EXHIBIT 4
EXECUTION COPY
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GS MORTGAGE SECURITIES CORP.,
Depositor,
OCWEN FEDERAL BANK FSB,
Servicer,
WMC MORTGAGE CORP.,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of September 1, 2002
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GSAMP TRUST 2002-WMC1
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2002-WMC1
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions......................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.....................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..................
Section 2.03 Representations, Warranties and Covenants of the Responsible
Party and the Servicer..........................................
Section 2.04 Delivery of Opinion of Counsel in Connection with Substitution;
Non-Qualified Mortgages.........................................
Section 2.05 Execution and Delivery of Certificates...........................
Section 2.06 REMIC Matters....................................................
Section 2.07 Representations and Warranties of the Depositor..................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans...............................
Section 3.02 Subservicing Agreements between the Servicer and Subservicers....
Section 3.03 Successor Subservicers...........................................
Section 3.04 Liability of the Servicer........................................
Section 3.05 No Contractual Relationship between Subservicers and the Trustee.
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee..
Section 3.07 Collection of Certain Mortgage Loan Payments.....................
Section 3.08 Subservicing Accounts............................................
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts........................................................
Section 3.10 Collection Account...............................................
Section 3.11 Withdrawals from the Collection Account..........................
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account............................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage...............................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements........
Section 3.15 Realization upon Defaulted Mortgage Loans........................
Section 3.16 Release of Mortgage Files........................................
Section 3.17 Title, Conservation and Disposition of REO Property..............
Section 3.18 Notification of Adjustments......................................
Section 3.19 Access to Certain Documentation and Information Regarding the
Mortgage Loans..................................................
Section 3.20 Documents, Records and Funds in Possession of the Servicer to Be
Held for the Trustee............................................
Section 3.21 Servicing Compensation...........................................
Section 3.22 Annual Statement as to Compliance................................
Section 3.23 Annual Independent Public Accountants' Servicing Statement;
Financial Statements............................................
Section 3.24 Trustee to Act as Servicer.......................................
Section 3.25 Compensating Interest............................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.........................
Section 3.27 [Reserved].......................................................
Section 3.28 Excess Reserve Fund Account; Distribution Account................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances.........................................................
Section 4.02 Priorities of Distribution.......................................
Section 4.03 Monthly Statements to Certificateholders.........................
Section 4.04 Certain Matters Relating to the Determination of LIBOR...........
Section 4.05 Allocation of Applied Realized Loss Amounts......................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.................................................
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates....................................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates................
Section 5.04 Persons Deemed Owners............................................
Section 5.05 Access to List of Certificateholders' Names and Addresses........
Section 5.06 Maintenance of Office or Agency..................................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.........
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.........
Section 6.03 Limitation on Liability of the Depositor, the Servicer and Others
Section 6.04 Limitation on Resignation of the Servicer........................
Section 6.05 Additional Indemnification by the Servicer; Third Party Claims...
ARTICLE VII
DEFAULT
Section 7.01 Events of Default................................................
Section 7.02 Trustee to Act; Appointment of Successor.........................
Section 7.03 Notification to Certificateholders...............................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee............................................
Section 8.02 Certain Matters Affecting the Trustee............................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans............
Section 8.04 Trustee May Own Certificates.....................................
Section 8.05 Trustee's Fees and Expenses......................................
Section 8.06 Eligibility Requirements for the Trustee.........................
Section 8.07 Resignation and Removal of the Trustee...........................
Section 8.08 Successor Trustee................................................
Section 8.09 Merger or Consolidation of the Trustee...........................
Section 8.10 Appointment of Co-Trustee or Separate Trustee....................
Section 8.11 Tax Matters......................................................
Section 8.12 Periodic Filings.................................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account............
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans...
Section 9.02 Final Distribution on the Certificates...........................
Section 9.03 Additional Termination Requirements..............................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment........................................................
Section 10.02 Recordation of Agreement; Counterparts...........................
Section 10.03 Governing Law....................................................
Section 10.04 Intention of Parties.............................................
Section 10.05 Notices..........................................................
Section 10.06 Severability of Provisions.......................................
Section 10.07 Assignment; Sales; Advance Facilities............................
Section 10.08 Limitation on Rights of Certificateholders.......................
Section 10.09 Inspection and Audit Rights......................................
Section 10.10 Certificates Nonassessable and Fully Paid........................
Section 10.11 Waiver of Jury Trial.............................................
Section 10.12 Limitation of Damages............................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties of the Responsible Party as to the
Mortgage Loans
Schedule IV Representations and Warranties as to the Responsible Party
Schedule V Representations and Warranties of the Depositor as to the
Mortgage Loans
EXHIBITS
Exhibit A Form of Class A, Class M, Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Servicing Performance Standards
Exhibit M Servicer Reporting Requirements
Exhibit N Form of Certification to be Provided with Form 10-K
Exhibit O Form of Certification to be Provided to Depositor
Exhibit P July Purchase Agreement
Exhibit Q August Purchase Agreement
THIS POOLING AND SERVICING AGREEMENT, dated as of September 1, 2002,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), OCWEN FEDERAL BANK FSB, a federally chartered savings bank, as
servicer (the "Servicer"), WMC MORTGAGE CORP., a California corporation, as
responsible party (the "Responsible Party"), and DEUTSCHE BANK NATIONAL TRUST
COMPANY, a national banking association, as trustee (the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that two segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising two REMICs
(each, a "REMIC" or, in the alternative, the Lower Tier REMIC and the Upper Tier
REMIC, respectively). The Class X Certificate and each Class of Offered
Certificates (other than the right of each Class of Offered Certificates to
receive Basis Risk Carry Forward Amounts), represents ownership of a regular
interest in the Upper Tier REMIC for purposes of the REMIC Provisions. The Class
R Certificate represents ownership of the sole class of residual interest in
each of the Lower Tier REMIC and the Upper Tier REMIC for purposes of the REMIC
Provisions. The Startup Day for each REMIC described herein is the Closing Date.
The latest possible maturity date for each Certificate is the latest date
referenced in Section 9.01. The Upper Tier REMIC shall hold as assets the
several classes of uncertificated Lower Tier Regular Interests, set out below.
Each such Lower Tier Regular Interest is hereby designated as a regular interest
in the Lower Tier REMIC. The Class LT-A-1, Class LT-A-2A, Class LT-A-2B, Class
LT-M-1, Class LT-M-2, Class LT-B-1 and Class LT-B-2 are hereby designated the LT
Accretion Directed Classes (the "LT Accretion Directed Classes"). The Class P
Certificate represents beneficial ownership of the Prepayment Penalties, each
Offered Certificate represents a beneficial ownership of a regular interest in
the Upper Tier REMIC and the right to receive Basis Risk Carry Forward Amounts
and the Class X Certificate represents beneficial ownership of a regular
interest in the Upper Tier REMIC and the Excess Reserve Fund Account, which
portions of the Trust Fund shall be treated as a grantor trust.
LOWER TIER LOWER TIER INTEREST CORRESPONDING UPPER
CLASS DESIGNATION RATE INITIAL LOWER TIER PRINCIPAL AMOUNT TIER REMIC CLASS
----------------- ------------------- ----------------------------------- ----------------
Class LT-A-1 (1) 1/2 initial Corresponding Upper Tier REMIC A-1
initial principal balance
Class LT-A-2A (1) 1/2 initial Corresponding Upper Tier REMIC A-2A
initial principal balance
Class LT-A-2B (1) 1/2 initial Corresponding Upper Tier REMIC A-2B
initial principal balance
Class LT-M-1 (1) 1/2 initial Corresponding Upper Tier REMIC M-1
initial principal balance
Class LT-M-2 (1) 1/2 initial Corresponding Upper Tier REMIC M-2
initial principal balance
Class LT-B-1 (1) 1/2 initial Corresponding Upper Tier REMIC B-1
initial principal balance
Class LT-B-2 (1) 1/2 initial Corresponding Upper Tier REMIC B-2
initial principal balance
Class LT-Accrual (1) 1/2 Pool Balance plus 1/2 Overcollateralized
Amount, less $2,000
Class LT-Group I (2) $ 1,258.31 (4)
Class LT-Group II (3) $ 741.69 (4)
Class LT-R (5) (5)
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
(2) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group I Cap.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) equal to the Loan Group II
Cap.
(4) On the Closing Date, the Initial Lower Tier Principal Amount of the Class
LT-Group I Interest shall be $1,258.30948984, and the Initial Lower Tier
Principal Amount of the Class LT-Group II Interest shall be $741.69051016.
For all future Distribution Dates, the principal balances of these Lower
Tier Regular Interests shall be rounded to eight decimal places.
(5) The Class LT-R Interest is the sole class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than Prepayment Penalties, the Excess Reserve Fund
Account, and the Lower Tier Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of the LT Accretion Directed Classes (each such Class will be reduced
by an amount equal to 50% of any increase in the Overcollateralized Amount that
is attributable to a reduction in the principal balance of its Corresponding
Class) and will be accrued and added to the principal balance of the Class LT
Accrual. On each Distribution Date, the increase in the principal balance of the
Class LT Accrual may not exceed interest accruals for such Distribution Date for
the Class LT Accrual. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class LT Accrual
for such Distribution Date, the excess for such Distribution Date (accumulated
with all such excesses for all prior Distribution Dates) will be added to any
increase in the Overcollateralized Amount for purposes of determining the amount
of interest accrual on the Class LT Accrual payable as principal on the LT
Accretion Directed Classes on the next Distribution Date pursuant to the first
sentence of this paragraph. All payments of scheduled principal and prepayments
of principal generated by the Mortgage Loans shall be allocated 50% to (i) the
Class LT-Accrual, the Class LT-Group I Interest and the Class LT-Group II
Interest (and further allocated between these Lower Tier Regular Interests in
the manner described below), and (ii) 50% to the LT Accretion Directed Classes
(principal payments shall be allocated among such LT Accretion Directed Classes
in an amount equal to 50% of the principal amounts allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class X Certificates that result in the reduction in
the Overcollateralized Amount shall be allocated to the Class LT Accrual (until
paid in full). Realized Losses shall be applied so that after all distributions
have been made on each Distribution Date (i) the principal balances of each of
the LT Accretion Directed Classes is equal to 50% of the principal balance of
their Corresponding Class, and (ii) the Class LT-Accrual, the Class LT-Group I
Interest and the Class LT-Group II Interest (and further allocated between these
Lower Tier Regular Interests in the manner described below) is equal to 50% of
the aggregate principal balance of the Mortgage Pool plus 50% of the
Overcollateralized Amount. As between the Class LT Accrual, the Class LT-Group I
Interest and the Class LT-Group II Interest, all payments of scheduled principal
and prepayments of principal generated by the Mortgage Loans, and all Realized
Losses, allocable to such Lower Tier Regular Interests shall be allocated (i) to
the Class LT Accrual in the same proportion that the then outstanding principal
balance of such Lower Tier Regular Interest bears to the then outstanding
aggregate principal balance of the Class LT-Accrual, the Class LT-Group I
Interest and the Class LT-Group II Interest and (ii) the remainder to each of
the Class LT-Group I Interest and the Class LT-Group II Interest in the same
proportion that the then outstanding aggregate Stated Principal Balance of the
Mortgage Loans in the related loan group bears to the then outstanding aggregate
Stated Principal Balance of the Mortgage Loans.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper Tier REMIC.
UPPER TIER
INTEREST RATE INITIAL UPPER TIER
AND PRINCIPAL AMOUNT
CORRESPONDING AND CORRESPONDING
UPPER TIER CLASS CLASS CERTIFICATE CORRESPONDING
CLASS DESIGNATION PASS-THROUGH RATE BALANCE CERTIFICATE
----------------- ----------------- ------- -----------
Class A-1 (1) $233,053,000 Class A-1(7)
Class A-2A (2) $ 87,067,000 Class A-2A(7)
Class A-2B (3) $ 50,303,000 Class A-2B(7)
Class M-1 (4) $ 34,298,000 Class M-1(7)
Class M-2 (4) $ 25,153,000 Class M-2(7)
Class B-1 (4) $ 16,006,000 Class B-1(7)
Class B-2 (4) $ 6,859,665 Class B(7)
Class X (5) (5) Class X(5)
Class UT-R (6) Class R
(1) The Class A-1 Interest will bear interest during its initial Interest
Accrual Period at 2.19% per annum. The Class A-1 Interest will bear
interest during each Interest Accrual Period thereafter at a per annum
rate equal to (a) on or prior to the Optional Termination Date, the least
of (i) LIBOR plus 0.370%, (ii) the Loan Group I Cap and (iii) the WAC Cap
or (b) after the Optional Termination Date, the least of (i) LIBOR plus
0.740%, (ii) the Loan Group I Cap and (iii) the WAC Cap.
(2) The Class A-2A Interest will bear interest during its initial Interest
Accrual Period at 2.02% per annum. The Class A-2A Interest will bear
interest during each Interest Accrual Period thereafter at a per annum
rate equal to (a) on or prior to the Optional Termination Date, the least
of (i) LIBOR plus 0.200%, (ii) the Loan Group II Cap and (iii) the WAC Cap
or (b) after the Optional Termination Date, the least of (i) LIBOR plus
0.400%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(3) The Class A-2B Interest will bear interest during its initial Interest
Accrual Period at 2.42% per annum. The Class A-2B Interest will bear
interest during each Interest Accrual Period thereafter at a per annum
rate equal to (a) on or prior to the Optional Termination Date, the least
of (i) LIBOR plus 0.600%, (ii) the Loan Group II Cap and (iii) the WAC Cap
or (b) after the Optional Termination Date, the least of (i) LIBOR plus
1.200%, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(4) The Class M-1, Class M-2, Class B-1 and Class B-2 Interests will bear
interest during their initial Interest Accrual Period at 2.67%, 3.42%,
3.92% and 4.22%, respectively, per annum. The Class M-1, Class M-2, Class
B-1 and Class B-2 Interests will bear interest during each Interest
Accrual Period thereafter at a per annum rate equal to (a) on or prior to
the Optional Termination Date, the least of (i) LIBOR plus 0.85%, 1.600%,
2.100% and 2.400%, respectively and (ii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus 1.275%, 2.400%,
3.15% and 3.600%, respectively and (ii) the WAC Cap.
