demands,
liabilities, losses, causes of action or expenses (including, without
limitation, reasonable attorneys' fees) incurred by Seller which result from any
breach by Purchaser of any of its obligations or representations in this
Agreement or any third party claim or actions that were caused directly by or
directly resulted from a breach of any of the Purchaser's representations and
warranties contained in this Agreement or the Servicing Agreement or the failure
of the Purchaser to perform its duties in accordance with the terms of the
Servicing Agreement and Accepted Servicing Practices (as defined in the
Servicing Agreement). Notwithstanding anything to the contrary set forth in this
Agreement, Seller acknowledges and agrees that any obligation of the Purchaser
to indemnify Seller shall not apply to the extent that such obligation arose
solely out of the failure by Seller to provide Purchaser with the information
that was reasonably and materially necessary to enable Purchaser to service the
Mortgage Loans properly.
10. Seller's Representations and Warranties. In addition to Seller's
representations and warranties under the Servicing Agreement, and as an
inducement to Purchaser to enter into this Agreement, Seller represents and
wan-ants as follows as of the date hereof and as of each Closing Date and each
Transfer Date:
(a) Seller is a duly organized and validly existing Delaware
corporation in good standing under the laws of such state; and this
Agreement has been duly and validly authorized by all necessary
corporate action on the part of Seller, and is the valid and binding
obligation of Seller; enforceable against Seller in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, and other similar laws relating to creditors'
rights generally and by general principles of equity.
(b) The execution, delivery and performance of this Agreement
by Seller, Seller's compliance with the terms `hereof and consummation
of the transactions, contemplated hereby will not violate, conflict
with, result in a breach of, constitute a default under, be prohibited
by or require any additional approval under, its charter, bylaws, or
any material agreement or other instrument to which Seller is a party
or by which it or any material portion of its property is bound, or any
federal, state or local statute, regulation or ordinance applicable to
Seller, or any order of any federal or state court or regulatory agency
applicable to Seller.
(c) The execution, delivery and performance of this Agreement
by Seller will not result in any violation of any material contract,
instrument or undertaking of Seller or one to which Seller is a party
or by which Seller is bound.
8
(d) Seller is the owner of and has good and marketable title
to the Servicing Rights and assigns those Servicing Rights to Purchaser
on the Closing Dates free and clear of all liens of any kind, and is
not contractually obligated to sell the Servicing Rights to any party
other than Purchaser.
(e) No finder's fees, commissions or other similar payments
are or will be required to be paid to any person or entity on account
of the transactions contemplated by this Agreement.
(f) Seller knows of no litigation, claim, proceeding or
governmental investigation pending or threatened against Seller, which,
in the opinion of Seller, may materially and adversely affect Seller's
ability to perform its obligations hereunder or under the Servicing
Agreement.
(g) No other authorization or approval of the transfer of
servicing of the Mortgage Loans, other than Seller's agreement herein,
shall be necessary.
(h) To the best of Seller's knowledge, each Mortgage Loan has
been originated and serviced in compliance with all applicable federal,
state and local laws and regulations and consistent with the
requirements of the Servicing Agreement and the terms of the Mortgage
Loans.
(i) All representations and warranties made by, the Seller in
the Servicing Agreement are true and correct in all material respects.
(j) All information provided to Purchaser by Seller in
connection with the sale and transfer of the Servicing Rights to the
Purchaser is true and correct in all material respects.
(k) To the best of Seller's knowledge, all data received by
Purchaser from Seller, whether in an electronic, magnetic or other
machine readable form, which is used or processed by a computer,
computer hardware or infrastructure, software or computer network,
shall be provided in a Year 2000 Compliant Format. For the purposes of
this Agreement "Year 2000 Compliant Format" means that all data is
correctly formatted so that all date-related arithmetic and logical
operations including operations which cross the century boundary will
be correctly read, used or processed, sorted in correct chronological
order, and correctly addresses leap years including, without limitation
the year 2000, as a "leap year."
11. Purchaser's Representations and Warranties. In addition to
Purchaser's representations and warranties under the Servicing Agreement, and as
an inducement to Seller to enter into this Agreement, Purchaser represents and
warrants as follows, as of the date hereof, as of each Closing Date and each
Transfer Date:
(a) Purchaser is duly organized, validly existing and in good
standing as a federally chartered savings bank, and this Agreement has
been duly and validly authorized by all necessary action on the part of
Purchaser, and is the valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy,
insolvency, and other similar laws relating to creditors' rights
generally and by general principles of equity.
9
(b) The execution, delivery and performance of this Agreement
by Purchaser, Purchaser's compliance with the terms hereof and
consummation of the transactions contemplated hereby will not violate,
conflict with, result in a breach of, constitute a default under, be
prohibited by or require any additional approval under, its charter,
bylaws, or any material agreement or other instrument to which
Purchaser is a party or by which it or any material portion of its
property is bound, or any federal, state or local statute, regulation
or ordinance applicable to Purchaser, or any order of any federal or
state court or regulatory agency applicable to Purchaser.
(c) Purchaser satisfies all of the criteria specified in the
Servicing Agreement for eligibility as a servicer and is fully capable
of servicing all of the Mortgage Loans in accordance with the
requirements of the Servicing Agreement.
(d) Purchaser has received all federal, state and local
governmental and regulatory licenses, permits and other authorizations
required in order for it to service the Mortgage Loans in accordance
with the Servicing Agreement
(e) No finder's fees, commissions or other similar payments
are or will be required to be paid to any person or entity on account
of the transactions contemplated by this Agreement.
(f) Purchaser knows of no litigation, claim proceeding or
governmental investigation pending or threatened against Purchaser,
which, in the opinion of Purchaser, may materially and adversely affect
Purchaser's ability to perform its obligations hereunder or under the
agreements or instruments required by this Agreement to be executed by
Purchaser.
12. Miscellaneous.
(a) Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which
counterparts shall together constitute but one and the same instrument.
(b) Headings. The headings used throughout this Agreement are
inserted as a matter of convenience only and in no way define or limit
the scope or intent of the provision which follows the heading or any
other provision of this Agreement.
(c) Confidentiality. Seller and Purchaser agree not to
disclose to any third party any non-public information provided to it
by the other party in the course of performance under this Agreement,
except as such disclosure may be required by law.
(d) No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto only. There shall be no third
party beneficiaries hereof, unless the parties hereto mutually agree to
assign or transfer their respective rights under this Agreement.
10
13. No Solicitation of Borrowers. For as long as Purchaser services any
of the Mortgage Loans hereunder, Seller and Purchaser, covenant that it will
not, and that it will ensure that its affiliates and agents will not, directly
solicit or provide information for any other party to solicit for prepayment or
refinancing of any of the Mortgage Loans by the related Mortgagors. It is
understood that promotions undertaken by Seller or Purchaser which are directed
to the general public at large (such as, for example, newspaper advertisements
and radio or television advertisements) shall not constitute solicitation as
that term is used in this paragraph.
14. Severability. In the event any provision of this Agreement is
inconsistent with or in violation of any applicable state or federal law, the
parties agree that such provision shall be of no force or effect and that this
Agreement shall continue as though said contrary provision was deleted from this
Agreement.
15. Notices. Any notice, demand, or communication which either party
desires or is required to give the other party in connection with this Agreement
shall be in writing and shall be either served personally or sent by telecopier
or prepaid first class United States mail or by overnight courier, addressed to
the applicable parties as follows:
"Seller" Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings, Inc.
3 World Financial Center, 8th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager, Contract Finance
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
"Purchaser" Ocwen Federal Bank FSB
0000 Xxxx Xxxxx Xxxxx Xxxx.
Xxxxx 0000
Xxxx Xxxx Xxxxx, XX 00000
Attention: Secretary
Telephone Number: (000) 000-0000
Telecopier Number: (000) 000-0000
16. Amendments. No addendum, supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by the parties
hereto.
17. Entire Agreement. This Agreement, including all documents and
Exhibits incorporated by reference herein, constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all other agreements, covenants, representations, warranties,
understandings and communications between the parties, whether written or oral,
with respect to the transactions contemplated by this Agreement.
11
18. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
19. WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO1WS
AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.
20. Limitation of Damages. NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO
THE CONTRARY, THE PARTIES AGREE THAT NEITHER PARTY SHALL BE LIABLE TO THE OTHER
FOR ANY SPECIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLE.
12
IN WITNESS WHEREOF, the parties have caused these presents to be
executed by their proper corporate officers this the day and year first above
written.
"Purchaser"
OCWEN FEDERAL BANK FSB
By: /s/ Xxxxxxx X.X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X.X. Xxxxxxx
Title:: Senior Vice President
"Seller"
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
13
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
ACKNOWLEDGMENT AGREEMENT
On this ___ day of _______________, 19__, Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc. (the "Seller") as the Owner under that certain
Servicing Agreement dated as of August 1, 1999, (the "Agreement"), does hereby
transfer to Ocwen Federal Bank FSB (the "Purchaser") as Servicer under the
Agreement, the Servicing Rights and servicing responsibilities related to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto (the
"Related Mortgage Loans") in exchange for the Purchase Price. The Purchase Price
shall equal:
The Purchaser hereby accepts the Servicing Rights and servicing
responsibilities transferred hereby and on the date hereof assumes all servicing
responsibilities related to the Related Mortgage Loans all in accordance with
the Agreement. The contents of each Servicing File required to be delivered to
service the Mortgage Loans pursuant to the Agreement have been or shall be
delivered to the Purchaser by the Seller in accordance with the terms of the
Agreement.