(5) The Class X Interest has an initial principal balance of $4,573,128, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Pass-Through Rate of the Lower Tier REMIC Interests,
where each of the Class LT-Accrual, Class LT-Group I Interest and Class
LT-Group II Interest is subject to a cap equal to zero and each LT
Accretion Directed Class is subject to a cap equal to the Pass-Through
Rate on its Corresponding Class. With respect to any Distribution Date,
interest that so accrues on the notional principal balance of the Class X
Interest shall be deferred in an amount equal to any increase in the
Overcollateralized Amount on such Distribution Date. Such deferred
interest shall not itself bear interest. The Class X Certificates will
represent beneficial ownership of the Class X Interest, and amounts in the
Excess Reserve Fund Account, subject to the obligation to make payments
from the Excess Reserve Fund Account in respect of Basis Risk Carry
Forward Amounts. For federal income tax purposes, the Trustee will treat a
Class X Certificateholder's obligation to make payments from the Excess
Reserve Fund Account as payments made pursuant to an interest rate cap
contract written by the Class X Certificateholders in favor of each Class
of Offered Certificates. Such rights of the Class X Certificateholders and
Offered Certificateholders shall be treated as held in a portion of the
Trust Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(6) The Class UT-R Interest is the sole class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(7) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders.
The minimum denomination for each of the Class A Certificates and
the Subordinated Certificates, will be $25,000 and $250,000, respectively, with
integral multiples of $1 in excess thereof. The Class P, Class R and the Class X
Certificates will each represent a 100% Percentage Interest in such class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates......... Class A-1, Class A-2A and Class A-2B Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class R Certificates, Class P Certificate and
Class X Certificate; any certificate with a rating
below the lowest applicable permitted rating under
the Underwriters' Exemption.
Non-Delay Certificates....... Class A, Class X and Subordinated Certificates.
Offered Certificates......... All Classes of Certificates other than the Private
Certificates.
Physical Certificates........ Class P, Class X and Class R Certificates.
Private Certificates......... Class P, Class X and Class R Certificates.
Rating Agencies.............. Moody's and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the Class P
and Class R Certificates.
Residual Certificates........ Class R Certificates.
Subordinated Certificates.... Class M-1, Class M-2, Class B-1 and Class B-2
Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01 of this Agreement
and the Servicing Performance Standards.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account or the Excess Reserve Fund Account. Each Account shall be an
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to the Purchase Agreements.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Interest Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom the Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Remittance Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Offered Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made at the time of origination of such refinanced
Mortgage Loan, and (ii) with respect to any Second Lien Loan, the value,
determined pursuant to the Underwriting Guidelines, of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
August Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of August 15, 2002, by and between the Responsible Party and
the Purchaser (a copy of which, without the mortgage loan schedule exhibit, is
attached hereto as Exhibit Q).
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received prior to the related Determination Date, together with any P&I
Advances in respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds
and Liquidation Proceeds during the related Prepayment Period (in each case, net
of unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial or full
prepayments on the Mortgage Loans received during the related Prepayment Period
together with all Compensating Interest thereon; and (iv) amounts received with
respect to such Distribution Date as the Substitution Adjustment Amount or
purchase price in respect of a Deleted Mortgage Loan or a Mortgage Loan
repurchased by the Responsible Party as of such Distribution Date; reduced by
(y) amounts in reimbursement for P&I Advances and Servicing Advances previously
made with respect to the Mortgage Loans and other amounts as to which the
Servicer or the Trustee (or co-trustee) are entitled to be paid or reimbursed
pursuant to this Agreement.
Backup Report Delivery Date: As defined in Section 4.03(f).
Backup Reports: As defined in Section 4.03(f).
Balloon Loan: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Overcollateralized Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Offered Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the amount of
interest such Class of Certificates would otherwise be entitled to receive on
such Distribution Date had such rate been calculated as the sum of LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for such
Distribution Date, over (ii) the amount of interest payable on such Class of
Certificates at, with respect to the Class A-1 Certificates, the lesser of (y)
the Loan Group I Cap or (z) the WAC Cap, with respect to the Class A-2
Certificates, the lesser of (y) the Loan Group II Cap or (z) the WAC Cap, and
with respect to each other Class of Regular Certificates, the WAC Cap, as
applicable, for such Distribution Date and (B) the Basis Risk Carry Forward
Amount for such Class of Certificates for all previous Distribution Dates not
previously paid, together with interest thereon at a rate equal to the sum of
LIBOR and the applicable Pass-Through Margin for such Class of Certificates for
such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the aggregate of the Basis Risk Carry Forward Amounts for such Distribution
Date; provided, however, that with respect to any Distribution Date, the payment
cannot exceed the sum of the amounts otherwise distributable on the Class X
Certificates.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
BPO: As defined in Exhibit L hereto.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, New Jersey, California and Florida, (b) the state in which the Servicer's
servicing operations are located, or (c) the State in which the Trustee's
operations are located, are authorized or obligated by law or executive order to
be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class P or Class R Certificates, at any date, the maximum dollar
amount of principal to which the Holder thereof is then entitled hereunder, such
amount being equal to the Denomination thereof minus all distributions of
principal previously made with respect thereto and in the case of any
Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class P and Class R
Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of the
Depositor.
Certification: As defined in Section 8.12(b).
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: Either the Class A-1 Certificates or,
collectively, the Class A-2A and Class A-2B Certificates, as applicable.
Class A Certificates: The Class A-1, Class A-2A and Class A-2B
Certificates.
Class A-2 Certificates: The Class A-2A and Class A-2B Certificates.
Class A Principal Allocation Percentage: For any Distribution Date
is the percentage equivalent of a fraction, determined as follows: (A) with
respect to the Class A-1 Certificates, the numerator of which is the portion of
the Principal Remittance Amount for that Distribution Date that is attributable
to the principal received or advanced on the Group I Mortgage Loans and the
denominator of which is the Principal Remittance Amount for that Distribution
Date; and (B) with respect to the Class A-2 Certificates, the numerator of which
is the portion of the Principal Remittance Amount for that Distribution Date
that is attributable to the principal received or advanced on the Group II
Mortgage Loans and the denominator of which is the Principal Remittance Amount
for that Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 62.00% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date over $2,286,564.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1 Certificates."
Class A-2A Certificates: All Certificates bearing the class
designation of "Class A-2A Certificates."
Class A-2B Certificates: All Certificates bearing the class
designation of "Class A-2B Certificates."
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1 Certificates."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), and (D) the Class Certificate
Balance of the Class B-1 Certificates immediately prior to such Distribution
Date over (ii) the lesser of (A) 95.00% (rounded to two decimal places) of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date and (B) the excess, if any, of the aggregate Stated Principal Balance of
the Mortgage Loans for such Distribution Date over $2,286,564.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-Certificates."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount for such Distribution Date), (D) the Class Certificate
Balance of the Class B-1 Certificates (after taking into account distribution of
the Class B-1 Principal Distribution Amount for such Distribution Date) and (E)
the Class Certificate Balance of the Class B-2 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 98.00% (rounded to two
decimal places) of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date and (B) the excess, if any, of the Stated Principal
Balances of the Mortgage Loans for such Distribution Date over $2,286,564.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1 Certificates."
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2 Certificates".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 77.00%
(rounded to two decimal places) of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$2,286,564.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (C) the Class Certificate Balance of the Class
M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 88.00% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the Stated Principal Balance of the Mortgage Loans for such
Distribution Date over $2,286,564.
Class P Certificates: All Certificates bearing the designation of
"Class P Certificates."
Class R Certificates: All Certificates bearing the designation of
"Class R Certificates."
Class X Certificates: All Certificates bearing the designation of
"Class X Certificates."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect to interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus (ii) as a distribution in
respect of principal, any portion of the principal balance of the Class X
Interest which is distributable as an Overcollateralization Reduction Amount,
minus (iii) any amounts paid as a Basis Risk Payment.
Class X Interest: The Upper Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: September 23, 2002.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio: As of the date of origination and as
to any Second Lien Loan, the ratio, expressed as a percentage, of the (a) sum of
(i) the outstanding principal balance of the Second Lien Loan as of the date of
origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for the Distribution Date, with
respect to voluntary Principal Prepayments in full by the Mortgagor (excluding
any payments made upon liquidation of the Mortgage Loan), and (b) the portion of
the Servicing Fee payable to the Servicer for such Distribution Date calculated
at a rate equal to 0.250% per annum.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 0000 Xxxx Xx. Xxxxxx Xxxxx Xxxxx Xxx,
Xxxxxxxxxx 00000-0000, Attn: Trust Administration-GS02M1, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.
Corresponding Class: The class of interests in any REMIC created
under this Agreement that correspond to the Class of interests in another such
REMIC or to a Class of Certificates in the manner set out below:
LOWER TIER UPPER TIER CORRESPONDING
CLASS DESIGNATION INTEREST CERTIFICATE
----------------- -------- -----------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2A Class A-2A Class A-2A
Class LT-A-2B Class X-0X Xxxxx X-0X
Xxxxx XX-X-0 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class X Class X
Cumulative Loss Percentage: As of any date of determination, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses on the Mortgage Loans for the period from the Cut-off
Date to the date of determination and the denominator of which is the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
Cumulative Loss Trigger: A Cumulative Loss Percentage of greater
than (a) during the period from the Closing Date through the date one year after
the Closing Date, 1%, (b) during the period from the date one year after the
Closing Date through the date two years after the Closing Date, 2%, (c) during
the period from the date two years after the Closing Date through the date three
years after the Closing Date, 3%, (d) during the period from the date three
years after the Closing Date through the date four years after the Closing Date,
4%, and (e) during the period on or after the date four years after the Closing
Date, 5%.
Current Combined Loan-to-Value Ratio: As of any date and as to any
Second Lien Loan, the ratio, expressed as a percentage, of the (a) sum of (i)
the outstanding principal balance of the Second Lien Loan as of such date and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Loan and
which are secured by the same Mortgaged Property to (b) the Appraised Value.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: September 1, 2002.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date).
Data File: As defined in Section 4.03(f).
Data File Delivery Date: As defined in Section 4.03(f).
Data Tape Information: The information provided by the Responsible
Party as of the Cut-off Date to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Responsible Party's
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) with respect to
First Lien Loans, the Loan-to-Value Ratio and with respect to Second Lien Loans,
the Combined Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate
as of the Cut-off Date; (9) the date on which the Scheduled Payment was due on
the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (10) the stated maturity date; (11) the
amount of the Scheduled Payment as of the Cut-off Date; (12) the last payment
date on which a Scheduled Payment was actually applied to pay interest and the
outstanding principal balance; (13) the original principal amount of the
Mortgage Loan; (14) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of principal due
and collected on or before the Cut-off Date; (15) with respect to Adjustable
Rate Mortgage Loans, the Adjustment Date; (16) with respect to Adjustable Rate
Mortgage Loans, the Gross Margin; (17) with respect to Adjustable Rate Mortgage
Loans, the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with
respect to Adjustable Rate Mortgage Loans, a code indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic Mortgage
Interest Rate Cap under the terms of the Mortgage Note; (20) with respect to
Adjustable Rate Mortgage Loans, the Periodic Mortgage Interest Rate Floor under
the terms of the Mortgage Note; (21) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien, second lien); (22) a code indicating the
purpose of the loan (i.e., purchase, rate and term refinance, equity take-out
refinance); (23) a code indicating the documentation style (i.e., full
documentation, limited documentation or stated income); (24) the loan credit
classification (as described in the Responsible Party's underwriting
guidelines); (25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if applicable; (27) a
description of the Prepayment Penalty, if applicable; (28) the Mortgage Interest
Rate as of origination; (29) the credit risk score (FICO score) at origination;
(30) the date of origination; (31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage; (33) the Mortgage
Interest Rate floor; (34) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (35) a code indicating whether the Mortgage
Loan is a High Cost Mortgage Loan; (36) a code indicating whether the Mortgage
Loan is assumable; (37) a code indicating whether the Mortgage Loan has been
modified; (38) the one year payment history, if applicable; (39) the Due Date
for the first Scheduled Payment; (40) the original Scheduled Payment due; (41)
with respect to the related Mortgagor, the debt-to-income ratio; (42) the
Appraised Value of the Mortgaged Property; (43) the sales price of the Mortgaged
Property if the Mortgage Loan was originated in connection with the purchase of
the Mortgaged Property; (44) the Current Combined Loan-to-Value Ratio; (45) with
respect to Second Lien Loans, the outstanding principal balance of the superior
lien; and (46) the MERS Identification Number, if applicable. With respect to
the Mortgage Loans in the aggregate, the Data Tape Information shall set forth
the following information, as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03(d).
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, or
its successor in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Xxxxx'x, F1+ by Fitch and A-1 by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the 12th
day of the calendar month in which such Remittance Date occurs, or if such 12th
day is not a Business Day, the Business Day immediately preceding such 12th day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.28(b) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company in trust for registered holders of GSAMP Trust 2002-WMC1 Mortgage
Pass-Through Certificates, Series 2002-WMC1." Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:30 p.m. Central time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The 20th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in October 2002.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
the Distribution Date occurs and ending on the first day of the calendar month
in which the Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated "A-1+" by Standard & Poor's and
"P-1" by Xxxxx'x (or a comparable rating if another Rating Agency is specified
by the Depositor by written notice to the Servicer) at the time any amounts are
held on deposit therein, (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487(2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this Agreement.
Event of Default: As defined in Section 7.01.
Exceedance: As defined in Exhibit L hereto.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.28(a) and 3.28(b) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "Deutsche Bank National Trust Company in trust for registered holders
of GSAMP Trust 2002-WMC1, Mortgage Pass-Through Certificates, Series 2002-WMC1."