With respect to the Related Mortgage Loans, the Cut-off Date is
___________, the Closing Date is __________, and the Transfer Date is ________.
The following fees shall apply to the Related Loans:
Servicing Fee:
Setup Fee:
All other terms and conditions of this transaction shall be governed by
the Agreement Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement This Acknowledgment Agreement may be
executed simultaneously in any number of counterparts. Each counterpart shall be
deemed to be an original, and all such counterparts shall constitute one and the
same instrument.
2
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
SELLER:
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
PURCHASER:
OCWEN FEDERAL BANK FSB
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
EXECUTION
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered into
as of the 1st day of October, 2001, by and between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), XXXXXX
BROTHERS BANK, FSB, a federal savings bank (the "Bank") (Xxxxxx Capital and the
Bank shall collectively be referred to herein as the "Seller"), OCWEN FEDERAL
BANK FSB, a federal savings bank (the "Servicer"), and XxxxX Fargo Bank
Minnesota, National Association, as master servicer (the "Master Servicer"), and
acknowledged by Bank One, National Association, as trustee (the "Trustee"),
recites and provides as follows:
RECITALS
WHEREAS, the Bank has conveyed certain mortgage loans as identified on
Schedule I hereto (the "Schedule I Mortgage Loans") and Xxxxxx Capital has
conveyed certain mortgage loans as identified on Schedule II hereto (the
"Schedule II Mortgage Loans") (the Schedule I Mortgage Loans and the Schedule II
Mortgage Loans as identified on the Mortgage Loan Schedule attached as Schedule
III hereto collectively referred to herein as the "Mortgage Loans") to
Structured Asset Securities Corporation, a Delaware special purpose corporation
("SASCO"), which in turn has conveyed the Mortgage Loans to the Trustee pursuant
to a trust agreement dated as of October 1, 2001 (the "Trust Agreement"), among
the Trustee, the Master Servicer SASCO, as depositor, and The Murrayhill
Company, as loss mitigation advisor (the "Loss Mitigation Advisor") under a Loss
Mitigation Advisory Agreement dated as of October 1, 2001 between the Loss
Mitigation Advisor and the Servicer (the "Loss Mitigation Advisory Agreement");
WHEREAS, multiple classes of certificates (the "Certificates") will be
issued on the Closing Date pursuant to the Trust Agreement, including the Class
P Certificate and the Class X Certificate, and Xxxxxx Brothers Inc. or a nominee
thereof is expected to be the initial registered holder of the Class P
Certificate and the Class X Certificate;
WHEREAS, subsequent to the Closing Date, Xxxxxx Brothers Inc. intends
to convey all of its rights, title and interest in and to the Class P and Class
X Certificates and the payments and all other proceeds received thereunder to an
owner trust in which it will hold the sole equity interest, which trust will
issue net interest margin securities (the "NIM Securities") through an indenture
trust, which NIM Securities will be secured, in part, by the payments on such
NIM Securities (the "NIMS Transaction");
WHEREAS, one or more insurers (collectively, the "NIMS Insurer") will
each issue insurance policies guaranteeing certain payments under the NIM
Securities to be issued in the NIMS Transaction;
WHEREAS, in the event that there are two or more NIMS Insurers, it is
intended that the rights provided to the NIMS Insurer hereunder will be
allocated among two or more individual insurers that issue insurance policies in
connection with the NIMS Transaction pursuant to a NIMS Insurance Agreement
among such insurers and the parties hereto;
WHEREAS, certain of the Mortgage Loans are being serviced by the
Servicer for the Bank pursuant to the Residential Flow Servicing Agreement,
dated September 1, 2001, between the Servicer and the Bank, as "Owner" (for
Performing and Non-Performing Residential Mortgage Loans and REO Properties)
(the "Bank Flow Agreement");
WHEREAS, certain of the Mortgage Loans are currently being serviced by
the Servicer for Xxxxxx Capital pursuant to the Residential Flow Servicing and
Sale of Servicing Rights Agreement, dated August 1, 1999, between the Servicer,
AMRESCO Residential Mortgage Corporation and Finance America, LLC (the "Finance
America Agreement", which agreement was assigned to Xxxxxx Capital) and other
Mortgage Loans are currently being serviced under the Xxxxxx Capital Flow
Agreement described below;
WHEREAS, in order to facilitate this reconstitution, each Seller (with
respect to its related Mortgage Loans) and the Servicer desire to transfer the
servicing of the aforementioned Mortgage Loans currently being serviced under
the Finance America Agreement and the Bank Flow Agreement to the Residential
Flow Servicing Agreement, dated August 1, 1999, between the Servicer and Xxxxxx
Capital (for Performing and Non-Performing Residential Mortgage Loans and REO
Properties) (the "Xxxxxx Capital Flow Agreement") (attached as Exhibit C hereto)
so as to consolidate the servicing of all of the Mortgage Loans thereunder
solely for purposes of this reconstitution;
WHEREAS, the Bank Flow Agreement, the Finance America Agreement and the
Xxxxxx Capital Flow Agreement, collectively when reconstituted, shall be
referred to herein as the "Servicing Agreement;"
WHEREAS, each Seller (with respect to its related Mortgage Loans)
desires that the Servicer continue to service the Mortgage Loans, and the
Servicer has agreed to do so, subject to the rights of the Master Servicer and
each Seller (with respect to its related Mortgage Loans) to terminate the rights
and obligations of the Servicer hereunder as set forth herein and to the other
conditions set forth herein;
WHEREAS, each Seller (with respect to its related Mortgage Loans) and
the Servicer agree that the provisions of the Servicing Agreement shall apply to
the Mortgage Loans, but only to the extent provided herein and that this
Agreement shall constitute a Reconstitution Agreement (as defined in the
Servicing Agreement) which shall govern the Mortgage Loans for so long as such
Mortgage Loans remain subject to the provisions of the Trust Agreement;
WHEREAS, the Master Servicer and any successor master servicer shall be
obligated, among other things, to supervise the servicing of the Mortgage Loans
on behalf of the Trustee, and shall have the right to terminate the rights and
obligations of the Servicer upon the occurrence and continuance of a Servicer
Event of Default under this Agreement;
WHEREAS, each Seller (with respect to its related Mortgage Loans) and
the Servicer intend that the NIMS Insurer and the Trustee each be an intended
third party beneficiary of this Agreement, provided that the rights extended to
the NIMS Insurer pursuant to this Agreement shall exist only so long as the NIM
Securities issued pursuant to the NIMS Transaction remain outstanding or the
NIMS Insurer is owed amounts in respect of its guaranty of payment on such NIM
Securities;
2
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, each Seller (with respect to its
related Mortgage Loans), the Master Servicer and the Servicer hereby agree as
follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto and any provisions of the Agreement
incorporated by reference herein, shall have the meanings (regardless if such
terms are defined in the Servicing Agreement, except for the term "Collection
Account") ascribed to such terms in the Trust Agreement attached as Exhibit B
hereto.
2. Merger. For administrative convenience, each Seller (with respect to
its related Mortgage Loans) and the Servicer hereby agree that the servicing of
those Mortgage Loans currently being serviced under the Finance America
Agreement and the Bank Flow Agreement shall be deemed transferred for servicing
under the Xxxxxx Capital Flow Agreement as reconstituted by this Agreement.
3. Servicing. The Servicer agrees, with respect to the Mortgage Loans,
to perform and observe the duties, responsibilities and obligations that are to
be performed and observed under the provisions of the Servicing Agreement,
except as otherwise provided herein and on Exhibit A hereto, and that the
provisions of the Servicing Agreement, as so modified, are and shall be a part
of this Agreement to the same extent as if set forth herein in full.
4. Master Servicing; Termination of Servicer. The Servicer, including
any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Mortgage Loans in accordance with the provisions of this
Agreement. The Master Servicer, acting on behalf of the Trustee and the trust
fund created pursuant to the Trust Agreement (the "Trust Fund"), shall have the
same rights as each Seller (with respect to its related Mortgage Loans) under
the Servicing Agreement to enforce the obligations of the Servicer under the
Servicing Agreement and the term "Owner" as used in the Servicing Agreement in
connection with any rights of the Owner shall refer to the Master Servicer
except as otherwise specified in Exhibit A hereto. The Master Servicer shall be
entitled to terminate, and at the direction of the NIMS Insurer shall terminate,
the rights and obligations of the Servicer under this Agreement upon the failure
of the Servicer to perform any of its obligations under this Agreement, which
failure results in a Servicer Event of Default, as provided in Article IX of the
Servicing Agreement. Notwithstanding anything herein to the contrary, in no
event shall the Master Servicer be required to assume any of the obligations of
either Seller (with respect to its related Mortgage Loans) hereunder or under
the Servicing Agreement, and in connection with the performance of the Master
Servicer's duties hereunder the parties and other signatories hereto agree that
the Master Servicer shall be entitled to all of the rights, protections and
limitations of liability afforded to the Master Servicer under the Trust
Agreement.
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5. No Representations. Neither the Servicer nor the Master Servicer
shall be obligated or required to make any representations and warranties
regarding the characteristics of the Mortgage Loans in connection with the
transactions contemplated by the Trust Agreement and issuance of the
Certificates issued pursuant thereto.
6. Notices. All notices, consents, certificates or reports
(collectively "written information") required to be delivered hereunder between
or among the parties hereto (including any third party beneficiary thereof)
shall be in writing, may be in the form of facsimile or electronic transmission,
and shall be deemed received or given when mailed first-class mail, postage
prepaid, addressed to each other party at its address specified below or, if
sent by facsimile or electronic mail, when facsimile or electronic confirmation
of receipt by the recipient is received by the sender of such notice. Each party
may designate to the other parties in writing, from time to time, other
addresses to which notices and communications hereunder shall be sent.