Funds in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
FINAL SCHEDULED
DISTRIBUTION DATE
-----------------
Class A-1 Certificates.................................... October 20, 2032
Class A-2A Certificates................................... October 20, 2032
Class A-2B Certificates................................... October 20, 2032
Class M-1 Certificates.................................... October 20, 2032
Class M-2 Certificates.................................... October 20, 2032
Class B-1 Certificates.................................... October 20, 2032
Class B-2 Certificates.................................... October 20, 2032
Class X Certificates...................................... October 20, 2032
Class P Certificates...................................... October 20, 2032
Class R Certificates...................................... October 20, 2032
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch Ratings, or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - GSAMP
Trust 2002-WMC1, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan purchased
pursuant to the Purchase Agreements.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Interest Rate.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
High Cost Mortgage Loan: A Mortgage Loan classified as (a) a "high
cost" loan under the Home Ownership and Equity Protection Act of 1994 or (b) a
"high cost," "threshold," "predatory" or similar loan under any other applicable
state, federal or local law.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Interest Rate set forth as
such on the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Investment Account: As defined in Section 3.12(a) herein.
July Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of July 15, 2002, by and between the Responsible Party and
the Purchaser (a copy of which, without the mortgage loan schedule exhibit, is
attached hereto as Exhibit P).
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received on or after the Remittance Date immediately
following such Due Period, whether as late payments of Scheduled Payments or as
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise,
which represent late payments or collections of principal and/or interest due
(without regard to any acceleration of payments under the related Mortgage and
Mortgage Note) but delinquent for such Due Period and not previously recovered.
Xxxxx 0 Xxxxxxxxxxx Xxxxxxxxx: Shall mean the "Termination
Standards" set forth on Table 1 on Exhibit L hereto.
Xxxxx 0 Xxxxxxxxxxx Xxxxxxxxx: Shall mean the "Termination
Standards" set forth on Table 2 on Exhibit L hereto.
LIBOR: With respect to any Interest Accrual Period for the Offered
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period (other than the initial Interest Accrual Period) for the Offered
Certificates, the second London Business Day preceding the commencement of such
Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group I Mortgage Loans and (ii) a fraction, the numerator of which
is 30 and the denominator of which is the actual number of days in the Interest
Accrual Period related to such Distribution Date.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the product of (i) the weighted average of the Adjusted
Net Mortgage Interest Rates then in effect on the beginning of the related Due
Period on the Group II Mortgage Loans and (ii) a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
Interest Accrual Period related to such Distribution Date.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to
either (a) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the least of (i) the purchase price of the Mortgaged
Property, (ii) the Appraisal Value of the Mortgaged Property at origination, or
(iii) the Review Appraisal Value of the Mortgaged Property; or (b) if the
Mortgage Loan was a refinancing or modification, the Appraisal Value of the
Mortgaged Property at the time of the refinancing or modification.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class LT-A-2,
Class LT-M-1, Class LT-M-2, Class LT-B-1, Class LT-B-2, Class LT-Group I, Class
LT-Group II and Class LT-Accrual Interests as described in the Preliminary
Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Market Value Change Report: A report setting forth changes in
property value of the Mortgaged Properties in a format agreed upon the Servicer
and the Depositor.
MERS: As defined in Section 2.01.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Custodial File, the Servicing File,
the Scheduled Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, Prepayment
Penalties and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan, excluding replaced or repurchased
Mortgage Loans.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan as of the Cut-off Date: (1) the Responsible
Party's Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the
street address of the Mortgaged Property including the city, state and zip code;
(4) a code indicating whether the Mortgaged Property is owner-occupied, a second
home or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in the
same manner but based on the actual amortization schedule; (7) with respect to
First Lien Loans, the Loan-to-Value Ratio and with respect to Second Lien Loans,
the Combined Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate
as of the Cut-off Date; (9) the date on which the Scheduled Payment was due on
the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, such Due Date; (10) the stated maturity date; (11) the
amount of the Scheduled Payment as of the Cut-off Date; (12) the last payment
date on which a Scheduled Payment was actually applied to pay interest and the
outstanding principal balance; (13) the original principal amount of the
Mortgage Loan; (14) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of principal due
and collected on or before the Cut-off Date; (15) with respect to Adjustable
Rate Mortgage Loans, the Adjustment Date; (16) with respect to Adjustable Rate
Mortgage Loans, the Gross Margin; (17) with respect to Adjustable Rate Mortgage
Loans, the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with
respect to Adjustable Rate Mortgage Loans, a code indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic Mortgage
Interest Rate Cap under the terms of the Mortgage Note; (20) with respect to
Adjustable Rate Mortgage Loans, the Periodic Mortgage Interest Rate Floor under
the terms of the Mortgage Note; (21) the type of Mortgage Loan (i.e., fixed
rate, adjustable rate, first lien, second lien); (22) a code indicating the
purpose of the loan (i.e., purchase, rate and term refinance, equity take-out
refinance); (23) a code indicating the documentation style (i.e., full
documentation, limited documentation or stated income); (24) the loan credit
classification (as described in the Responsible Party's underwriting
guidelines); (25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if applicable; (27) a
description of the Prepayment Penalty, if applicable; (28) the Mortgage Interest
Rate as of origination; (29) the credit risk score (FICO score) at origination;
(30) the date of origination; (31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage; (33) the Mortgage
Interest Rate floor; (34) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (35) a code indicating whether the Mortgage
Loan is a High Cost Mortgage Loan; (36) a code indicating whether the Mortgage
Loan is assumable; (37) a code indicating whether the Mortgage Loan has been
modified; (38) the one year payment history, if applicable; (39) the Due Date
for the first Scheduled Payment; (40) the original Scheduled Payment due; (41)
with respect to the related Mortgagor, the debt-to-income ratio; (42) the
Appraised Value of the Mortgaged Property; (43) the sales price of the Mortgaged
Property if the Mortgage Loan was originated in connection with the purchase of
the Mortgaged Property; (44) the Current Combined Loan-to-Value Ratio; (45) with
respect to Second Lien Loans, the outstanding principal balance of the superior
lien; and (46) the MERS Identification Number, if applicable. With respect to
the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth
the following information, as of the Cut-off Date: (1) the number of Mortgage
Loans; (2) the current aggregate outstanding principal balance of the Mortgage
Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans;
and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
NIM Trust: GSAMP NIM Trust 2002-WMC1N, a Delaware business trust.
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related late
payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds on
such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer, will not or, in the
case of a proposed Servicing Advance, would not, be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise. The determination by the Servicer that it has made a Nonrecoverable
Servicing Advance or that any proposed Servicing Advances, if made, would
constitute a Nonrecoverable Servicing Advance, shall be evidenced by an
Officers' Certificate delivered to the Trustee.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee; provided, that any Opinion of Counsel relating to (a) qualification
of either the Lower Tier REMIC or Upper Tier REMIC or (b) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of the Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer of the Mortgage Loans or in an affiliate of either and
(iii) is not connected with the Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10.00% or less of the Cut-off Date Pool
Principal Balance.
Original Purchase Date: (a) With respect to Mortgage Loans purchased
pursuant to the July Purchase Agreement, July 29, 2002; and (b) with respect to
Mortgage Loans purchased pursuant to the August Purchase Agreement, August 27,
2002.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the Offered Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Total Monthly Excess Spread.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Remittance Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.370%; Class
A-2A Certificates, 0.200%; Class A-2B Certificates, 0.600%; Class M-1
Certificates, 0.850%; Class M-2 Certificates, 1.600%; Class B-1 Certificates,
2.100%; and Class B-2 Certificates, 2.400%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall increase to: Class
A-1 Certificates, 0.740%; Class A-2A Certificates, 0.400%; Class A-2B
Certificates, 1.200%; Class M-1 Certificates, 1.275%; Class M-2 Certificates,
2.400%; Class B-1 Certificates, 3.150%; and Class B-2 Certificates, 3.600%.
Pass-Through Rate: For each Class of Certificates and each Lower
Tier Regular Interest, the per annum rate set forth or calculated in the manner
described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Interest Rate Cap: The provision of each Mortgage
Note related to an Adjustable Rate Mortgage Loan which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Cap for each
Adjustable Rate Mortgage Loan is the rate set forth on the Mortgage Loan
Schedule.
Periodic Mortgage Interest Rate Floor: The provision of each
Mortgage Note related to an Adjustable Rate Mortgage Loan which provides for an
absolute minimum amount by which the Mortgage Interest Rate therein may increase
or decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Floor for each
Adjustable Rate Mortgage Loan is the rate set forth on the Mortgage Loan
Schedule.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by any Depository Institution and rated F1+ by Fitch and A-1+ by
S&P;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
advised by the Depositor or the Trustee or an Affiliate thereof, that have
been rated "Aaa" by Moody's, "AAAm" or "AAAm-G" by Standard & Poor's and,
if rated by Fitch, at least "AA" by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies as a permitted
investment of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other Person,
(vi) an "electing large partnership" within the meaning of Section 775 of the
Code and (vii) any other Person so designated by the Depositor based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause either the Lower Tier REMIC or the Upper
Tier REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States," "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
the FHLMC, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Prepayment Period
the subject of a Principal Prepayment that was applied by the Servicer to reduce
the outstanding principal balance of such Mortgage Loan on a date preceding the
Due Date in the succeeding Prepayment Period, an amount equal to the product of
(a) the Mortgage Interest Rate net of the Servicing Fee Rate for such Mortgage
Loan, (b) the amount of the Principal Prepayment for such Mortgage Loan, (c)
1/360 and (d) the number of days commencing on the date on which such Principal
Prepayment was applied and ending on the last day of the related Prepayment
Period.
Prepayment Penalty: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in Full pursuant to the terms
of the related Mortgage Note.
Prepayment Period: With respect to any Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received or advanced by the
Servicer prior to the related Remittance Date (including the portion of
Insurance Proceeds or Condemnation Proceeds allocable to principal), and all
Principal Prepayments received during the related Prepayment Period, (ii) the
Liquidation Proceeds on the Mortgage Loans allocable to principal actually
collected by the Servicer during the related Prepayment Period, (iii) the
portion of the purchase price allocable to principal with respect to each
Deleted Mortgage Loan, the repurchase obligation for which arose during the
related Prepayment Period, that was repurchased during the period from the prior
Distribution Date through Distribution Account Deposit Date for the current
Distribution Date, (iv) the principal portion of all Substitution Adjustment
Amounts with respect to the substitutions of Mortgage Loans that occur during
the calendar month in which such Distribution Date occurs; and (v) the allocable
portion of the proceeds received with respect to the termination of the Trust
Fund (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated September
19, 2002, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: Planned Unit Development.
Purchase Agreements: The July Purchase Agreement and the August
Purchase Agreement.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, as purchaser of the Mortgage Loans under the Purchase Agreements.
Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in the connection with the liquidation
of such Liquidated Mortgage Loan and net of any amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last day of the month
immediately preceding the related Distribution Date (or if such day is not a
Business Day, on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
or any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than 12:30 PM, Central Time on the Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Interest Rate net of the
Servicing Fee Rate that would have been applicable to the related Mortgage Loan
had it been outstanding) on the unpaid principal balance of the Mortgage Loan as
of the date of acquisition thereof (as such balance is reduced pursuant to
Section 3.17 by any income from the REO Property treated as a recovery of
principal).
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reporting Date: The 14th day of each calendar month or the
immediately following Business Day if the 14th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Interest Rate from the last date through which
interest has been paid and distributed to the Trustee to the date of repurchase,
(iii) all unreimbursed Servicing Advances and (iv) all reasonable and customary
expenses incurred by the Servicer or the Trustee, as the case may be, in respect
of a breach or defect, including, without limitation, reasonable and customary
expenses arising out of the Servicer's or Trustee's, as the case may be,
enforcement of the Responsible Party's repurchase obligation, to the extent not
included in (iii).
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Party: WMC Mortgage Corp., a California corporation, and
its successors and assigns, in its capacity as responsible party hereunder.
Review Appraisal Value: As defined in the Underwriting Guidelines.
Rule 144A Letter: As defined in Section 5.02(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 38.00%.
Servicer: Ocwen Federal Bank FSB, a federally chartered savings
bank, and its successors and assigns, in its capacity as servicer hereunder.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of
its servicing obligations in connection with a default, delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15 hereof. The Servicer shall not be required to make any
Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan. Such fee shall be payable monthly, and
shall be pro rated for any portion of a month during which the Mortgage Loan is
serviced by the Servicer under this Agreement. The Servicing Fee is payable
solely from, the interest portion (including recoveries with respect to interest
from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds and
proceeds received with respect to REO Properties, to the extent permitted by
Section 3.11) of such Scheduled Payment collected by the Servicer or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Performance Standards: The servicing standards set forth
on Exhibit L hereto.
Servicing Rights: 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 Servicer for servicing the Mortgage Loans; (c) any ancillary income with
respect to the Mortgage Loans; (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 Servicer thereunder; (e) any and all
rights to and in the Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the Servicer 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.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 1.00% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 2.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the aggregate Stated Principal
Balance of the Mortgage Loans as of the Cut-off Date; provided, however, that
if, on any Distribution Date, a Trigger Event has occurred, the Specified
Overcollateralized Amount shall not be reduced to the applicable percentage of
the then current aggregate Stated Principal Balance of the Mortgage Loans until
the Distribution Date on which a Trigger Event is no longer occurring.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - GSAMP Trust 2002-WMC1, or such other address as Standard & Poor's may
hereafter furnish to the Depositor and the Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received or advanced prior to
the related Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related Prepayment Period.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balances of the Class A Certificates have been
reduced to zero, and (b) the later to occur of (i) the Distribution Date in
October 2005, and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a remaining term to maturity no greater than (and not more than one
year less than that of) the Deleted Mortgage Loan; and (v) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Standards: As described in Section 7.01(i).