All written information required to be delivered to the Master Servicer
under this Agreement shall be delivered to the Master Servicer at the following
address:
Xxxxx Fargo Bank Minnesota,
National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Master Servicing
Department ARC 2001-BC6
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All remittances required to be made to the Master Servicer under this
Agreement shall be made on a scheduled/scheduled basis to the following wire
account:
Xxxxx Fargo Bank Minnesota
National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: Collection Account No. 00000000 (ARC 2001-BC6)
All written information required to be delivered to the Trustee
hereunder shall be delivered to the Trustee at the following address:
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Bank One, National Association
1 Bank Xxx Xxxxx
Xxxx Xxxxx XX0-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Global Corporate Trust Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All written information required to be delivered to either Seller (with
respect to its related Mortgage Loans) hereunder shall be delivered to either
the Bank or Xxxxxx Capital at the following addresses:
Xxxxxx Capital, a Division of Xxxxxx
Brothers Holdings Inc.
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Manager, Contract Finance (ARC 2001-BC6)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx Brothers Bank, FSB
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Contract Finance - Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All written information required to be delivered to the Servicer shall
be delivered to the Servicer at the following address:
Ocwen Federal Bank FSB
The Forum, Suite 1002
1675 Palm Beach Xxxxx Xxxxxxxxx
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All written information required to be delivered to the NIMS Insurer
shall be delivered to the NIMS Insurer at the address specified in the Trust
Agreement a copy of which is attached as Exhibit D hereto.
7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NOTWITHSTANDING NEW YORK OR
OTHER CHOICE OF LAW RULES TO THE CONTRARY.
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8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
9. Reconstitution. Each Seller (with respect to its related Mortgage
Loans) and the Servicer agree that this Agreement is a "Reconstitution
Agreement" and that the date hereof is the "Reconstitution Date", each as
defined in the Bank Flow Agreement, the Xxxxxx Capital Flow Agreement and the
Finance America Agreement.
Executed as of the day and year first above written.
XXXXXX BROTHERS BANK, FSB,
as Seller
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Authorized Signatory
OCWEN FEDERAL BANK FSB
as Servicer
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxx Xxxxx
-------------------------------
Name: Xxx Xxxxx
Title: Assistant Vice President
Acknowledged By:
BANK ONE, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
EXHIBIT A
Modifications to the Flow Servicing Agreement
1. Unless otherwise specified herein, any provisions of the Flow Servicing
Agreement, including definitions, relating to (i) representations and
warranties of the Owner, (ii) Agency Transfers, Pass-Through Transfers,
whole loan transfers, reconstitution and securitization, (iii) the sale
and purchase of the Mortgage Loans and Setup Expenses, (iv) Transfer
Dates, (v) Non-Performing Loans, and (vi) Preliminary Servicing Period,
shall be disregarded. The exhibits to the Servicing Agreement and all
references to such exhibits shall also be disregarded.
2. For reporting purposes, a Mortgage Loan is "delinquent" when any
payment contractually due thereon has not been made by the close of
business on the due date therefor. Such Mortgage Loan is "30 days
Delinquent" if such payment has not been received by the close of
business on the corresponding day of the month immediately succeeding
the month in which such payment was first due, or, if there is no such
corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month), then on the
last day of such immediately succeeding month. Similarly for "60 days
Delinquent" and the second immediately succeeding month and "90 days
Delinquent" and the third immediately succeeding month.
3. The definition of "Accepted Servicing Practices" is hereby deleted and
replaced by the following:
With respect to any Mortgage Loan, those mortgage servicing
practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan
in the jurisdiction where the related Mortgaged Property is
located.
4. The definition of "Ancillary Income" in Article I is hereby amended by
adding the words "as additional compensation" to the end of the last
sentence.
5. A new definition of "Adverse REMIC Event" is hereby added to Article I
to read as follows:
"Adverse REMIC Event": As defined in Article X of the Trust
Agreement.
6. The definition of Business Day in Article I is hereby amended by adding
", Illinois, Minnesota, Florida, New Jersey or Maryland" immediately
following the word "New York" in the definition thereof.
7. The definition of "Collection Account" in Article I is hereby amended
by deleting the words "in trust for Xxxxxx Capital, a Division of
Xxxxxx Brothers Holdings Inc. and its successors and assigns" and
substituting the following words: "Ocwen Federal Bank, FSB, in trust
for the Trustee for the ARC 2001-BC6 Trust."
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8. The definition of "Collection Period" in Article I is hereby amended in
its entirety to read as follows:
"Collection Period" means with respect to each Distribution
Date, the period commencing on the second day of the month
immediately preceding the month of the related Distribution
Date and ending on the first day of the month of such
Distribution Date.
9. The definition of "Current Servicer" in Article I shall be deleted in
its entirety.
10. A new definition of "Custodial Agreement" is added to Article I
immediately following the definition of "Current Servicer" to read as
follows:
"Custodial Agreement" means each of the individual custodial
agreements between a Custodian and Bank One, National
Association, as trustee, relating to the custody of the
Mortgage Files for the Mortgage Loans.
11. The definition of "Custodian" in Article I is hereby amended in its
entirety to read as follows:
"Custodian" means each of Bankers Trust Company of California,
N.A., US Bank Trust National Association, The Chase Manhattan
Bank (formerly known as Chase Bank of Texas, N.A.) and LaSalle
National Bank, N.A. or any successor custodian appointed
pursuant to the related Custodial Agreement.
12. The definition of "Determination Date" in Article I is hereby amended
in its entirety to read as follows:
"Determination Date" means, with respect to each Distribution
Date, the 15th day of the month in which such Distribution
Date occurs, or, if such day is not a Business Day, the next
succeeding Business Day.
13. The definition of "Distribution Date" in Article I is hereby amended in
its entirety to read as follows:
"Distribution Date" means the 18th day (or if such 18th day is
not a Business Day, the first Business Day immediately
following) of any month.
14. A new definition of "Distressed Mortgage Loan" is added to Article I
immediately following the definition of "Distribution Date" to read as
follows:
"Distressed Mortgage Loan" means as of any Determination Date,
any Mortgage Loan that is delinquent in payment for a period
of 90 days or more, without giving effect to any grace period
permitted by the related Mortgage Note, or for which the
Servicer or Trustee has accepted a deed in lieu of
foreclosure.
15. The definition of "Eligible Account" in Article I is hereby amended in
its entirety to read as follows:
"Eligible Account" means a segregated account maintained by
either (i) a depository institution the accounts of which are
insured by the FDIC and the short-term debt obligations of
which (or in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated "A-1" or better
by S&P or "Prime-1" or better by Xxxxx'x (or an equivalent
rating or higher, if another rating agency is specified by the
Master Servicer by written notice to the Servicer and the NIMS
Insurer) or (ii) the corporate trust department of any bank
the debt obligations of which are rated at least AA or its
equivalent by either of S&P or Xxxxx'x.
2
16. The definition of "Escrow Accounts" in Article I is hereby amended by
deleting the words "for Xxxxxx Capital, a Division of Xxxxxx Brothers
Holdings Inc. and its successors and assigns, and various mortgagors"
and replacing them with the following words: "for the Trustee for the
ARC 2001-BC6 Trust and various mortgagors".
17. The definition of "Fitch" in Article I is hereby amended to read as
follows:
"Fitch" means Fitch, Inc. and its successors and assigns.
18. A new definition of "Monthly Advance" is added to Article I immediately
following the definition of "Missing Document Report" to read as
follows:
"Monthly Advance" means with respect to each Distribution Date
and each Loan, an amount equal to the Monthly Payment (with
the interest portion of such Monthly Payment adjusted to the
Mortgage Loan Remittance Rate) that was due on the Mortgage
Loan, and that was delinquent at the close of business on the
first day of the month in which such Distribution Date occurs,
but only to the extent that such amount is expected, in the
reasonable judgment of the Servicer, to be recoverable from
collections or other recoveries in respect of such Mortgage
Loan. To the extent that the Servicer determines that any such
amount is not recoverable from collections or other recoveries
in respect of such Mortgage Loan, such determination shall be
evidenced by a certificate of a Servicing Officer delivered to
the Master Servicer (and a copy of which shall be provided by
the Servicer to the NIMS Insurer) setting forth such
determination and the procedures and considerations of the
Servicer forming the basis of such determination, which shall
include a copy of any broker's price opinion and any other
information or reports obtained by the Servicer which may
support such determination.
19. The definition of "Mortgage Insurance" in Article I is hereby amended
and restated in its entirety to read as follows:
"Mortgage Insurance" means any mortgage insurance, including
any PMI Policy, or guaranty relating to a Mortgage Loan issued
by a Mortgage Insurer.
20. The definition of "Non-Recoverable Advance" in Article I is hereby
amended by replacing the reference to "Section 2.3(b)" with "Section
2.3(c)".
21. The definition of "Opinion of Counsel" is hereby amended and restated
as follows:
"Opinion of Counsel" A written opinion of counsel, who may be
an employee of the Servicer, that is reasonably acceptable to
the Trustee, the Master Servicer and the NIMS Insurer,
provided that any Opinion of Counsel relating to (a)
qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be an opinion of
counsel reasonably acceptable to the Trustee, the Master
Servicer, and the NIMS Insurer, who (i) is in fact independent
of the Seller, the Servicer and any Master Servicer of the
Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller, the Servicer or any
Master Servicer of the Mortgage Loans or in an affiliate of
any such entity and (iii) is not connected with the Seller,
the Servicer or any Master Servicer of the Mortgage Loans as
an officer, employee, director or person performing similar
functions.
3
22. A new definition of "PMI Policy" is added to Article I to immediately
follow the definitions of "Person" and to read as follows:
"PMI Policy" means a policy of primary mortgage guaranty
insurance issued by a Qualified Insurer as required by this
Agreement or the Trust Agreement with respect to a Mortgage
Loan.
23. New definitions of "Prepayment Charge" and "Prepayment Charge Schedule"
are added to Article I to immediately precede the definition of
"Prepayment Interest Shortfall Amount" and to read as follows:
"Prepayment Charge" means with respect to any Mortgage Loan
and Distribution Date, the charges or premiums, if any,
exclusive of any servicing charges collected by the Servicer
in connection with a Mortgage Loan payoff, due in connection
with a full or partial prepayment of such Mortgage Loan during
the immediately preceding Collection Period in accordance with
the terms thereof (other than any Servicer Prepayment Charge
Payment Amount).
"Prepayment Charge Schedule" means a data field in the
Schedule of Mortgage Loans attached as Schedule I hereto which
indicates the amount of the Prepayment Charge and the period
during which such Prepayment Charge is imposed with respect to
a Mortgage Loan.
24. The definition of "Prepayment Interest Shortfall Amount" in Article I
is hereby amended by inserting the words (i) "voluntary (not including
discounted payoffs)" between the words "a" and "principal" in the
second line thereof, (ii) "or in part" between the words "full" and
"during" in the second line thereof and (iii) "for Prepayments in full
only" at the end of the parenthetical.
A new definition of "Prepayment Period" is added to Article I
immediately following the definition of "Prepayment Interest Shortfall"
to read as follows:
With respect to each Distribution Date and any full or partial
Principal Prepayments, the calendar month immediately
preceding the month of such Distribution Date.
25. A new definition of "Prime Rate" is added to Article I immediately
following the definition of "Prepayment Interest Shortfall Amount" to
read as follows:
"Prime Rate" means the prime rate published from time to time,
as published as the average rate in The Wall Street Journal
Northeast Edition.
26. A new definition of "Purchase Price" is added to Article I immediately
following the definition of "Property Protection Expenses" to read as
follows:
"Purchase Price". With respect to any Mortgage Loan or REO
Property to be purchased by the NIMS Insurer pursuant to
Section 6.10, an amount equal to the sum of (i) 100% of the
principal balance thereof as of the date of purchase, (ii)
accrued interest on such principal balance at the applicable
mortgage interest rate in effect from time to time to the due
date as to which interest was last covered by a payment by the
Obligor or a Monthly Advance by the Servicer or Master
Servicer and (iii) any unreimbursed Servicing Advances,
Monthly Advances and any unpaid Servicing Fees allocable to
such Distressed Mortgage Loan.
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27. The definition of "Property Protection Expenses" in Article I is hereby
amended by adding the word "reasonable" at the beginning of clauses (h)
and (i).
28. A new definition of "Qualified Insurer" is added to Article I to
immediately follow the definition of "Property Protection Expenses" to
read as follows:
"Qualified Insurer" means a mortgage guaranty insurance
company duly authorized and licensed where required by law to
transact mortgage guaranty insurance business and approved as
an insurer by FHLMC and FNMA.
29. The definition of "REO Property" in Article I is hereby amended by
replacing the word "Owner" with "the Trustee on behalf of the Trust
Fund".
30. The definition of "Servicing Advances" in Article I is hereby amended
in its entirety to read as follows:
"Servicing Advances" means all customary, reasonable and
necessary "out-of-pocket" costs and expenses (including
reasonable attorneys' fees and disbursements) incurred by the
Servicer in the performance by the Servicer of its servicing
obligations hereunder, including, but not limited to, (a)
Property Protection Expenses, Escrow Payments, and Property
Improvement Expenses, and (b) any enforcement or
administrative or judicial proceedings, including
foreclosures.
31. The definition of "Servicing Fee" in Article I is hereby amended in its
entirety to read as follows:
"Servicing Fee" means an amount equal to one-twelfth the
product of (a) a rate per annum equal to 0.50% and (b) the
outstanding principal balance of the Mortgage Loan. The
Servicing Fee is payable solely from the interest portion
(including recoveries with respect to interest from
Liquidation Proceeds) of such Monthly Payment collected by the
Servicer or as otherwise provided under this Agreement. In the
event servicing is transferred to a successor servicer, clause
(a) of the Servicing Fee may not exceed 0.50% per annum.
32. The definition of "Servicing File" in Article I is hereby replaced with
the following:
"Servicing File" means with respect to each Loan, the file
retained by the Servicer.
33. The parties hereto acknowledge that Section 2.1 (Transfer of Servicing
Files to Servicer) of the Servicing Agreement shall be inapplicable to
this Agreement.
34. A new definition of "Servicer Prepayment Charge Payment Amount" is
added to Article I immediately after the definition of "Servicing File"
to read as follows:
"Servicer Prepayment Charge Payment Amount" means any amounts
paid by the Servicer as a result of an impermissible waiver of
a Prepayment Charge pursuant to this Agreement.
5
35. The parties hereto acknowledge that the provisions of Section 2.2
(Release of Loan Documents) are superceded by the provisions of the
various Custodial Agreements.
36. Section 2.3(a) is hereby amended by replacing the word "Owner" in the
first, second and eighteenth lines thereof with the words "Trustee and
the Trust Fund"; by adding "if the accounts of the Servicer are FDIC
insured" after the first use of the word "Servicer" in the seventh line
thereof; and by inserting the following words at the end of clause
(b)(i) of such section: "and amounts paid by the Servicer or any other
person in respect thereof shall be deposited in the Collection Account
on the Distribution Date immediately following the Prepayment Period in
which such payoffs, installments, Prepayment Charges (or any amounts
paid by the Servicer or any person in respect thereof) were received or
incurred."
37. The second paragraph of Section 2.3(f) is hereby amended and restated
in its entirety to read as follows:
"Subject to the preceding paragraph, Servicer shall keep in
force during the term of this Agreement a fidelity bond and a policy or
policies of insurance covering errors and omissions in the performance
of Servicer's obligations under this Agreement. Such fidelity bond and
policy or policies shall be maintained with recognized insurers and
shall be in such form and amount as would permit the Servicer to be
qualified as a FNMA or FHLMC seller servicer and shall by its terms not
be cancelable without thirty days' prior written notice to the Trustee,
the Master Servicer and the NIMS Insurer. The Servicer shall be deemed
to have complied with this provision if an affiliate of the Servicer
has such errors and omissions and fidelity bond coverage and, by the
terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Servicer. On an annual basis, the Servicer
shall furnish to the Trustee, the Master Servicer and the NIMS Insurer
a copy of each such bond and insurance policy (or, in lieu thereof, a
certificate of fidelity bond coverage) if such entity so requests."
38. Section 2.3(b) is hereby amended by (i) adding the words ", Mortgage
Insurance policies" immediately after the words "Flood Insurance
policies" in clause (iv) thereof and (ii) by deleting the word "and" at
the end of clause (iv), deleting the period at the end of clause (v)
and replacing it with a semi-colon followed by the word "and", and by
adding a new clause (vi) to read as follows:
(vi) any Prepayment Interest Shortfall Amount.
39. Section 2.3(e) is hereby amended by replacing the reference to "Owner"
in the third line thereof with "Trustee and Trust Fund".
40. Section 2.3(i) is hereby amended by adding ", the Trustee" after the
word "Obligor" in the second line thereof.
41. Section 2.5 (Servicing Compensation) is hereby amended by deleting the
first two sentences thereof and by replacing the final sentence with
the following:
In the event that the Servicer deposits into the Collection
Account any Ancillary Income, the Servicer may withdraw such
amount pursuant to Section 6.2(c).
6
42. Section 3.1 (Default Management Responsibilities) is hereby amended by
(a) replacing the references to "Owner" with "Trustee and Trust Fund"
in each instance, and by adding as the last sentence thereof the
following:
"Notwithstanding anything to the contrary in this
Agreement, the Servicer shall not, (except in the case where a
default by the related Mortgagor has occurred or is, in the
reasonable judgment of the Servicer, imminent), knowingly
permit any modification, waiver or amendment of any material
term of any Mortgage Loan (including but not limited to the
interest rate, the principal balance, the amortization
schedule, or any other term affecting the amount or timing of
payments on the Mortgage Loan or the collateral therefor)
unless the Servicer shall have provided to the Master
Servicer, the NIMS Insurer and the Trustee an Opinion of
Counsel in writing to the effect that such modification,
waiver or amendment would not cause an Adverse REMIC Event.