30 Day Delinquency: The failure of the Mortgagor to make any
Scheduled Payment due under the Mortgage Note on or prior to the date which is
30 days after such payment's Due Date.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected or advanced on the
Mortgage Loans for Due Dates during the related Remittance Period (net of
Expense Fees) over (ii) the sum of the interest payable to the Classes of
Certificates on such Distribution Date.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: After the Stepdown Date, a Trigger Event exists if
(i) the quotient (expressed as a percentage) of (x) the rolling three month
average of the Stated Principal Balances of 60+ Day Delinquent Mortgage Loans,
divided by (y) the aggregate Stated Principal Balance of the Mortgage Loans
equals or exceeds 40% of the prior period's Senior Enhancement Percentage or
(ii) the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Prepayment Period divided by (y) the Cut-off Date Pool Principal Balance
exceeds the applicable percentages set forth below with respect to any
Distribution Date:
--------------------------------------------------------------------------
DISTRIBUTION DATE OCCURRING IN LOSS PERCENTAGE
------------------------------ ---------------
--------------------------------------------------------------------------
October 2005 through September 2006 2.75% for the first month, plus an
additional 1/12th of 1.5% for each
month thereafter (e.g., approximately
2.875% in November 2005)
--------------------------------------------------------------------------
October 2006 through September 2007 4.25% for the first month, plus an
additional 1/12th of 1.25% for each
month thereafter (e.g., approximately
4.354% in November 2006)
--------------------------------------------------------------------------
October 2007 through September 2008 5.50% for the first month, plus an
additional 1/12th of 0.5% for each
month thereafter (e.g., approximately
5.542% in November 2007)
--------------------------------------------------------------------------
October 2008 through September 2009 6.00% for the first month, plus an
additional 1/12th of 0.25% for each
month thereafter (e.g., approximately
6.021% in November 2008)
--------------------------------------------------------------------------
October 2009 and thereafter 6.25%
--------------------------------------------------------------------------
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; and (iv) all proceeds of
the conversion, voluntary or involuntary, of any of the foregoing.
Trustee: Deutsche Bank National Trust Company and its successors
and, if a successor trustee is appointed hereunder, such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the related Trustee Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor, interest at the Trustee Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.006% per
annum.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002),
or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to the
Purchase Agreements.
Unpaid Interest Amounts: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from prior Distribution Dates remaining unpaid and (b)
interest on such unpaid amount at the applicable Pass-Through Rate (to the
extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates. Any amounts distributed to a Class of Subordinated
Certificates in respect of any Unpaid Realized Loss Amount will not be applied
to reduce the Class Certificate Balance of such Class.
U.S. Person: Shall mean (i) a citizen or resident of the United
States; (ii) a corporation (or entity treated as a corporation for tax purposes)
created or organized in the United States or under the laws of the United States
or of any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of any
state thereof, including, for this purpose, the District of Columbia (unless
provided otherwise by future Treasury regulations); (iv) an estate whose income
is includible in gross income for United States income tax purposes regardless
of its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage
Interest Rates then in effect on the beginning of the related Due Period on the
Mortgage Loans and (ii) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days in the Interest Accrual Period
related to such Distribution Date.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Trustee for the benefit of the Certificateholders the following documents or
instruments with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements
showing a complete chain of endorsement from the originator to the last
endorsee, endorsed "Pay to the order of _____________, without recourse"
and signed in the name of the last endorsee by an authorized officer;
except that for Mortgage Loans with loan numbers 10461625, 10468704,
10473758, 10484695 and 10467707, there is a lost note affidavit and a copy
of the Mortgage Note. To the extent that there is no room on the face of
the Mortgage Notes for endorsements, the endorsement may be contained on
an allonge, if state law so allows and the Trustee is so advised by the
Depositor that state law so allows;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If in
connection with any Mortgage Loan, the Depositor cannot deliver or cause
to be delivered the original Mortgage with evidence of recording thereon
on or prior to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for recordation or
because such Mortgage has been lost or because such public recording
office retains the original recorded Mortgage, the Responsible Party (to
the extent that it has not previously delivered the same to the Purchaser
or the Trustee) shall deliver or cause to be delivered to the Trustee, a
photocopy of such Mortgage, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
Responsible Party or a certificate from an escrow company, a title company
or closing attorney stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Trustee upon receipt thereof by
the Responsible Party; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the case
where a Mortgage is lost after recordation in a public recording office, a
copy of such Mortgage certified by such public recording office to be a
true and complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements (if provided), with evidence of recording thereon or
a certified true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank and in recordable form;
(vi) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon, or if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Responsible
Party (to the extent it has not previously delivered the same to the
Purchaser or the Trustee) shall deliver or cause to be delivered to the
Trustee, a photocopy of such intervening assignment, together with (A) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Responsible Party or a certificate from an escrow
company, a title company or a closing attorney stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Trustee upon
receipt thereof by the Responsible Party; or (B) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) the original or duplicate lender's title policy and any riders
thereto or, any one of an original title binder, an original or copy of
the preliminary title report or an original or copy of the title
commitment, and if, copies then certified by the title company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The Depositor shall deliver to the Trustee the applicable recorded
document promptly upon receipt from the respective recording office but in no
event later than 120 days from the Closing Date.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the Depositor to cause the Trust to be shown as the owner of the related
Mortgage Loan on the records of MERS for the purpose of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
From time to time, the Responsible Party shall forward to the
Trustee additional original documents, additional documents evidencing an
assumption, modification, consolidation or extension of a Mortgage Loan approved
by the Responsible Party, in accordance with the terms of this Agreement. All
such mortgage documents held by the Trustee as to each Mortgage Loan shall
constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee Assignments of Mortgages, in blank, for each Mortgage Loan. No later
than thirty (30) Business Days following the later of the Closing Date and the
date of receipt by the Servicer of the fully completed Assignments of Mortgages
in recordable form, the Servicer shall promptly submit or cause to be submitted
for recording, at the expense of the Depositor, at no expense to the Trust Fund,
the Trustee or the Responsible Party, in the appropriate public office for real
property records, each Assignment referred to in Section 2.01(b)(v).
Notwithstanding the foregoing, however, for administrative convenience and
facilitation of servicing and to reduce closing costs, the Assignments shall not
be required to be completed and submitted for recording with respect to any
Mortgage Loan if the Trustee and each Rating Agency has received an opinion of
counsel, satisfactory in form and substance to the Trustee and each Rating
Agency, to the effect that the recordation of such Assignments in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned at the Depositor's expense to "Deutsche Bank National Trust
Company as trustee under the Pooling and Servicing Agreement dated as of
September 1, 2002, GSAMP Trust 2002-WMC1." In the event that any such assignment
is lost or returned unrecorded because of a defect therein, the Depositor, if
the assignment is lost, or the Responsible Party, if there is a defect in the
form of assignment, shall promptly prepare a substitute assignment to cure such
defect and thereafter cause each such assignment to be duly recorded.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee a copy of the Data Tape Information in electronic, machine readable
medium in a form mutually acceptable to the Depositor and the Trustee. Within
ten (10) Business Days of the Closing Date, the Depositor shall deliver a copy
of the complete Mortgage Loan Schedule to the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Trustee within the time period and in the manner specified in the
Purchase Agreements, the Trustee shall notify the Depositor and the Depositor
shall take or cause to be taken such remedial actions under the Purchase
Agreements against the Responsible Party as may be permitted to be taken
thereunder, including without limitation, if applicable, the repurchase by the
Responsible Party of such Mortgage Loan. The foregoing repurchase remedy shall
not apply in the event that the Responsible Party cannot deliver such original
or copy of any document submitted for recordation to the appropriate public
recording office within the specified period due to a delay caused by the
recording office in the applicable jurisdiction; provided, that the Responsible
Party shall instead deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of an officer
of the Responsible Party, confirming that such document has been accepted for
recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party shall be deemed to have been satisfied upon delivery by
the Responsible Party to the Trustee prior to the Closing Date of a copy of such
Mortgage or assignment, as the case may be, certified (such certification to be
an original thereof) by the public recording office to be a true and complete
copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAMP Trust 2002-WMC1" and
Deutsche Bank National Trust Company is hereby appointed as Trustee in
accordance with the provisions of this Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit E, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. The Trustee acknowledges that it will
maintain possession of the related Mortgage Notes in the State of California,
unless otherwise permitted by the Rating Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor an Initial Certification prior to the Closing Date, or as the
Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage Note
and Assignment of Mortgage for each Mortgage Loan. The Trustee shall not be
responsible to verify the validity, sufficiency or genuineness of any document
in any Custodial File.
On the Closing Date, the Trustee shall ascertain that all documents
required to be delivered to it are in its possession, and shall deliver to the
Depositor a Document Certification and Exception Report to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as an exception and not covered by such certification): (i) all
documents required to be delivered to it are in its possession; (ii) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan; (iii) based on its examination and only as to the
foregoing documents, the information set forth in items (2), (3), (10), (13) and
(28) of the Mortgage Loan Schedule and items (2), (3), (10), (13) and (28) of
the Data Tape Information respecting such Mortgage Loan is correct; and (iv)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. The Trustee shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer. (a) The Servicer hereby makes the
representations and warranties set forth in Schedule II hereto to the Depositor
and the Trustee, as of the Closing Date.
(b) The Responsible Party hereby makes the representations and
warranties set forth in Schedule III and Schedule IV hereto, to the Depositor,
the Servicer and the Trustee.
(c) It is understood and agreed by the Servicer and the
Responsible Party that the representations and warranties set forth in this
Section 2.03 shall survive the transfer of the Mortgage Loans by the Depositor
to the Trustee, and shall inure to the benefit of the Depositor and the Trustee
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by any of the Responsible Party, the Depositor, the Trustee
or the Servicer of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
(d) Within 90 days of the earlier of either discovery by or notice
to the Responsible Party of any breach of a representation or warranty set forth
in Section 2.03(b) (including without limitation a breach resulting from the
Document Certification and Exception Report referred to above indicating defects
in the Custodial File which are not cured by the Responsible Party within the
time period required under the applicable Purchase Agreement) that materially
and adversely affects the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the Responsible Party shall use its
best efforts to cause to be remedied a material defect in a document
constituting part of a Mortgage File or promptly to cure such breach in all
material respects and, if such defect or breach cannot be remedied, the
Responsible Party shall, (i) if such 30 or 90 day period, as applicable, expires
prior to the second anniversary of the Closing Date, remove such Mortgage Loan
(a "Deleted Mortgage Loan") from the Trust Fund and substitute in its place a
Substitute Mortgage Loan, in the manner and subject to the conditions set forth
in this Section 2.03, or (ii) at the Depositor's option or if the Responsible
Party does not have a Substitute Mortgage Loan, repurchase such Mortgage Loan at
the Repurchase Price; provided, however, that any such substitution pursuant to
clause (i) above shall not be effected prior to the delivery to the Trustee of
the Opinion of Counsel required by Section 2.04, if any, and a Request for
Release substantially in the form of Exhibit K, and the Mortgage File for any
such Substitute Mortgage Loan. In the event that a breach shall involve any
representation or warranty set forth in Schedule IV, and such breach cannot be
cured within 60 days of the earlier of either discovery by or notice to the
Responsible Party of such breach, all of the Mortgage Loans shall, at the
Depositor's option, be repurchased by the Responsible Party at the Repurchase
Price. Notwithstanding the foregoing, a breach (x) which causes a Mortgage Loan
not to constitute a "qualified mortgage" within the meaning, as of the Closing
Date, of Section 860G(a)(3) of the Code or (y) by the Responsible Party any of
the representations and warranties set forth in clause (tt), (uu), (vv) or (xx)
of Schedule III, in each case, will be deemed automatically to materially and
adversely affect the value of such Mortgage Loan and the interests of the
Trustee and Certificateholders in such Mortgage Loan. In the event that the
Trustee receives notice of a breach by the Responsible Party of any of the
representations and warranties set forth in clause (tt), (uu), (vv) or (xx) of
Schedule III, the Trustee shall give notice of such breach to the Responsible
Party and request the Responsible Party to repurchase the Mortgage Loan at the
Repurchase Price within thirty (30) days of the Responsible Party receipt of
such notice. The Responsible Party shall repurchase each such Deleted Mortgage
Loan within 30 days of the earlier of discovery or receipt of notice with
respect to each such Deleted Mortgage Loan.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related assignment of
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by
Section 2.01. No substitution is permitted to be made in any calendar month
after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the Responsible Party on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the Responsible Party shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.
(f) The Servicer shall, based on information provided by the
Responsible Party, amend the Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Substitute Mortgage Loan or Loans and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Responsible Party shall be
deemed to have made with respect to such Substitute Mortgage Loan or Loans, as
of the date of substitution, the representations and warranties made pursuant to
Section 2.03(b) with respect to such Mortgage Loan. Upon any such substitution
and the deposit to the Collection Account of the amount required to be deposited
therein in connection with such substitution as described in the following
paragraph, the Trustee shall release the Mortgage File held for the benefit of
the Certificateholders relating to such Deleted Mortgage Loan to the Responsible
Party and shall execute and deliver at the Responsible Party's direction such
instruments of transfer or assignment prepared by the Responsible Party, in each
case without recourse, as shall be necessary to vest title in the Responsible
Party, or its designee, the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
(g) For any month in which the Responsible Party substitutes one
or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the
Servicer will determine the amount (if any) by which the aggregate unpaid
principal balance of all such Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the Scheduled Payments due in the Due Period of substitution). The amount of
such shortage (the "Substitution Adjustment Amount") plus, if the Responsible
Party is not the Servicer, an amount equal to the aggregate of any unreimbursed
Advances with respect to such Deleted Mortgage Loans shall be deposited into the
Collection Account by the Responsible Party on or before the Distribution
Account Deposit Date for the Distribution Date in the month succeeding the
calendar month during which the related Mortgage Loan became required to be
purchased or replaced hereunder.