The cost of such Opinion of Counsel shall be reimbursable
pursuant to Section 6.2(d)." The Servicer shall notify the
Loss Mitigation Advisor of any modification made to a Mortgage
Loan if the result of such modification is to increase the
current loan-to-value ratio in excess of 100%."
and (b) adding the following paragraph as the second paragraph thereof:
The Servicer or any designee of the Servicer shall not waive
any Prepayment Charge or fee with respect to any Mortgage Loan
which contains a Prepayment Charge and which prepays during
the term of the penalty. If the Servicer or its designee fails
to collect the Prepayment Charge upon any prepayment of any
Mortgage Loan which contains a Prepayment Charge, the Servicer
shall pay to the Trust Fund at such time by means of a deposit
into the Collection Account an amount equal to the Prepayment
Charge which was not collected; provided, however, the
Servicer shall not have any obligation to pay the amount of
any uncollected Prepayment Charge under this Section 3.1 if
the failure to collect such amount is the result of inaccurate
or incomplete information on the Prepayment Charge Schedule
provided by Xxxxxx Capital or Xxxxxx Brothers Bank, FSB (with
respect to its related Mortgage Loans) and which is included
as part of the Schedule of Mortgage Loans at Schedule 1-A and
Schedule 1-B attached hereto. Notwithstanding the above, the
Servicer or its designee may waive a Prepayment Charge without
remitting the amount of the foregone Prepayment Charge to the
Collection Account if (i) such waiver relates to a prepayment
which is not a result of a refinancing by the Servicer or any
of its affiliates and (ii) the Mortgage Loan is in default or
foreseeable default and such waiver (a) is standard and
customary in servicing similar mortgage loans to the Mortgage
Loans and (b) would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related
Mortgage Loan or (iii) the collection of the Prepayment Charge
would be in violation of applicable laws.
43. Section 3.2 (Foreclosure) is hereby amended by (i) replacing the first
sentence thereof with the following:
In the event that any payment due under any Mortgage
Loan remains delinquent for a period of 65 days or any other
default continues for a period of 65 days beyond the
expiration of any grace or cure period, the Servicer shall
commence foreclosure proceedings and provide notice thereof to
the Master Servicer, the NIMS Insurer and the Trustee in
writing. The Servicer shall retain an attorney and supervise
the conduct of the foreclosure proceeding.
and ; (ii) by replacing the word "Owner" in the sixth line
thereof with "the Trust Fund"; and (iii) by amending and restating the
third sentence thereof to read as follows:
7
Notwithstanding anything to the contrary contained
herein, in the event Servicer has reasonable cause to believe
that a Property is an Environmental Problem Property, Servicer
shall notify the Master Servicer and the NIMS Insurer of the
existence of the Environmental Problem Property, discuss such
problem, make a recommendation to the Master Servicer and the
NIMS Insurer regarding the handling of the property and carry
out the recommendation unless otherwise directed by the NIMS
Insurer in writing within 30 days after the Master Servicer's
and NIMS Insurer's receipt thereof (or deemed receipt) of such
notice in accordance with this Agreement. The Master Servicer
shall be provided a copy of the NIMS Insurer's instructions to
the Servicer.
44. Section 3.3 (Deed in Lieu) is hereby amended by replacing the word
"Owner" in the fourth and seventh lines thereof with "Trustee and Trust
Fund", and by amending and restating the fourth sentence thereof in its
entirety to read as follows:
Nothwithstanding anything to the contrary mentioned
herein, in connection with a deed in lieu of foreclosure, in
the event the Servicer has reasonable cause to believe that a
Property is an Environmental Problem Property as described in
Section 4.2 hereof, the Servicer shall notify the Master
Servicer and the NIMS Insurer of the existence of the
Environmental Problem Property, describe such Problem
Property, make a recommendation to the Master Servicer and the
NIMS Insurer regarding the handing of the Property and carry
out the recommendations unless otherwise directed by the NIMS
Insurer in writing within 30 days after the Master Servicer's
and NIMS Insurer's receipt thereof (or deemed receipt) of such
notice in accordance with this Agreement. The Master Servicer
shall be provided a copy of the NIMS Insurer's instructions to
the Servicer.
45. Section 3.4 (Priority; Insurance Claims) is hereby amended by replacing
the word "Owner" with "Trust Fund".
46. Section 3.5 (Bankruptcy of Obligor) is hereby amended by replacing the
word "Owner" with "Trust Fund".
47. Section 3.6 (Discounted Payoffs) is hereby amended by replacing the
word "Owner" with "Master Servicer and NIMS Insurer" in the first
sentence and with "Master Servicer or NIMS Insurer" in the second
sentence.
48. Section 4.1 (Property Management and Disposition Services) is hereby
amended by adding the following paragraphs after the first paragraph
thereto:
In the event that the Trust Fund acquires any REO
Property in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property
not later than the end of the third taxable year after the
year of its acquisition by the Trust Fund unless the Servicer
has applied for and received a grant of extension from the
Internal Revenue Service to the effect that, under the REMIC
Provisions and any relevant proposed legislation and under
applicable state law, the applicable Trust REMIC may hold REO
Property for a longer period without adversely affecting the
REMIC status of such REMIC or causing the imposition of a
federal or state tax upon such REMIC and has notified the NIMS
Insurer of such extension being granted by providing a copy of
the application and the grant of such extension to the NIMS
Insurer. If the Servicer has received such an extension, then
the Servicer shall continue to attempt to sell the REO
Property for its fair market value for such period longer than
three years as such extension permits (the "Extended Period").
If the Servicer has not received such an extension and the
Servicer is unable to sell the REO Property within the period
ending 3 months before the end of such third taxable year
after its acquisition by the Trust Fund or if the Servicer has
received such an extension, and the Servicer is unable to sell
the REO Property within the period ending three months before
the close of the Extended Period, the Servicer shall, before
the end of the three year period or the Extended Period, as
applicable, (i) purchase such REO Property at a price equal to
the REO Property's fair market value as acceptable by the NIMS
Insurer or (ii) auction the REO Property to the highest bidder
(which may be the Servicer) in an auction reasonably designed
to produce a fair price prior to the expiration of the
three-year period or the Extended Period, as the case may be.
The Trustee shall sign any document or take any other action
reasonably requested by the Servicer which would enable the
Servicer, on behalf of the Trust Fund, to request such grant
of extension.
8
Notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be
rented (or allowed to continue to be rented) or otherwise used
by or on behalf of the Trust Fund in such a manner or pursuant
to any terms that would: (i) cause such REO Property to fail
to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any Trust
REMIC to the imposition of any federal income taxes on the
income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code,
unless the Servicer has agreed to indemnify and hold harmless
the Trust Fund and the NIMS Insurer with respect to the
imposition of any such taxes.
49. Section 4.2 is hereby amended in its entirety to read as follows:
Environmental Problems. If Servicer hereafter becomes
aware that a Property is an Environmental Problem Property,
Servicer will notify Master Servicer and the NIMS Insurer of
the existence of the Environmental Problem Property.
Additionally, Servicer shall set forth in such notice a
description of such problem, a recommendation to Master
Servicer and the NIMS Insurer relating to the proposed action
regarding the Environmental Problem Property, and Servicer
shall carry out the recommendation set forth in such notice
unless otherwise directed by the NIMS Insurer in writing
within five (5) days after each of their respective receipt
(or deemed receipt) of such notice in accordance with the
terms and provisions of Section 11.3 below. The Master
Servicer shall be provided a copy of the NIMS Insurer's
instructions to the Servicer. Notwithstanding the foregoing,
Servicer shall obtain the Master Servicer's and the NIMS
Insurer's written consent to any expenditures proposed to
remediate Environmental Problem Properties or to defend any
claims associated with Environmental Problem Properties if
such expenses, in the aggregate, are expected to exceed
$100,000. Failure to provide written notice of disapproval of
the expenditure within five (5) days of receipt (or deemed
receipt) of such request for prepaid expenditures shall be
deemed an approval of such expenditure. The Master Servicer
shall be provided a copy of the NIMS Insurer's instructions to
the Servicer. If the Servicer has received reliable
instructions to the effect that a Property is an Environmental
Problem Property (e.g., Servicer obtains a broker's price
opinion which reveals the potential for such problem),
Servicer will not accept a deed-in-lieu of foreclosure upon
any such Property without first obtaining a preliminary
environmental investigation for the Property satisfactory to
the NIMS Insurer.
50. Section 5.1 (Standards of Care and Delegations of Duties) is hereby
amended by adding the following provision at the end of the penultimate
sentence of clause (b):
"; provided that the NIMS Insurer shall have
consented to such sub-servicing arrangement or termination
thereof and that the entering or termination of such
sub-servicing agreement would not result in a withdrawal or
downgrading by any Rating Agency of the rating on any Class of
Certificates or the NIM Securities to be issued in the NIMS
Transaction."
9
51. Section 5.3 (Access to Records) is hereby amended and restated in its
entirety to read as follows:
If either the Master Servicer, the Trustee or the
NIMS Insurer provide reasonable prior written notice, any such
party and its respective accountants, attorneys, or designees
may examine the Servicing Files relating to the Mortgage Loans
and the REO Properties during normal business hours of
Servicer at the Trust Fund's expense. The examining party or
parties shall provide to the Servicer a copy of any report
generated in connection with any such examination. In
addition, the Servicer shall provide to the Master Servicer,
the Trustee and the NIMS Insurer any other information,
related to the Mortgage Loans and the Properties, reasonably
requested by such parties.
52. Section 5.4 (Annual Audit) is hereby amended by changing the reference
to "April 30, 2000" in the second line thereof to "April 30, 2002" and
by changing the reference to "Owner" in the fourth line thereof to "the
Master Servicer and the NIMS Insurer".
53. A new Section 5.5 is added to the Servicing Agreement to read as
follows:
Section 5.5 Annual Officer's Certificate.
On or before April 30 of each year, beginning with
April 30, 2002, the Servicer, at its own expense, will deliver
to the Master Servicer, the NIMS Insurer and the Depositor a
Servicing Officer's certificate stating, as to each signer
thereof, that (i) a review of the activities of the Servicer
during such preceding fiscal year and of performance under
this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on
such review, the Servicer has fulfilled all its obligations
under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying
each such default known to such officers and the nature and
status thereof including the steps being taken by the Servicer
to remedy such default.
54. Section 6.2 (Remittances and Monthly Report) is hereby amended as
follows:
(1) the first sentence shall be deleted in its entirety;
(2) replacing the words "in the following priority" in
the second sentence of the first paragraph with "as
follows";
(3) paragraph (b) shall be deleted in its entirety and
replaced with the following new paragraph (b):
(b) to make payments to the Master Servicer in
the amounts and in the manner provided by
Section 6.6.
(4) by replacing the words "then Servicer may seek
reimbursement from Owner (as set forth in Section 6.4
below), it being understood that, in the case of such
reimbursement from the Collection Account, Servicer's
right thereto shall be prior to the rights of Owner"
in paragraph (d) with "then the Servicer may
reimburse itself from amounts on deposit in the
Collection Account, it being understood that the
Servicer's right to such amounts from the Collection
Account shall be prior to the rights of the Trust
Fund."
(5) new paragraphs (e) and (f) after paragraph (d) shall
be added to read as follows:
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(e) to reimburse the Servicer for Monthly Advances of the
Servicer's funds made pursuant to Section 6.8. The
Servicer's right to reimburse itself pursuant to this
subclause (e) with respect to any Mortgage Loan shall
be limited to amounts received on the related
Mortgage Loan which represent late payments of
principal and/or interest respecting which any such
advance was made, it being understood that, in the
case of any such reimbursement, the Servicer's right
to such reimbursement shall be prior to the rights of
the Trust Fund; provided, however, that in the event
that the Servicer determines in good faith that any
unreimbursed Monthly Advances will not be recoverable
from amounts representing late recoveries of payments
of principal or interest respecting the particular
Mortgage Loan as to which such Monthly Advance was
made or from Liquidation Proceeds or Insurance
Proceeds with respect to such Mortgage Loan, the
Servicer may reimburse itself for such amounts from
the Collection Account, it being understood, in the
case of any such reimbursement, that the Servicer's
right thereto shall be prior to the rights of the
Trust Fund;
(f) to reimburse the Servicer for any amounts owed
pursuant to Section 8.3(a).
(6) and by deleting the last paragraph.
55. Section 6.3 (Remittance Upon Termination) is hereby amended by
restating paragraph (b) and paragraph (c) of such Section as follows:
(b) to make payments to the Master Servicer in the
amounts and in the manner provided by Section 6.6;
and
(c) to reimburse itself for all unpaid Servicing Fees,
Monthly Advances and Servicing Advances, it being
understood that the Servicer's rights to such
reimbursement shall be prior to the rights of the
Trust Fund.
56. The parties hereto acknowledge that Section 6.4 (Billing) shall be
inapplicable to this Reconstitution Agreement.
57. The parties hereto acknowledge that Section 6.5 (Missing Document
Report) shall be superseded by the provisions of the Custodial
Agreement.
58. New Sections 6.6, 6.7, 6.8, 6.9, 6.10 and 6.11 are hereby added to the
Servicing Agreement to read as follows:
Section 6.6. Remittances.
On each Distribution Date the Servicer shall remit on
a scheduled/scheduled basis by wire transfer of immediately
available funds to the Master Servicer (a) all amounts
deposited in the Collection Account as of the close of
business on the last day of the related Collection Period (net
of charges against or withdrawals from the Collection Account
pursuant to Section 6.2) (other than payments of principal due
on or before October 1, 2001), plus (b) all Monthly Advances,
if any, which the Servicer is obligated to make pursuant to
Section 6.8, minus (c) any amounts attributable to Principal
Prepayments, Liquidation Proceeds, insurance proceeds,
condemnation proceeds or REO Property disposition proceeds
received after the applicable Collection Period, which amounts
shall be remitted on the following Distribution Date, plus (d)
any additional interest required to be deposited in the
Collection Account in connection with a Prepayment Interest
Shortfall Amount in accordance with Section 2.3(b)(vi), and
minus (e) any amounts attributable to Monthly Payments
collected but due on a due date or dates subsequent to the
first day of the month in which such Distribution Date occurs,
which amounts shall be remitted on the Distribution Date or
Dates next succeeding the Collection Period for such amounts.
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With respect to any remittance received by the Master
Servicer after the Business Day on which such payment was due,
the Servicer shall pay to the Master Servicer interest on any
such late payment at an annual rate equal to the Federal Funds
Rate, adjusted as of the date of each change, but in no event
greater than the maximum amount permitted by applicable law.
Such interest shall be deposited in the Collection Account by
the Servicer on the date such late payment is made and shall
cover the period commencing with the day following the
Distribution Date and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be
remitted along with the distribution payable on the next
succeeding Distribution Date. The payment by the Servicer of
any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
Section 6.7 Statements to Master Servicer.
Not later than the tenth calendar day of each month
(or if such tenth calendar day is not a Business Day, the
immediately preceding Business Day of each month), the
Servicer shall furnish to the Master Servicer and the NIMS
Insurer (a) a monthly remittance advice containing such
information and in a format mutually agreed between the
Servicer and the Master Servicer (and acceptable to the NIMS
Insurer) for the period ending on the last day of the
preceding calendar month and (b) all such information required
pursuant to clause (a) above on a magnetic tape or other
similar media reasonably acceptable to the Master Servicer and
the NIMS Insurer.
Such monthly remittance advice shall also be
accompanied with a supplemental report provided to the Master
Servicer, the NIMS Insurer and the Seller which includes on an
aggregate basis for the previous Collection Period (i) the
amount of claims filed, (ii) the amount of any claim payments
made, (iii) the amount of claims denied or curtailed and (iv)
policies cancelled with respect to those Mortgage Loans
covered by any PMI Insurance Policy purchased by or for the
Trust. The Master Servicer will convert such data into a
format acceptable to the Trustee and the NIMS Insurer and
provide monthly reports to the Trustee and the NIMS Insurer
pursuant to the Trust Agreement; provided, however,
notwithstanding anything to the contrary contained in either
of such master primary mortgage insurance policies, the
Servicer shall not be required to submit any supplemental
reports including the foregoing data with respect to such
policies until a reporting date that is at least 15 days after
the Servicer has received sufficient loan level detail
information from the Depositor to appropriately code its
servicing system in accordance with such policy's
requirements.
The Servicer shall provide the Master Servicer and
the NIMS Insurer with such information available to it
concerning the Mortgage Loans as is necessary for the Master
Servicer to prepare the Trust Fund's federal income tax return
as the Master Servicer may reasonably request from time to
time.
Section 6.8 Monthly Advances by Servicer.
On the Business Day immediately preceding each
Distribution Date, the Servicer shall deposit in the
Collection Account from its own funds or from amounts held for
future distribution an amount equal to all Monthly Payments
which were due on the Mortgage Loans during the applicable
Collection Period and which were delinquent at the close of
business on the immediately preceding Determination Date. Any
amounts held for future distribution and so used shall be
replaced by the Servicer by deposit in the Collection Account
on or before any future Distribution Date if funds in the
Collection Account on such Distribution Date shall be less
than remittances to the Master Servicer required to be made on
such Distribution Date. In no event shall the preceding
sentence be construed as limiting the Servicer's right to (i)
pass through late collections on the related Mortgage Loans in
lieu of making Monthly Advances or (ii) reimburse itself for
such Monthly Advances from late collections on the related
Mortgage Loans.
12
The Servicer shall make Monthly Advances through the
Distribution Date immediately preceding the distribution of
all Liquidation Proceeds and other payments or recoveries
(including insurance proceeds and condemnation proceeds) with
respect to the related Mortgage Loans.
Section 6.9 Compensating Interest.
On the Business Day before the Distribution Date, the
Servicer shall deposit in the Collection Account the
Prepayment Interest Shortfall Amount with respect to each
Principal Prepayment, if any, for the month of such
distribution. Such deposit shall be made from the Servicer's
own funds, without reimbursement therefor up to a maximum
amount per month of the Servicing Fee actually received for
such month for the Mortgage Loans.
Section 6.10 Purchase of Distressed Mortgage Loans.
The NIMS Insurer may, at its option, purchase a
Distressed Mortgage Loan; provided, however, prior to any such
purchase, the Servicer shall be required to continue to make
Monthly Advances with respect to such Distressed Mortgage
Loans pursuant to Section 6.8 unless it has deemed such
Monthly Advances non-recoverable. Any such purchase shall be
accomplished by remittance to the Master Servicer of the
Purchase Price for the Distressed Mortgage Loan for deposit
into the Collection Account established by the Master Servicer
pursuant to the Trust Agreement. The Trustee and the Servicer
shall immediately effectuate the conveyance of the purchased
Distressed Mortgage Loan to the NIMS Insurer exercising the
purchase option, including prompt delivery of the Servicing
File and all related documentation to the applicable NIMS
Insurer.
Section 6.11 Servicing and Administration of the PMI Policies.
(a) The Servicer shall take all such actions on
behalf of the Trustee as are necessary to service, maintain
and administer the PMI Policies and to perform and enforce the
rights under such Policies for its own account. Except as
expressly set forth herein, the Servicer shall have full
authority on behalf of the Trust to do anything it reasonably
deems appropriate or desirable in connection with the
servicing, maintenance and administration of the PMI Policies.