(h) In addition to such repurchase obligation, the Responsible
Party shall indemnify the Depositor, any of its Affiliates, the Servicer, and
the Trustee and hold such parties harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach by
the Responsible Party of any of its representations and warranties contained in
the Purchase Agreements or this Agreement.
(i) In the event that the Responsible Party shall have repurchased
a Mortgage Loan, the Repurchase Price therefor shall be deposited by the
Servicer in the Collection Account pursuant to Section 3.10 on or before the
Distribution Account Deposit Date for the Distribution Date in the month
following the month during which the Responsible Party became obligated
hereunder to repurchase or replace such Mortgage Loan and upon such deposit of
the Repurchase Price, the delivery of the Opinion of Counsel required by Section
2.04 and receipt of a Request for Release in the form of Exhibit J hereto, the
Trustee shall release the related Custodial File held for the benefit of the
Certificateholders to such Person as directed by the Servicer, and the Trustee
shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against such Persons respecting such
breach available to Certificateholders, the Depositor or the Trustee on their
behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04 Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages. (a) Notwithstanding any contrary
provision of this Agreement, no substitution pursuant to Section 2.03 shall be
made more than 90 days after the Closing Date unless the Responsible Party
delivers to the Trustee an Opinion of Counsel, which Opinion of Counsel shall
not be at the expense of either the Trustee or the Trust Fund, addressed to the
Trustee, to the effect that such substitution will not (i) result in the
imposition of the tax on "prohibited transactions" on either the Lower Tier
REMIC or Upper Tier REMIC or contributions after the Startup Date, as defined in
Sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause either
the Lower Tier REMIC or Upper Tier REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding.
(b) Upon discovery by the Depositor, the Responsible Party, the
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Responsible Party to
repurchase the affected Mortgage Loan within 30 days of the earlier of discovery
or receipt of notice in the same manner as it would a Mortgage Loan for a breach
of representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Responsible Party the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
Section 2.05 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is September 20, 2032, which is the
Distribution Date following the latest Mortgage Loan maturity date.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicer that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by the
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of
this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder;
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 10.04 hereof; and
(i) The Depositor hereby makes the representations and warranties
set forth in Schedule V hereto to the Trustee.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
Within 30 days of the earlier of either discovery by or notice to
the Depositor set forth in clause (h) or (i) above that materially and adversely
affects the value of any Mortgage Loan or the interest of the Trustee or the
Certificateholders therein, the Depositor shall use its best efforts to promptly
to cure such breach in all material respects and if such defect or breach cannot
be remedied, the Depositor shall either (i) if such 30 or 90 day period, as
applicable, expires prior to the second anniversary of the Closing Date, remove
such Deleted Mortgage Loan from the Trust Fund and substitute in its place a
Substitute Mortgage Loan, in the manner and subject to the conditions set forth
in Section 2.03, or (ii) repurchase such Mortgage Loan at the Repurchase Price.
Any such substitution or repurchase shall be conducted in the same manner as set
forth in Section 2.03. The obligations of the Depositor to cure such breach or
to substitute or purchase any Mortgage Loan constitute the sole remedies
respecting a material breach of any such representation or warranty to the
holders of the certificates and the trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans in accordance with the terms of this Agreement and the respective
Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own
portfolio, giving due consideration to customary and usual standards of practice
of mortgage lenders and loan servicers administering similar mortgage loans but
without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, 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.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b) hereof, in accordance with the
standards of the preceding paragraph, the Servicer shall advance or cause to be
advanced funds as necessary for the purpose of effecting the timely payment of
taxes and assessments on the Mortgaged Properties, which advances shall be
Servicing Advances reimbursable in the first instance from related collections
from the Mortgagors pursuant to Section 3.09(b), and further as provided in
Section 3.11. Any cost incurred by the Servicer or by Subservicers in effecting
the timely payment of taxes and assessments on a Mortgaged Property shall not be
added to the unpaid principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary,
the Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for a reduction of interest payments resulting
from the application of the Soldiers' and Sailors' Relief Act of 1940, as
amended, or any similar state statutes) or (ii) permit any modification, waiver
or amendment of any term of any Mortgage Loan that would both (A) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
(B) cause either the Upper Tier REMIC or the Lower Tier REMIC to fail to qualify
as a REMIC under the Code or the imposition of any tax on "prohibited
transactions" or "contributions after the startup date" under the REMIC
Provisions, or (iii) except as provided in Section 3.07(a), waive any Prepayment
Penalties.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers.
(a) The Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements").
(b) Each Subservicer shall be (i) authorized to transact business
in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable
the Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee, without the consent of
the Trustee. Any variation without the consent of the Trustee from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee and the Depositor copies of all Subservicing Agreements, and any
amendments or modifications thereof, promptly upon the Servicer's execution and
delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement. In the event of termination of
any Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the Servicer without any act or deed on the part of such
Subservicer or the Servicer, and the Servicer either shall service directly the
related Mortgage Loans or shall enter into a Subservicing Agreement with a
successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor Servicer is
not the Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee prior to the Trustee assuming
such rights and obligations, unless the Trustee elects to terminate any
Subservicing Agreement in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable insurance policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may waive, in whole or in part, a
Prepayment Penalty only under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Penalty and the related Mortgage Loan
or (ii) such Prepayment Penalty is not permitted to be collected by applicable
law. If a Prepayment Penalty is waived other than as permitted by the prior
sentence, then the Servicer is required to pay the amount of such waived
Prepayment Penalty, for the benefit of the Holders of the Class P Certificates,
by depositing such amount into the Collection Account together with and at the
time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account; provided, however, that the Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Penalty if the failure to collect such amount is in the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule in effect at
such time.
(b) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account within a reasonable period of time prior to any change
thereof.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Servicer for
deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract in
effect with respect to each Mortgage Loan (each, a "Tax Service Contract"). Each
Tax Service Contract shall be assigned to the Trustee, or its designee, at the
Servicer's expense in the event that the Servicer is terminated as Servicer of
the related Mortgage Loan.
(b) To the extent that the services described in this paragraph
(b) are not otherwise provided pursuant to the Tax Service Contracts described
in paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay interest, if required and as described below, to Mortgagors on balances in
the Escrow Account; (v) clear and terminate the Escrow Account at the
termination of the Servicer's obligations and responsibilities in respect of the
Mortgage Loans under this Agreement; or (vi) recover amounts deposited in error.
As part of its servicing duties, the Servicer or Subservicers shall pay to the
Mortgagors interest on funds in Escrow Accounts, to the extent required by law
and, to the extent that interest earned on funds in the Escrow Accounts is
insufficient, to pay such interest from its or their own funds, without any
reimbursement therefor. To the extent that a Mortgage does not provide for
Escrow Payments, the Servicer shall determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. vii) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more Eligible Accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee. On behalf
of the Trustee, the Servicer shall deposit or cause to be deposited in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with prudent and customary servicing practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Penalties collected by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account. viii) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to the Remittance Date, to remit to the Trustee (A)
the Trustee Fee with respect to such Distribution Date, (B) all Available
Funds in respect of the related Distribution Date together with all
amounts representing Prepayment Penalties from the Mortgage Loans received
during the related Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may be collected by the Servicer from a Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each Mortgage
Loan that has previously been repurchased or replaced pursuant to this
Agreement all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse the Servicer or the Depositor for expenses
incurred by or reimbursable to the Servicer, the Depositor or the Trustee,
as the case may be, pursuant to Section 6.03 or Section 8.05;
(ix) to reimburse the Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation under Section 2.03 of this Agreement
that were included in the Repurchase Price of the Mortgage Loan, including
any expenses arising out of the enforcement of the repurchase obligation,
to the extent not otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error;
(xi) to withdraw any amounts held in the Collection Account and not
required to be remitted to the Trustee on the Remittance Date occurring in
the month in which such amounts are deposited into the Collection Account,
to reimburse the Servicer for xxxxxxxxxxxx X&X Advances; and
(xii) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (iv), (v), (vi) (vii), (viii) and
(ix) above. The Servicer shall provide written notification to the Depositor, on
or prior to the next succeeding Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account. (a) The Servicer may invest the funds in the related
Collection Account and the Trustee may invest funds in the Distribution Account
during the Trustee Float Period, and shall (except during the Trustee Float
Period), invest such funds in the Distribution Account at the direction of the
Depositor (for purposes of this Section 3.12, such Accounts are referred to as
an "Investment Account"), in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee. The
Trustee shall be entitled to sole possession (except with respect to investment
direction of funds held in the related Account and any income and gain realized
thereon in any Account other than the Distribution Account during the Trustee
Float Period) over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Trustee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Servicer, shall
be for the benefit of the Servicer and shall be subject to its withdrawal in the
manner set forth in Section 3.11. The Servicer shall deposit in the Collection
Account the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Depositor (except for any income or gain realized from the
investment of funds on deposit in the Distribution Account during the Trustee
Float Period, which shall be for the benefit of the Trustee) and shall be
subject to the Trustee's withdrawal in the manner set forth in Section
3.28(b)(iv). The Depositor shall deposit in the Distribution Account (except
with respect to the Trustee Float Period) the amount of any loss of principal
incurred in respect of any such Permitted Investment made with funds in such
accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
current principal balance of such Mortgage Loan, (ii) the amount necessary to
fully compensate for any damage or loss to the improvements that are a part of
such property on a replacement cost basis and (iii) the maximum insurable value
of the improvements which are a part of such Mortgaged Property, in each case in
an amount not less than such amount as is necessary to avoid the application of
any coinsurance clause contained in the related hazard insurance policy. The
Servicer shall also cause to be maintained fire insurance with extended coverage
on each REO Property in an amount which is at least equal to the lesser of (i)
the maximum insurable value of the improvements which are a part of such
property and (ii) the outstanding principal balance of the related Mortgage Loan
at the time it became an REO Property, plus accrued interest at the Mortgage
Interest Rate and related Servicing Advances. The Servicer will comply in the
performance of this Agreement with all reasonable rules and requirements of each
insurer under any such hazard policies. Any amounts to be collected by the
Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts
to be released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing loans held for its own account, subject to
the terms and conditions of the related Mortgage and Mortgage Note) shall be
deposited in the Collection Account, subject to withdrawal pursuant to Section
3.11. Any cost incurred by the Servicer in maintaining any such insurance shall
not, for the purpose of calculating distributions to the Trustee, be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Servicer will cause to
be maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
(or such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee upon request with
copies of any such insurance policies and fidelity bond. 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. Any such errors and omissions policy and fidelity bond shall by
its terms not be cancelable without thirty days' prior written notice to the
Trustee. The Servicer shall also cause each Subservicer to maintain a policy of
insurance covering errors and omissions and a fidelity bond which would meet
such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. The Servicer is also
authorized to enter into a substitution of liability agreement with such person,
pursuant to which the original Mortgagor is released from liability and such
person is substituted as the Mortgagor and becomes liable under the Mortgage
Note, provided, that no such substitution shall be effective unless such person
satisfies the underwriting criteria of the Servicer and has a credit risk rating
at least equal to that of the original Mortgagor. In connection with any
assumption, modification or substitution, the Servicer shall apply such
underwriting standards and follow such practices and procedures as shall be
normal and usual in its general mortgage servicing activities and as it applies
to other mortgage loans owned solely by it. The Servicer shall not take or enter
into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Interest Rate
and the amount of the Scheduled Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with customary servicing practices as
described in Section 3.01, to foreclose upon or otherwise comparably convert
(which may include an acquisition of REO Property) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07, and which are not released from this
Agreement pursuant to any other provision hereof. The Servicer shall use
reasonable efforts to realize upon such defaulted Mortgage Loans in such manner
as will maximize the receipt of principal and interest by the Trustee, taking
into account, among other things, the timing of foreclosure proceedings. The
foregoing is subject to the provisions that, in any case in which Mortgaged
Property shall have suffered damage from an uninsured cause, the Servicer shall
not be required to expend its own funds toward the restoration of such property
unless it shall determine in its sole discretion (i) that such restoration will
increase the net proceeds of liquidation of the related Mortgage Loan to the
Trustee, after reimbursement to itself for such expenses, and (ii) that such
expenses will be recoverable by the Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the Servicer or
any Subservicer for any related unreimbursed Servicing Advances, pursuant to
Section 3.11 or 3.17; second, to accrued and unpaid interest on the Mortgage
Loan or REO Imputed Interest, at the Mortgage Interest Rate, to the date of the
liquidation or REO Disposition, or to the Due Date prior to the Remittance Date
on which such amounts are to be distributed if not in connection with a
liquidation or REO Disposition; third, to reimburse the Servicer for any related
xxxxxxxxxxxx X&X Advances, pursuant to Section 3.11; and fourth, as a recovery
of principal of the Mortgage Loan. If the amount of the recovery so allocated to
interest is less than a full recovery thereof, that amount will be allocated as
follows: first, to unpaid Servicing Fees; and second, as interest at the
Mortgage Interest Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The portions of
the recovery so allocated to interest at the Mortgage Interest Rate (net of the
Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied as
follows: first, to reimburse the Servicer or any Subservicer for any related
unreimbursed Servicing Advances in accordance with Section 3.11 or 3.17, and
second, to the Trustee in accordance with the provisions of Section 4.02,
subject to the last paragraph of Section 3.17 with respect to certain excess
recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Depositor directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all reasonable costs associated with such foreclosure or acceptance of a
deed in lieu of foreclosure and any related environmental clean-up costs, as
applicable, from the related Liquidation Proceeds, or if the Liquidation
Proceeds are insufficient to fully reimburse the Servicer, the Servicer shall be
entitled to be reimbursed from amounts in the Collection Account pursuant to
Section 3.11 hereof. In the event the Depositor directs the Servicer not to
proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Servicer shall be reimbursed from general collections for all Servicing Advances
made with respect to the related Mortgaged Property from the Collection Account
pursuant to Section 3.11 hereof.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, within five (5) Business Days of the payment in full, notify the
Trustee by a certification (which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Collection Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Custodial File. Upon receipt of such certification
and request, the Trustee shall promptly release the related Custodial File to
the Servicer within three (3) Business Days. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has 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 either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the deed
or certificate of sale shall be issued to the Servicer, or to its nominee, on
behalf of the Trustee.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee. The Servicer shall
notify the Trustee from time to time as to the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Trustee as to the progress being made in selling such REO
Property. Notwithstanding its veto rights, the Trustee has no obligation with
respect to REO Dispositions.
(d) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess
of the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the Lower Tier REMIC of such REO
Property subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
Lower Tier REMIC or Upper Tier REMIC to fail to qualify as a REMIC under the
REMIC Provisions or comparable provisions of relevant state laws at any time.
The Servicer shall manage, conserve, protect and operate each REO Property for
the Trustee solely for the purpose of its prompt disposition and sale in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) or result in the receipt by
the Lower Tier REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" which is subject to taxation under Section 860G(a)(1) of the Code.
Pursuant to its efforts to sell such REO Property, the Servicer shall either
itself or through an agent selected by the Servicer protect and conserve such
REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders, rent the same, or any part thereof, as the Servicer deems to
be in the best interest of the Trustee on behalf of the Certificateholders for
the period prior to the sale of such REO Property; provided, however, that any
rent received or accrued with respect to such REO Property qualifies as "rents
from real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Mortgage Loan, the Servicer shall adjust the Mortgage Interest Rate on the
related Adjustment Date and shall adjust the Scheduled Payment on the related
mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and Scheduled Payment adjustments. The Servicer shall
promptly, upon written request therefor, deliver to the Trustee such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments. Upon the discovery
by the Servicer or the receipt of notice from the Trustee that the Servicer has
failed to adjust a Mortgage Interest Rate or Scheduled Payment in accordance
with the terms of the related Mortgage Note, the Servicer shall deposit in the
Collection Account from its own funds the amount of any interest loss caused as
such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event the Servicer reasonably believes that
compliance with this Section will make the Mortgage Loans legal for investment
by federally insured savings and loan associations, the Servicer shall provide,
or cause the Subservicer to provide, to the Depositor, the Trustee, the OTS or
the FDIC and the examiners and supervisory agents thereof access to the
documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. Such access shall be afforded without charge,
but only upon reasonable and prior written request and during normal business
hours at the offices of the Servicer, the Depositor, the Trustee or any
Subservicer. Nothing in this Section shall derogate from the obligation of such
party to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of such party to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds collected
or held by, or under the control of, the Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including, but not limited to, any funds on deposit in its
Collection Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. The Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Collection Account, the Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders, to any claim, lien, security
interest, judgment, levy, writ of attachment or other encumbrance, or assert by
legal action or otherwise any claim or right of setoff against any Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that the Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to the Servicer
under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Insurance Proceeds and REO Proceeds related to such Mortgage Loan, the
Servicing Fee with respect to each Mortgage Loan (less any portion of such
amounts retained by any Subservicer). In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of related late collections to the
extent permitted in Section 3.11. The right to receive the Servicing Fee may not
be transferred in whole or in part except in connection with the transfer of all
of the Servicer's responsibilities and obligations under this Agreement;
provided, however, that the Servicer may pay from the Servicing Fee any amounts
due to a Subservicer pursuant to a Subservicing Agreement entered into under
Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Penalties) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies and the
Trustee on or before March 15th of each calendar year, commencing in 2003, an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Servicer during the preceding calendar year and of
performance under this Agreement or a similar 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 of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. Promptly after receipt of such
Officer's Certificate, the Depositor shall review such Officer's Certificate
and, if applicable, consult with the Servicer as to the nature of any defaults
by the Servicer in the fulfillment of any of the Servicer's obligations.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2003, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Servicer, the Rating Agencies and the Trustee a report stating
that (i) it has obtained a letter of representation regarding certain matters
from the management of the Servicer which includes an assertion that the
Servicer has complied with certain minimum residential mortgage loan servicing
standards, identified in the Uniform Single Attestation Program for Mortgage
Bankers established by the Mortgage Bankers Association of America, with respect
to the servicing of residential mortgage loans during the most recently
completed fiscal year and (ii) on the basis of an examination conducted by such
firm in accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Subservicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Subservicers. Promptly after receipt of such report, the Depositor shall review
such report and, if applicable, consult with the Servicer as to the nature of
any defaults by the Servicer in the fulfillment of any of the Servicer's
obligations.
Section 3.24 Trustee to Act as Servicer. (a) In the event that the
Servicer shall for any reason no longer be the Servicer hereunder (including by
reason of an Event of Default), the Trustee or its successor shall, subject to
the rights of the Depositor to appoint a successor Servicer pursuant to Section
7.02, thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter (except that the Trustee shall not be (i) liable
for losses of the Servicer pursuant to Section 3.10 or any acts or omissions of
the predecessor Servicer hereunder, (ii) obligated to make Advances if it is
prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including but not
limited to repurchases or substitutions pursuant to Section 2.03, (iv)
responsible for expenses of the Servicer pursuant to Section 2.03 or (v) deemed
to have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer
shall contain a provision giving the successor Servicer the option to terminate
such agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to
Compensating Interest payable by the Servicer for such Remittance Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer shall fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on the related
Mortgagor credit files to Equifax, Experian, and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans and the related borrowers and shall
provide all required notices thereunder.
Section 3.27 [Reserved]
Section 3.28 Excess Reserve Fund Account; Distribution Account.
(a) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders, to secure their
limited recourse obligation to pay to the Offered Certificateholders Basis Risk
Carry Forward Amounts. On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment for such date into the Excess Reserve Fund
Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class of Certificates, the Trustee shall (1) withdraw from
the Distribution Account and deposit in the Excess Reserve Fund Account, as set
forth in Section 4.02(a)(iii)(I), the lesser of the Class X Distributable Amount
(without regard to the reduction in the definition thereof with respect to the
Basis Risk Carry Forward Amount) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(H)) and the Basis Risk
Carry Forward Amount and (2) withdraw from the Excess Reserve Fund Account
amounts necessary to pay to such Class or Classes of Certificates the Basis Risk
Carry Forward Amount. Such payments shall be allocated to those Classes on a pro
rata basis based upon the amount of Basis Risk Carry Forward Amount owed to each
such Class and shall be paid in the priority set forth in Section
4.02(a)(iii)(J) hereof.
The Trustee shall account for the Excess Reserve Fund Account as an
outside reserve fund within the meaning of Treasury regulation 1.860G-2(h) and
not as an asset of any REMIC created pursuant to this Agreement. The beneficial
owner of the Excess Reserve Fund Account is the Class X Certificateholder. For
all federal income tax purposes, amounts transferred by the Upper Tier REMIC to
the Excess Reserve Fund Account shall be treated as distributions by the Trustee
to the Class X Certificateholder.
Any Basis Risk Carry Forward Amounts paid by the Trustee to the
Offered Certificateholders shall be accounted for by the Trustee as amounts paid
first to the Holders of the Class X Certificate and then to the respective Class
or Classes of Offered Certificates. In addition, the Trustee shall account for
the Offered Certificateholders' rights to receive payments of Basis Risk Carry
Forward Amounts as rights in a limited recourse interest rate cap contract
written by the Class X Certificateholders in favor of the Offered
Certificateholders.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve Fund
Account except as expressly set forth in this Section 3.28(a).
(b) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt on the Business Day received, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans,
which Scheduled Payments were not received as of the close of business on the
Business Day preceding such Remittance Date, plus (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which such REO Property an REO Disposition did not
occur during the related Prepayment Period, an amount equal to the excess, if
any, of the Scheduled Payments (with each interest portion thereof net of the
related Servicing Fee) that would have been due on the related Due Date in
respect of the related Mortgage Loans, over the net income from such REO
Property transferred to the Collection Account for distribution on such
Remittance Date.
(b) On the Remittance Date, the Servicer shall remit in
immediately available funds to the Trustee an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Remittance Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of Collection Account that Amounts Held For Future Distribution have
been, as permitted by this Section 4.01, used by the Servicer in discharge of
any such P&I Advance) or (iii) in the form of any combination of (i) and (ii)
aggregating the total amount of P&I Advances to be made by the Servicer with
respect to the Mortgage Loans and REO Properties. Any Amounts Held For Future
Distribution and so used shall be appropriately reflected in the Servicer's
records and replaced by the Servicer by deposit in the Collection Account on or
before any future Remittance Date to the extent required.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I
Advance or Servicing Advance shall be required to be made hereunder by the
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 hereof for Servicing Advances
from recoveries from the related Mortgagor or from all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall, from funds on deposit in the Distribution Account, make
the disbursements and transfers from amounts then on deposit in the Distribution
Account in the following order of priority and to the extent of the Available
Funds remaining:
(i) to the holders of each Class of Certificates in the following
order of priority:
(A) to the Class A Certificates, the related Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for such Distribution Date, allocated in accordance with
classes (iv) and (v) of this Section 4.02(a);
(B) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(C) to the Class M-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(D) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date; and
(E) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (a) before the related Stepdown
Date or (b) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of Offered Certificates then
entitled to distributions of principal as set forth below, from amounts
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(a) to the Class A Certificates, allocated as described in
Section 4.02(c), until the respective Class Certificate Balances
thereof are reduced to zero;
(b) sequentially to the Class M-1, Class M-2, Class B-1 and
Class B-2 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (a) on and after the related
Stepdown Date and (b) as long as a Trigger Event is not in effect, to the
holders of the related Class or Classes of Offered Certificates then
entitled to distribution of principal, from amounts remaining on deposit
in the Distribution Account after making distributions pursuant to clause
(i) above, an amount equal to, the Principal Distribution Amount in the
following amounts and order of priority:
(a) the lesser of (x) the Principal Distribution Amount and
(y) the Class A Principal Distribution Amount to the Class A
Certificates, allocated as described in Section 4.02(c), until the
respective Class Certificate Balances thereof are reduced to zero;
(b) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and (y) the Class M-1
Principal Distribution Amount to the Class M-1 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(c) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and to the Class M-1
Certificates in clause (ii)(B)(b) above and (y) the Class M-2
Principal Distribution Amount to the Class M-2 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(d) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above and to the Class M-2
Certificates in clause (ii)(B)(c) above and (y) the Class B-1
Principal Distribution Amount to the Class B-1 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero; and
(e) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the Class M-1
Certificates in clause (ii)(B)(b) above, to the Class M-2
Certificates in clause (ii)(B)(c) above, to the Class B-1
Certificates in clause (ii)(B)(d) above and (y) the Class B-2
Principal Distribution Amount to the Class B-2 Certificateholders,
until the Class Certificate Balance thereof has been reduced to
zero;
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amounts for such Class;
(D) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(E) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(F) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(G) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(H) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(I) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(J) from funds on deposit in the Excess Reserve Fund Account,
an amount equal to any Basis Risk Carry Forward Amount with respect
to any Offered Certificate for such Distribution Date to the Offered
Certificates in the same order and priority in which Accrued
Certificate Interest Distribution Amount is allocated among those
Classes of Certificates with the allocation to the Class A-1 and
Class A-2 Certificates being pro rata based on their respective
Basis Risk Carry Forward Amounts;
(K) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(J); and
(L) to the holders of the Class R Certificates, any remaining
amount;
(iv) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
I Mortgage Loans will be allocated:
(a) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-1 Certificates;
(b) second, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A) to the Class A-2A
and Class A-2B Certificates), to the Class A-2A and the Class A-2B
Certificates, Certificates, the Accrued Certificate Interest
Distribution Amount and any Unpaid Interest Amounts for each such
Class, to the extent not otherwise previously paid from the interest
component of Available Funds attributable to Group II Mortgage
Loans; and
(v) Solely for purposes of interest allocation calculations, the
portion of the interest component of Available Funds attributable to Group
II Mortgage Loans will be allocated:
(a) first, pro rata (based on the accrued and unpaid interest
distributable pursuant to Section 4.02(a)(i)(A) to the Class A-2A
and A-2B Certificates) to the Class A-2A and Class A-2B
Certificates, the Accrued Certificate Interest Distribution Amount
and any Unpaid Interest Amounts for each such Class; and
(b) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid Interest
Amounts for the Class A-1 Certificates to the extent not otherwise
previously paid from the interest component of Available Funds
attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related Accrued
Certificate Interest Distribution Amount or the related Unpaid Interest Amounts,
if any, then that unpaid amount will be recoverable by the holders of those
Classes, with interest thereon, on future Distribution Dates, as Unpaid Interest
Amounts, subject to the priorities described above.
(b) On each Distribution Date, all amounts representing Prepayment
Penalties from the Mortgage Loans received during the related Prepayment Period
will be distributed to the holders of the Class P Certificates.
(c) All principal distributions to the holders of the Class A
Certificates on any Distribution Date will be allocated between the Class A-1
Certificates and the Class A-2 Certificates based on the Class A Principal
Allocation Percentage for the Class A-1 Certificates or the Class A-2
Certificates, as applicable; provided, however, that if the Class Certificate
Balance of either Class A Certificate Group is reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on that Distribution Date, and the amount of principal
distributions distributable on all subsequent Distribution Dates will be
distributed to the holders of the Classes of the other Class A Certificate Group
remaining outstanding, in accordance with the principal distribution allocations
set forth in this Section 4.02(c), until their Class Certificate Balances have
been reduced to zero. Any payments of principal to the Class A-1 Certificates
shall be made first from Available Funds relating to the Group I Mortgage Loans.
Any payments of principal to the Class A-2 Certificates shall be made first from
Available Funds relating to the Group II Mortgage Loans. Any principal
distributions allocated to the Class A-2 Certificates shall be distributed first
to the Class A-2A Certificates until their Class Certificate Balance has been
reduced to zero, and then to the Class A-2B Certificates until their Class
Certificate Balance has been reduced to zero; provided, however, that from and
after the Distribution Date on which the aggregate Class Certificate Balance of
the Subordinated Certificates have been reduced to zero, any principal
distributions allocated to the Class A-2 Certificates will be allocated pro rata
to the Class A-2A and Class A-2B Certificates, based on their respective Class
Certificate Balances.