The Servicer shall not take, or permit any subservicer to
modify or otherwise permit an assumption of a Mortgage Loan
covered by a PMI Policy or take any other action with respect
to such Mortgage Loan which would result in non-coverage under
the applicable PMI Policy of any loss which, but for the
actions of the Servicer or subservicer, would have been
covered thereunder. To the extent coverage is available, the
Servicer shall keep or cause to be kept in full force and
effect the PMI Policies for as long as any Certificates are
outstanding. The Servicer shall cooperate with the Qualified
Insurers issuing the PMI Policies and shall use its best
efforts to furnish all reasonable aid, evidence and
information in the possession of the Servicer to which the
Servicer has access with respect to any Mortgage Loan;
provided, however, notwithstanding anything to the contrary
contained in the PMI Policies, the Servicer shall not be
required to submit any reports to the Qualified Insurers
issuing such policies until a reporting date that is at least
15 days after the Servicer has received sufficient loan level
information from Xxxxxx Capital or Xxxxxx Brothers Bank, FSB
(with respect to its related Mortgage Loans) to appropriately
code its servicing system in accordance with each of such
Qualified Insurer's requirements.
13
(b) The Servicer shall deposit into the Collection
Account pursuant to Section 6.3 hereof all Insurance Proceeds
received from the PMI Policies.
(c) Notwithstanding the provisions of (a) and (b)
above, the Servicer shall not take any action in regard to the
PMI Policies inconsistent with the rights and interests of the
Trustee, the NIMS Insurer or the Certificateholders under this
Agreement.
(d) The Trustee shall furnish the Servicer with any
powers of attorney and other documents (within fifteen (15)
days upon request from the Servicer) in form as provided to it
necessary or appropriate to enable the Servicer to service and
administer the PMI Policies; provided, however, that the
Trustee shall not be liable for the actions of the Servicer
under such powers of attorney.
59. Section 7.1(e) (Litigation) is hereby amended by adding "in any one
instance or in the aggregate," after "if adversely determined,".
60. A new paragraph is hereby added at the end of Section 7.1
(Representations and Warranties) to read as follows:
It is understood and agreed that the representations
and warranties set forth in Section 7.1 shall survive the
engagement of the Servicer to perform the servicing
responsibilities hereunder and the delivery of the Servicing
Files to the Servicer and shall inure to the benefit of the
Trustee and the Trust Fund. Upon discovery by either the
Servicer, the Master Servicer, the NIMS Insurer or the Trustee
of a breach of any of the foregoing representations and
warranties which materially and adversely affects the ability
of the Servicer to perform its duties and obligations under
this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property
or the interest of the Trustee or the Trust Fund, the party
discovering such breach shall give prompt written notice to
the other.
Within 60 days of the earlier of either discovery by
or notice to the Servicer of any breach of a representation or
warranty set forth in Section 7.1 which materially and
adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage
Loans, the Mortgaged Property or the priority of the security
interest on such Mortgaged Property, the Servicer shall use
its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Servicer
shall, at the option of the Trustee or the NIMS Insurer,
assign the Servicer's rights and obligations under this
Agreement (or respecting the affected Loans) to a successor
Servicer selected by the Trustee with the prior consent and
approval of the Master Servicer and the NIMS Insurer. Such
assignment shall be made in accordance with Section 10.4.
In addition, the Servicer shall indemnify (from its
own funds) the Trustee, the Trust Fund, the NIMS Insurer and
the Master Servicer and hold each of them harmless against any
costs resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the
Servicer's representations and warranties contained in this
Agreement. It is understood and agreed that the remedies set
forth in this Section 7.1 constitute the sole remedies
hereunder of the Master Servicer, the NIMS Insurer, the Trust
Fund and the Trustee respecting a breach of the foregoing
representations and warranties. The foregoing shall not limit,
however, any remedies available to the Master Servicer, the
Trustee, the NIMS Insurer or the Trust Fund available pursuant
to any other agreement related hereto or to the insurance
policy pursuant to which the NIM Securities in the NIMS
Transaction are insured.
14
Any cause of action against the Servicer relating to
or arising out of the breach of any representations and
warranties made in Section 7.1 shall accrue upon (i) discovery
of such breach by the Servicer or notice thereof by the
Trustee, the NIMS Insurer or Master Servicer to the Servicer,
(ii) failure by the Servicer to cure such breach within the
applicable cure period, and (iii) demand upon the Servicer by
the Trustee, the NIMS Insurer or the Master Servicer for
compliance with this Agreement.
61. Section 8.2 (Servicer's Indemnity of Owner) is hereby amended by
changing the word "Owner" to "Master Servicer, Trustee, the Trust Fund
and the NIMS Insurer" each time it appears therein.
62. Section 8.3 (Owner's Indemnity of Servicer; Limitation on Liability of
Servicer) is hereby amended by (i) replacing Section 8.3(a) with the
following:
The Servicer and any director or officer or employee
or agent of the Servicer shall be indemnified by the Trust
Fund 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 incurred by reason of its willful misfeasance, bad
faith or negligence in the performance of duties hereunder or
by reason of its reckless disregard of obligations and duties
hereunder.
, (ii) deleting the fifth and sixth sentences of Section 8.3(d), (iii)
changing the word "Owner" in Section 8.3(b) to "Master Servicer,
Trustee, the Trust Fund or the NIMS Insurer", and (iv) by amending and
restating Section 8.3(d) in its entirety to read as follows:
It is understood and agreed that during the term of
this Agreement, the Master Servicer and the Trustee may have
access to certain Servicer's confidential and proprietary
information, including the Servicing Files and certain other
information relating to the Mortgage Loans which the Servicer
may grant access to in its sole and absolute discretion the
"Confidential Information".
The term "Confidential Information" does not include
information which becomes generally available to the public
other than as a result of disclosure by the Master Servicer,
the Trustee or their representatives, but shall be deemed to
include any passwords or identification codes, access codes,
modem dial-up numbers and similar items. The Master Servicer
and the Trustee shall keep confidential and shall not divulge
to any party other than an officer, employee or agent of
Master Servicer or the Trustee who has a need-to-know, without
Servicer's prior written consent, any Confidential Information
except such limited Confidential Information as may be
necessary to disclose in connection with a Servicer
Termination for cause. Additionally, the Master Servicer and
the Trustee shall only permit its officers, employees or
agents to perform procedures on Servicer's system which are
specifically authorized by Servicer. The Confidential
Information shall not be used or duplicated by Master Servicer
or the Trustee for any purpose other than those purposes
specified pursuant to the Trust Agreement or this Agreement.
Each of the Master Servicer and the Trustee further agrees
that the Confidential Information (other than the Confidential
Information released pursuant to the Trust Agreement or this
Agreement) will not be used by it or its directors, officers,
employees, invitees, agents or representatives, including, but
not limited to outside counsel, in any way detrimental to
Servicer, as determined in the reasonable judgment of
Servicer, and in no event shall the Confidential Information
be used without the prior written consent of the Servicer.
15
In the event that Master Servicer or the Trustee are
requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any
Confidential Information, it is agreed that Master Servicer
and the Trustee will provide Servicer with prompt notice of
such request(s) and shall fully cooperate with the Servicer to
seek an appropriate protective order and/or waive compliance
with the provisions of this subsection, in Servicer's sole and
absolute discretion. Each of the Master Servicer and the
Trustee acknowledge that Servicer will incur irreparable
damage if Master Servicer or the Trustee or their respective
directors, officers, employees, invitees, agents or
representatives breaches or threatens to breach any of the
provisions of this subsection. Accordingly, each of the Master
Servicer and the Trustee agrees to indemnify the Servicer
from, and hold it harmless against, any loss, liability or
expense arising in respect of any breach by the Master
Servicer or the Trustee of their respective obligations under
this subsection. This indemnity obligation shall survive the
termination or discharge of this Flow Servicing Agreement, the
resignation or removal of the Servicer, and the termination of
the Trust Further, if any of the foregoing parties breaches or
threatens to breach any of the provisions of this section,
then Servicer shall be entitled, without prejudice, to all the
rights and remedies available to it, including a temporary
restraining order and an injunction restraining any breach of
the provisions of this subsection (without any bond or other
security being required therefor).
63. Section 9.1 (Events of Default) is hereby amended as follows:
(a) by substituting the words "the Master Servicer or
the NIMS Insurer" for the word "Owner" in clause (a) and
clause (b) thereof; and
(b) by substituting the words "the Master Servicer
and the NIMS Insurer" for the word "Owner" in clause (f)
thereof.
64. The parties hereto acknowledge that the remedies set forth in Section
10.1(b) may be exercised by either the Master Servicer or Trustee on
behalf of the Trust Fund and shall be exercised by the Master Servicer
at the instructions of the NIMS Insurer.
65. A new paragraph is hereby added as the final paragraph of Section
10.1(b) to read as follows:
By a written notice, the Trustee and the Master
Servicer (with the prior written consent of the NIMS Insurer)
may waive any default by the Servicer in the performance of
its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist,
and any Event of Default under Section 9.1 arising therefrom
shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except
to the extent expressly so waived.
66. Section 10.1(b) is hereby amended by adding the words ", the NIMS
Insurer or the Trustee" after the word "Owner" in the third and twelfth
lines thereof.
67. Section 10.1(c) is hereby amended in its entirety to read as follows:
16
(c) The Seller may terminate the rights and
obligations of the Servicer under this Agreement without
cause. Any such termination shall be with 30 days' prior
notice, in writing and delivered to the Trustee, the Master
Servicer, the NIMS Insurer and the Servicer by registered mail
and shall require the written consent of the Master Servicer,
the Trustee and NIMS Insurer. The Servicer shall comply with
the termination procedures set forth in Section 10.4 hereof.