(d) On any Distribution Date, any Relief Act Interest Shortfalls
and Net Prepayment Interest Shortfalls for such Distribution Date will be
allocated pro rata, as a reduction of the Accrued Certificate Interest for the
Class A, Class M and Class B Certificates, based on the amount of interest to
which such classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor, the Responsible Party and each
Rating Agency a statement setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
after giving effect to the distribution of principal on such Distribution
Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Servicing Fees paid to or retained by the
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
servicer as outstanding as of the close of business on such Distribution
Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) For each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Losses and Unpaid Interest Amounts;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) Prepayment Penalties collected by Servicer;
(xix) [Reserved]
(xx) the Cumulative Loss Percentage.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Servicer, the Responsible
Party and the Depositor is limited to the availability, timeliness and accuracy
of the information derived from the Servicer. The Trustee will provide the above
statement via the Trustee's internet website. The Trustee's website will
initially be located at http:\\xxx.xxxxxxxxxxxxxx.xx.xxx and assistance in using
the website can be obtained by calling the Trustee's investor relations desk at
0-000-000-0000. A paper copy of the above statement will also be made available
upon request.
Upon written request from the Certificateholders, the Trustee shall
provide the information provided for in Sections 4.03(e) and Section 4.03(f) to
the Certificateholders, at the expense of the requesting Certificateholders. The
Trustee's responsibility for providing the information provided for in Sections
4.03(e) and 4.03(f) to the Certificateholders is limited to the availability and
timeliness of the information provided by the Servicer. The Trustee shall
provide the information provided for in Sections 4.03(e) and 4.03(f) in the same
format as received from the Servicer upon request by the Certificateholders. The
Trustee shall have no duty or obligation to monitor, review or take any action
regarding such information received pursuant to Section 4.03(e) and/or 4.03(f)
other than forwarding copies to Certificateholders. The Trustee shall have no
liability for the accuracy, completeness or otherwise for such information.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Reporting Date, the Servicer shall furnish
to the Trustee a monthly remittance advice statement (in a format mutually
agreed upon by the Servicer and the Trustee) containing such information as
shall be reasonably requested by the Trustee to provide the reports required by
Section 4.03(a) as to the accompanying remittance and the period ending on the
close of business on the last Business Day of the immediately preceding month
(the "Servicer Remittance Report").
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the Reporting
Date, which report shall contain the following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Penalties, along with a detailed report of interest on
principal prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Section 3.05; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3) 91
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
(e) The Servicer shall provide the Trustee, the Responsible Party
and the Depositor with full, continuous access to its online mortgage loan
servicing data system (Datamart) (the "Data System") with respect to the
Mortgage Loans.
To the extent that the Data System is not available, or the
information in the following documents is not available on the Data System or
the Servicer fails to provide any report set forth in Section 4.03(f) or Exhibit
M hereof in a timely manner, the Servicer shall provide the documentation listed
below to the Depositor, the Responsible Party and the Trustee in an electronic
format acceptable to the Trustee and the Depositor:
(i) Initiation of foreclosure - the Servicer shall deliver to the
Depositor and the Trustee a copy of the collection comments and a current
BPO;
(ii) Deed-In-Lieu of Foreclosure - the Servicer shall deliver to the
Depositor and the Trustee a copy of current value and a copy of a title
report showing clean title;
(iii) Bidding instructions at foreclosure sale - the Servicer shall
deliver to the Depositor and the Trustee a statement of total debt and
current BPO;
(iv) Short sale - the Servicer shall deliver to the Depositor and
the Trustee a statement of the Mortgagor's hardship, current BPO, and
statement detailing net proceeds to the Depositor and the Trustee;
(v)REO Property list price - the Servicer shall deliver to the
Depositor and the Trustee a current BPO done at the time of taking title
to the REO Property and broker's recommendation for list price;
(vi) REO Property sales price - the Servicer shall deliver to the
Depositor and the Trustee a summary of the REO contract being proposed;
and
(vii) REO Property net proceeds - the Servicer shall deliver to the
Depositor and the Trustee a copy of HUD-1 statement prior to closing.
(f) On the 5th Business Day of each month (the "Data File Delivery
Date"), the Servicer shall deliver to the Trustee and the Depositor a Market
Value Change Report and a data file incorporating the fields set forth in the
data file layout set forth on Exhibit M hereto (the "Data File"). In the event
that the Servicer is unable to provide the complete data file on such Data File
Delivery Date, the Servicer shall provide to the Trustee and the Depositor
additional reports as set forth on Exhibit M hereto (the "Backup Reports") on or
prior to the 8th Business Day of such month (the "Backup Report Delivery Date")
in an electronic format acceptable to the Trustee and the Depositor.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
Until all of the Offered Certificates are paid in full, the Trustee will at all
times retain at least four Reference Banks for the purpose of determining LIBOR
with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(i) The Pass-Through Rate for each Class of Offered Certificates for
each Interest Accrual Period shall be determined by the Trustee on each
LIBOR Determination Date so long as the Offered Certificates are
outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the Offered Certificates in the table relating
to the Certificates in the Preliminary Statement. The Trustee shall not
have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate
for the Offered Certificates by the Trustee shall (in the absence of
manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinate Certificates then outstanding in reduction of the Class Certificate
Balance thereof.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount which must be in excess of the applicable minimum denomination)
and aggregate denominations per Class set forth in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
Certificates and the Class P Certificates in the name of the Depositor. On
September 27, 2002, or such other date as to which the Depositor notifies the
Trustee, the Depositor hereby directs the Trustee to transfer the Class X
Certificates and the Class P Certificates as follows: "Deutsche Bank National
Trust Company, as Indenture Trustee on behalf of the Noteholders of the GSAMP
NIM Trust 2002-WMC1N," and to deliver such Class X Certificates and Class P
Certificates to Deutsche Bank National Trust Company, as indenture trustee.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor as directed by that
Certificateholder by written wire instructions provided to the trustee or (y),
in the event that no wire instructions are provided to the Trustee, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the transfer of the Class X and Class P Certificates to the NIM
Trust, in the event that a transfer of a Private Certificate which is a Physical
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer shall certify to
the Trustee in writing the facts surrounding the transfer in substantially the
form set forth in Exhibit H (the "Transferor Certificate") and either (i) there
shall be delivered to the Trustee a letter in substantially the form of Exhibit
I (the "Rule 144A Letter") or (ii) in the case of the Class X Certificates,
there shall be delivered to the Trustee at the expense of the transferor an
Opinion of Counsel that such transfer may be made without registration under the
Securities Act. In the event that a transfer of a Private Certificate which is a
Book-Entry Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such laws, the Certificateholder desiring to effect such transfer will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee and the Servicer shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee and the
Depositor and the Servicer against any liability that may result if the transfer
is not so exempt or is not made in accordance with such federal and state laws.
Except with respect to the transfer of the Class X and Class P
Certificates to the NIM Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received either (i) a representation from the transferee of such Certificate
acceptable to and in form and substance satisfactory to the Trustee (in the
event such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Trustee's receipt of a representation
letter from the transferee substantially in the form of Exhibit I), to the
effect that such transferee is not an employee benefit plan or arrangement
subject to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law ("Similar Law") materially
similar to the foregoing provisions of ERISA or the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, (ii) in the case of an ERISA-Restricted
Certificate other than a Residual Certificate or a Class P Certificate that has
been the subject of an ERISA-Qualifying Underwriting and the purchaser is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (iii) in the case of any such ERISA-Restricted Certificate other than a
Residual Certificate or Class P Certificate presented for registration in the
name of an employee benefit plan subject to Title I of ERISA, a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and the Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code or similar violation of Similar Law and will not subject the Trustee or
the Servicer to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of the preceding sentence, with
respect to an ERISA-Restricted Certificate that is not a Private Certificate or
a Residual Certificate, in the event the representation letter referred to in
the preceding sentence is not furnished, such representation shall be deemed to
have been made to the Trustee by the transferee's (including an initial
acquirer's) acceptance of the ERISA-Restricted Certificates. In the event that
such representation is violated, or any attempt to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
without such Opinion of Counsel, such attempted transfer or acquisition shall be
void and of no effect.
The Class R Certificate may not be sold to any employee benefit plan
subject to Title I of ERISA, any plan subject to Section 4975 of the Code, or
any plan subject to any Similar Law or any person investing on behalf of or with
plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Responsible Party or the Servicer, to the effect that the elimination of such
restrictions will not cause either the Lower Tier REMIC or Upper Tier REMIC to
fail to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Residual Certificate hereby consents to any amendment of this Agreement which,
based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Residual Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate which is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, countersign and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor and any agent of the Servicer, the Depositor or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee, the Depositor nor any agent of the Servicer, the Depositor or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in New York City where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates the
offices of its agent for such purposes located at DTC Transfer Agent Services,
00 Xxxxx Xxxxxx, Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Trustee
will give prompt written notice to the Certificateholders of any change in such
location of any such office or agency. As of the Closing Date, the Trustee
designates the office of its agent located c/o DTC Transfer Agent Services, 00
Xxxxx Xxxxxx, Xxxxxxxx Xxxx Entrance, Xxx Xxxx, Xxx Xxxx 00000 for purposes of
transfers, exchanges or surrenders.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx or
FHLMC and provided, further, that such merger, consolidation or succession does
not adversely affect the then current rating or ratings on the Offered
Certificates.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor or the
Servicer and any director, officer, employee or agent of the Depositor and the
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence (or gross negligence in
the case of the Depositor) in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the Depositor
nor the Servicer shall be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that each of the Depositor and the Servicer may in its discretion
undertake any such action (or direct the Trustee to undertake such actions
pursuant to Section 2.03 hereof for the benefit of the Certificateholders) that
it may deem necessary or desirable in respect of this Agreement and the rights
and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Servicer shall be entitled
to be reimbursed therefor out of the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. The Servicer
shall not assign this Agreement or resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer, the Depositor and the
Trustee or upon the determination that its duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Depositor and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Depositor and the Trustee. No such resignation shall
become effective until a successor shall have assumed the Servicer's
responsibilities and obligations hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Responsible Party, the Depositor and
the Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any breach by the Servicer of (i) any of its
representations and warranties referred to in Section 2.03(a), (ii) any error in
any tax or information return prepared by the Servicer, or (iii) the failure of
the Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement. The Servicer immediately shall notify the
Depositor and the Trustee if such claim is made by a third party with respect to
this Agreement or the Mortgage Loans, assume (with the prior written consent of
the Depositor and the Trustee) the defense of any such claim and pay all
expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against it or the Responsible Party, the Depositor or the Trustee in respect of
such claim.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor or by the Trustee, or to the Servicer, the
Depositor and the Trustee by Certificateholders evidencing percentage interests
of at least 25% in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of thirty days (except that such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor or by the Trustee, or to the
Servicer, the Depositor and the Trustee by Certificateholders of Certificates
evidencing percentage interests of at least 25% in the Certificates and (ii)
actual knowledge of such failure by a Servicing Officer of the Servicer;
provided, however, that in the case of a failure or breach that cannot be cured
within 30 days after notice or actual knowledge by the Servicer, the cure period
may be extended for an additional 30 days upon delivery by the Servicer to the
Trustee of a certificate to the effect that the Servicer believes in good faith
that the failure or breach can be cured within such additional time period and
the Servicer is diligently pursuing remedial action; or
(c) the failure by the Servicer in any month, (a) to deliver to
the Trustee and the Depositor (i) the Data File and the Market Value Change
Report on the Data File Delivery Date and (ii) the Backup Reports set forth on
Exhibit M on the Backup Report Delivery Date, (b) to deliver to the Trustee and
the Depositor, the Data File and the Market Value Change Report on the Data File
Delivery Date, or (c) to deliver the Servicer Remittance Report to the Trustee,
and in each case such failure continues uncured for more than 30 days; or
(d) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(e) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(f) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(g) if a Cumulative Loss Trigger occurs; or
(h) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(i) the failure of the Servicer to meet the "Termination
Standards" set forth in the Servicing Performance Standards and Exceedances
occurs and continues as follows: (w) the occurrence of any five (5) Exceedances
of Level 1 Termination Standards for three (3) consecutive months, or (x) the
occurrence of any three (3) Exceedances of Level 1 Termination Standards for six
(6) consecutive months, or (y) the occurrence of the same Exceedance of Xxxxx 0
Xxxxxxxxxxx Xxxxxxxxx for nine (9) consecutive months, or (z) the occurrence of
any four (4) Exceedances of Xxxxx 0 Xxxxxxxxxxx Xxxxxxxxx and the occurrence of
any four (4) Exceedances of Level 2 Termination Standards for three (3)
consecutive months; or
(j) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or by the Depositor, or to the Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates.
If an Event of Default described in clauses (a) through (j) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, or at the
direction of 51% of the Voting Rights, the Trustee shall, by notice in writing
to the Servicer (with a copy to each Rating Agency), terminate all of the rights
and obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder; provided, however, that the Trustee shall not be required to give
written notice to the Servicer of the occurrence of an Event of Default
described in clauses (b) through (j) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an Event of Default. On and after the receipt by the Servicer of such
written notice, all authority and power of the Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee. The Trustee is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee of all cash amounts which shall at the time be
credited to the Collection Account, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid portion of the Servicing Fees to which the Servicer would have been
entitled and reimbursement for all outstanding P&I Advances and Servicing
Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.06, and subject to the rights of the Depositor to appoint a successor
Servicer pursuant to this Section 7.02, be the successor to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof and applicable law including the obligation to make P&I Advances or
Servicing Advances pursuant to Section 4.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that the
Servicer would have been entitled to charge to the Collection Account if the
Servicer had continued to act hereunder including, if the Servicer was receiving
the Servicing Fee, the Servicing Fee and the income on investments or gain
related to the Collection Account (in addition to income on investments or gain
related to the Distribution Account for the benefit of the Trustee).