The Master Servicer or the Trustee shall have no right to
terminate the Servicer pursuant to this Section 10.1(c). In
the event of a termination pursuant to this Section 10.1(c),
the Seller shall (i) appoint a successor servicer pursuant to
Section 10.4 and (ii) pay to the Servicer a sum, as liquidated
damages, from its own funds without reimbursement, equal to
the product of (a) two, (b) the annual servicing fee rate, and
(c) the aggregate unpaid principal balance of the Mortgage
Loans for which this Agreement is going to be terminated as of
the last day of the month following receipt of such notice of
termination. In connection with any such termination by the
Seller pursuant to this Section 10.1(c), the Seller will be
responsible for reimbursing the Servicer for all unreimbursed
Servicing Advances, Servicing Fees and Monthly Advances within
fifteen days following the date of such termination without
any right of reimbursement from the Trust Fund.
68. Section 10.1(d) is hereby deleted in its entirety.
69. Section 10.2 is hereby amended by changing the word "Owner" to "Master
Servicer, the Trustee, the Seller and the NIMS Insurer."
70. Section 10.3 (Servicer Not to Resign) is hereby amended by changing the
word "Owner" to the "Master Servicer, the Trustee and the NIMS
Insurer", except in the last sentence thereof where the word "Owner"
shall be replaced by the word "Master Servicer".
71. The following new paragraphs are hereby added to Section 10.4
immediately preceding the existing paragraph of Section 10.4, to read
as follows:
Within 90 days of the termination of the Servicer's
responsibilities and duties under this Agreement (a) pursuant
to Sections 10.1(b) or 10.3 (except 10.3(ii)), the Master
Servicer shall, in accordance with the provisions of the Trust
Agreement, (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor acceptable to the NIMS
Insurer (which acceptance will not be unreasonably withheld)
and otherwise meeting the eligibility requirements of this
Agreement and which shall succeed to all rights and assume all
of the responsibilities, duties and liabilities of the
Servicer under this Agreement; or (b) pursuant to Section
10.1(c), the Seller shall appoint a successor acceptable to
the NIMS Insurer (which acceptance will not be unreasonably
withheld) which shall succeed to all rights and assume all of
the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of
the Servicer's responsibilities, duties and liabilities under
this Agreement; provided, however, the obligation of the
Master Servicer or the successor servicer to make Monthly
Advances not made by the defaulting Servicer shall be
effective immediately upon the termination of the defaulting
Servicer. Any successor to the Servicer shall be subject to
the approval of the Master Servicer, the Seller, the NIMS
Insurer and each Rating Agency (as such term is defined in the
Trust Agreement). Each Rating Agency must deliver to the
Trustee and the NIMS Insurer a letter to the effect that such
transfer of servicing will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of
the Certificates or the NIM Securities to be issued in the
NIMS Transaction. In addition, with respect to any FHA Loans
serviced hereunder, the Servicer shall provide notice of such
change in servicers to HUD on HUD Form 92080 or such other
form as prescribed by HUD, at least 10 days after such
transfer of servicing. In connection with such appointment and
assumption, the Master Servicer or the Seller, as applicable,
may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Servicer
under this Agreement. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the
Servicer shall discharge such duties and responsibilities
during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to
exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or
removal of the Servicer pursuant to the aforementioned
sections shall not become effective until a successor shall be
appointed pursuant to this Section 10.4 and shall in no event
relieve the Servicer of the representations and warranties
made pursuant to Sections 7.1 and the remedies available to
the Trustee under Section 7.1, it being understood and agreed
that the provisions of such Section 7.1 shall be applicable to
the Servicer notwithstanding any such resignation or
termination of the Servicer, or the termination of this
Agreement.
17
Within a reasonable period of time, but in no event
longer than within 30 days of the appointment of a successor
entity, the Servicer shall prepare, execute and deliver to the
successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and
do or cause to be done all other acts or things necessary or
appropriate to effect the purposes of such notice of
termination. The Servicer shall cooperate with the Trustee,
the NIMS Insurer, the Master Servicer, as applicable, and such
successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of
servicing responsibilities to the successor Servicer,
including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at
the time be credited by the Servicer to the Collection Account
or any Escrow Account or thereafter received with respect to
the Loans. In the event the Servicer is terminated pursuant to
Section 10.1(c), the Seller shall be responsible for payment
from its own funds without reimbursement of any out-of-pocket
costs incurred by the Servicer and the Master Servicer in
connection with the transfer of the Mortgage Loans to a
successor servicer.
Any successor appointed as provided herein shall
execute, acknowledge and deliver to the Trustee, the NIMS
Insurer, the Servicer and the Master Servicer an instrument
(i) accepting such appointment, wherein the successor shall
make the representations and warranties set forth in Section
7.1 and (ii) an assumption of the due and punctual performance
and observance of each covenant and condition to be performed
and observed by the Servicer under this Agreement, whereupon
such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities
of the Servicer, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the
Servicer or termination of this Agreement pursuant to Sections
10.1 or 10.3 shall not affect any claims that the Master
Servicer, the NIMS Insurer or the Trustee may have against the
Servicer arising out of the Servicer's actions or failure to
act prior to any such termination or resignation.
The Servicer shall deliver within three (3) Business
Days to the successor Servicer the funds in the Collection
Account and Escrow Account and all Loan Documents and related
documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be
required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such,
the Servicer shall notify the Trustee, the Master Servicer and
the NIMS Insurer of such appointment in accordance with the
notice procedures set forth herein.
18
Except as otherwise provided in this Agreement, all
reasonable costs and expenses incurred in connection with any
transfer of servicing hereunder as a result of termination for
cause or resignation of the Servicer, including, without
limitation, the costs and expenses of the Master Servicer or
any other Person in appointing a successor servicer, or of the
Master Servicer in assuming the responsibilities of the
Servicer hereunder, or of transferring the Servicing Files and
the other necessary data, to the successor servicer shall be
paid by the terminated or resigning Servicer from its own
funds without reimbursement.
72. The provisions of Article XI (Reconstitution) are superceded by this
Agreement.
73. Section 12.1 (Successors or Assigns: No Third Party Beneficiaries) is
hereby amended by deleting "No Third Party Beneficiaries" in the
heading of such Section and by deleting the second sentence thereof in
its entirety.
74. Section 12.2 (Choice of Law) shall be deleted in its entirety.
75. Section 12.4 (Entire Agreement; Amendments; Waivers) is hereby amended
by replacing "the party against whom such amendment is sought to be
enforced" with "the Servicer and Xxxxxx Capital or Xxxxxx Brothers
Bank, FSB (with respect to its related Mortgage Loans), with the
written consent of the Master Servicer, the Trustee and the NIMS
Insurer", by deleting the third sentence thereof and replacing it with
"The Master Servicer, may, with the consent of the NIMS Insurer by
written notice to the Servicer, extend the time for or waive the
performance of any of the obligations of the Servicer hereunder," and
by adding the following sentence at the end thereof: "The party
requesting such amendment shall, at its own expense, provide the
Trustee, the NIMS Insurer, the Master Servicer and either Xxxxxx
Capital or Xxxxxx Brothers Bank, FSB (with respect to its related
Mortgage Loans) with an Opinion of Counsel that such amendment is
permitted under the terms of this Agreement, the Servicer has complied
with all applicable requirements of this Agreement, and such Amendment
will not materially adversely affect the interest of the
Certificateholders in the Mortgage Loans or the NIM Securities to be
issued in the NIMS Transaction."
76. Section 12.5 (No Joint Venture; Limited Agency) is hereby amended by
replacing the word "Owner" with "the Trustee, the Trust Fund, the
Master Servicer, the NIMS Insurer, Xxxxxx Capital or Xxxxxx Brothers
Bank, FSB (with respect to its related Mortgage Loans)" in each
instance.
77. New Sections 12.10 (Intended Third Party Beneficiaries), is added to
the Servicing Agreement to read as follows:
19
Section 12.10 Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary,
the parties to this Agreement agree that it is appropriate, in
furtherance of the intent of such parties as set forth herein,
that the Trustee and the NIMS Insurer receive the benefit of
the provisions of this Agreement as intended third party
beneficiaries of this Agreement to the extent of such
provisions. The Servicer shall have the same obligations to
the Trustee and the NIMS Insurer as if they were parties to
this Agreement, and the Trustee and the NIMS Insurer shall
have the same rights and remedies to enforce the provisions of
this Agreement as if they were parties to this Agreement. The
Servicer shall only take direction from the Master Servicer
(if direction by the Master Servicer is required under this
Agreement) unless otherwise directed by this Agreement).
Notwithstanding the foregoing, all rights and obligations of
the Master Servicer and the Trustee hereunder (other than the
right to indemnification and the indemnification obligations)
shall terminate upon termination of the Trust Fund pursuant to
the Trust Agreement and all rights of the NIMS Insurer set
forth in this Agreement (other then the right of
indemnification) shall exist only so long as the NIM
Securities issued pursuant to the NIMS Transaction remain
outstanding or the NIMS Insurer is owed amounts in respect of
its guaranty of payment of such NIM Securities.
20
Exhibit B
Trust Agreement for ARC 2001-BC6
1
Exhibit C
Xxxxxx Capital Flow Servicing Agreement
1
Exhibit D
ARC 2001-BC6 Trust Agreement
1
Schedule I
Schedule of Bank Mortgage Loans
(Including Prepayment Charge Schedule)
1
Schedule II
Schedule of Xxxxxx Capital Mortgage Loans
(Including Prepayment Charge Schedule)
1
Schedule III
Mortgage Loan Schedule
1
Schedule IV
(isolating those Mortgage Loans covered by a PMI Policy
and identifying the related Qualified Insurer)
1