Notwithstanding the foregoing, if the Trustee has become the successor to the
Servicer in accordance with this Section 7.02, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01 or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor to the Servicer shall be an
institution which is a Xxxxxx Xxx and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 incurred prior to termination of the Servicer under
Section 7.01), with like effect as if originally named as a party to this
Agreement; provided, that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.05, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it, the
Depositor, and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee Rate and amounts paid to
the Servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide, or
any delay in delivering or providing, any cash, information, documents or
records to it.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer, in accordance with applicable federal and
state law, and shall, during the term of its service as servicer, maintain in
force the policy or policies that the Servicer is required to maintain pursuant
to Section 3.13.
Notwithstanding anything to the contrary contained in this
Agreement, the Depositor, as the owner of the Servicing Rights, shall have the
right to appoint a successor to the Servicer upon termination of the servicing
pursuant to Section 3.24 or Section 7.01. Any such successor Servicer shall be
required to satisfy the requirements of a successor Servicer under this Section
7.02. In the event the Depositor sells the Servicing Rights to a successor
Servicer, the Depositor shall retain all proceeds, net of expenses, incurred, in
connection with such transaction.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and to each Rating
Agency.
(b) Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own bad faith or willful misfeasance.
Unless an Event of Default known to the Trustee has occurred and is
continuing,
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and except with respect to the investment of funds in the Distribution
Account not made at the direction of the Depositor during the Trustee Float
Period);
(h) the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received
written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and,
during the Trustee Float Period, any interest or investment income earned on
funds deposited in the Distribution Account. The Trustee and any director,
officer, employee, or agent of the Trustee shall be indemnified by the Trust
Fund and held harmless against any loss, liability, or expense (including
reasonable attorney's fees) incurred in connection with any claim or legal
action relating to
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of the Responsible Party's obligations in
connection with this Agreement for which the Responsible Party has performed its
obligation to indemnify the Trustee pursuant to Section 2.03(h), or (iii)
incurred because of willful misfeasance, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Trustee under this Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misfeasance, the Trust Fund shall pay or reimburse the
Trustee, for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the Certificates,
(B) the reasonable compensation, expenses, and disbursements of
any accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement, and
(C) printing and engraving expenses in connection with preparing any
Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer, each Rating Agency
not less than 60 days before the date specified in such notice, when, subject to
Section 8.08, such resignation is to take effect, and acceptance by a successor
trustee in accordance with Section 8.08 meeting the qualifications set forth in
Section 8.06. If no successor trustee meeting such qualifications shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to the Servicer and one copy
to the successor trustee.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder, provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each REMIC described in the
Preliminary Statement and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each REMIC described
in the Preliminary Statement containing such information and at the times and in
the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC and the
Upper Tier REMIC be treated as a REMIC on the federal tax return for its first
taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a
Non-Permitted Transferee is the record holder of an interest (the reasonable
cost of computing and furnishing such information may be charged to the Person
liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each of the Upper Tier REMIC and Lower Tier REMIC as a
REMIC under the REMIC Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of either the
Lower Tier REMIC or the Upper Tier REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on the Lower Tier REMIC and the
Upper Tier REMIC before its termination when and as the same shall be due and
payable (but such obligation shall not prevent the Trustee or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Trustee from withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Trustee or such other person as may be required to
sign such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to the Lower Tier REMIC and the
Upper Tier REMIC, including the income, expenses, assets, and liabilities
thereof on a calendar year basis and on the accrual method of accounting and the
fair market value and adjusted basis of the assets determined at such intervals
as may be required by the Code, as may be necessary to prepare the foregoing
returns, schedules, statements or information; and
(k) as and when necessary and appropriate, represent the Lower
Tier REMIC and the Upper Tier REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of the
Lower Tier REMIC and the Upper Tier REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of the Lower Tier REMIC and the Upper Tier REMIC, and otherwise act
on behalf of each REMIC in relation to any tax matter or controversy involving
it.
The Trustee shall treat the rights of the Class P Certificateholders
to Prepayment Penalties as the beneficial ownership of interests in a grantor
trust, and the rights of the Offered Certificateholders to receive Basis Risk
Carry Forward Amounts as an interest rate cap contract and not as an obligations
of any REMIC created hereunder, for federal income tax purposes.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk Carry Forward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of either the
Lower Tier REMIC or the Upper Tier REMIC as defined in Section 860F(a)(2) of the
Code, on the "net income from foreclosure property" of the Lower Tier REMIC as
defined in Section 860G(c) of the Code, on any contribution to either REMIC
after the Startup Day pursuant to Section 860G(d) of the Code, or any other tax
is imposed, including any minimum tax imposed on either REMIC pursuant to
Sections 23153 and 24874 of the California Revenue and Taxation Code, if not
paid as otherwise provided for herein, the tax shall be paid by (i) the Trustee
if such tax arises out of or results from negligence of the Trustee in the
performance of any of its obligations under this Agreement, (ii) the Servicer,
in the case of any such minimum tax, and otherwise if such tax arises out of or
results from a breach by the Servicer of any of its obligations under this
Agreement, (iii) a Responsible Party if such tax arises out of or results from
that Responsible Party's obligation to repurchase a Mortgage Loan pursuant to
Section 2.03, or (iv) in all other cases, or if the Trustee, the Servicer, or
the Responsible Party fails to honor its obligations under the preceding clause
(i), (ii), or (iii), any such tax will be paid with amounts otherwise to be
distributed to the Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Trustee shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission thereunder, and the Trustee shall sign and
file (via the Securities and Exchange Commission's Electronic Data Gathering and
Retrieval System) such Forms on behalf of the Depositor, if an officer of the
Depositor signs the Certification pursuant to paragraph (b) of this Section
8.12, or otherwise on behalf of the Trust. In the event the Trustee is signing
on behalf of the Depositor pursuant to the preceding sentence, the Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of either (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. Notwithstanding the foregoing, in the event that the
Securities and Exchange Commission does not accept a Certification signed by the
Depositor where the related Form 10-K is signed by the Trustee on behalf of the
Depositor, the Trustee shall prepare such Form 10-K to be signed by the
Depositor and the Depositor shall sign such form.
(b) Each Form 8-K shall be filed by the Trustee within 15 days
after each Distribution Date, including a copy of the statement to the
Certificateholders for such Distribution Date as an exhibit thereto. Prior to
March 30th of each year (or such earlier date as may be required by the Exchange
Act and the Rules and Regulations of the Securities and Exchange Commission),
the Trustee shall file a Form 10-K, in substance as required by applicable law
or applicable Securities and Exchange Commission staff's interpretations. Such
Form 10-K shall include as exhibits the Servicer's annual statement of
compliance described under Section 3.22 and the accountant's report described
under Section 3.23, in each case to the extent they have been timely delivered
to the Trustee. If they are not so timely delivered, the Trustee shall file an
amended Form 10-K including such documents as exhibits reasonably promptly after
they are delivered to the Trustee. The Trustee shall have no liability with
respect to any failure to properly prepare or file such periodic reports
resulting from or relating to the Trustee's inability or failure to obtain any
information not resulting from its own negligence, willful misconduct or bad
faith. The Form 10-K shall also include a certification in the form attached
hereto as Exhibit N (the "Certification"), which shall, except as described
below, be signed by the senior officer of the Depositor in charge of
securitization. Notwithstanding the foregoing, if it is determined by the
Depositor that the Certification may be executed by multiple persons, the
Trustee shall sign the Certification in respect of items 1 through 3 thereof and
the Servicer shall cause the senior officer in charge of servicing at the
Servicer to sign the Certification in respect of items 4 and 5 thereof, and the
Trustee may rely on the Certification signed by the Servicer to the same extent
as provided in subsection (c) below.
(c) In the event the Certification is to be signed by an officer
of the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit O) for the benefit of the Depositor and its officers,
directors and Affiliates in respect of items 1 through 3 of the Certification
(provided, however, that the Trustee shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K), and the Servicer
shall sign a certification (in the form attached hereto as Exhibit O) for the
benefit of the Depositor, the Trustee and their officers, directors and
Affiliates in respect of items 4 and 5 of the Certification. Each such
certification shall be delivered to the Depositor and the Trustee by March 20th
of each year (or if not a Business Day, the immediately preceding Business Day).
The Certification attached hereto as Exhibit N shall be delivered to the Trustee
for filing by March 25th of each year (or if not a Business Day, the immediately
preceding Business Day). In addition, (i) the Trustee shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Servicer's obligations
under this Section 8.12(c) or the Servicer's negligence, bad faith or willful
misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission,
the Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file a Form 15 Suspension
Notification with respect to the Trust.
Section 8.13 Tax Classification of the Excess Reserve Fund Account.
For federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account as beneficially owned by the holder of the Class X Certificate and shall
treat such portion of the Trust Fund as a grantor trust under subpart E, Part I
of subchapter J of the Code. The Trustee shall treat the rights that each Class
of Offered Certificates has to receive payments of Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account as rights to receive payments under
an interest rate cap contract written by the Class X Certificateholder in favor
of each Class. Accordingly, each Class of Certificates (excluding the Class X,
Class P and Class R Certificates) will comprise two components - an Upper Tier
Regular Interest and an interest in a cap contract. The Trustee shall allocate
the issue price for a Class of Certificates between two components for purposes
of determining the issue price of the Upper Tier Regular Interest component
based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by the Depositor, as owner of the Servicing Rights,
of all Mortgage Loans (and REO Properties) at the price equal to the sum of (i)
100% of the unpaid principal balance of each Mortgage Loan (other than in
respect of REO Property) plus accrued and unpaid interest thereon at the
applicable Mortgage Interest Rate and (ii) the lesser of (x) the appraised value
of any REO Property as determined by the higher of two appraisals completed by
two independent appraisers selected by the Depositor at the expense of the
Depositor and (y) the unpaid principal balance of each Mortgage Loan related to
any REO Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Interest Rate and (b) the later of (i) the maturity or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund and the disposition of all REO Property and (ii) the
distribution to Certificateholders of all amounts required to be distributed to
them pursuant to this Agreement. In no event shall the trusts created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to
the Court of St. James's, living on the date hereof.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder. If the Depositor elects
to terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date the Notice of Final Distribution is to be mailed to the
affected Certificateholders the Depositor shall notify the Servicer and the
Trustee of the date the Depositor intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month next preceding the month of such final
distribution. Any such Notice of Final Distribution shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Depositor or its designee the Custodial
Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class, in each
case on the final Distribution Date and in the order set forth in Section 4.02,
in proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates (except the Class X Certificate), the Certificate Balance
thereof plus for each such Class and the Class X Certificate accrued interest
thereon in the case of an interest-bearing Certificate and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Depositor exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Depositor, to the effect that the
failure to comply with the requirements of this Section 9.03 will not (i) result
in the imposition of taxes on "prohibited transactions" on either REMIC as
defined in Section 860F of the Code, or (ii) cause either the Lower Tier REMIC
or the Upper Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Depositor, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Lower Tier REMIC and the Upper Tier REMIC; and.
(b) The Trustee shall attach a statement to the final federal
income tax return for each of the Lower Tier REMIC and the Upper Tier REMIC
stating that pursuant to Treasury Regulations Section ss. 1.860F-1, the first
day of the 90-day liquidation period for each such REMIC was the date on which
the Trustee sold the assets of the Trust Fund to the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Responsible Party, the Servicer and the Trustee
without the consent of any of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct any defective provision herein or to supplement any
provision herein which may be inconsistent with any other provision herein,
(iii) to add to the duties of the Depositor or the Servicer, (iv) to add any
other provisions with respect to matters or questions arising hereunder or (v)
to modify, alter, amend, add to or rescind any of the terms or provisions
contained in this Agreement; provided, that any action pursuant to clause (iv)
or (v) above shall not, as evidenced by an Opinion of Counsel (which Opinion of
Counsel shall not be an expense of the Trustee or the Trust Fund), adversely
affect in any material respect the interests of any Certificateholder; provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Depositor, the Responsible Party and the Servicer also may at any time and from
time to time amend this Agreement, but without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of the
Lower Tier REMIC and the Upper Tier REMIC under the Code, (ii) avoid or minimize
the risk of the imposition of any tax on the Lower Tier REMIC or the Upper Tier
REMIC pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; provided, that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party and the Trustee with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 662/3% of each Class of Certificates affected thereby for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than 66
2/3%, or (iii) reduce the aforesaid percentages of Certificates the Holders of
which are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on either the Lower Tier REMIC or the Upper Tier
REMIC or the Certificateholders or cause either the Lower Tier REMIC or the
Upper Tier REMIC to fail to qualify as a REMIC at any time that any Certificates
are outstanding and (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the
Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
or any of its Affiliates or by the Responsible Party or any of its Affiliates
shall be deemed not to be outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 Recordation of Agreement; Counterparts. This Agreement
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Trust, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03;
2. [Reserved];
3. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor or GS Mortgage Securities Corp. or Xxxxxxx, Xxxxx & Co., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Principal Finance Group/Xxxxxxxxxxx
Xxxxxxx and Asset Management Group/Senior Asset Manager (and, in the case of the
Officer's Certificate delivered pursuant to Section 3.22, to
PricewaterhouseCoopers LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx), or such other address as may be
hereafter furnished to the Trustee, the Servicer and the Responsible Party by
the Depositor in writing, (b) in the case of the Servicer, Ocwen Federal Bank
FSB, 0000 Xxxx Xxxxx Xxxxx Xxxx., Xxxxx 00X, Xxxx Xxxx Xxxxx, Xxxxxxx, 00000,
Attention: Secretary, or such other address as may be hereafter furnished to the
Depositor, the Responsible Party and the Trustee by the Servicer in writing, (c)
in the case of the Trustee to the Corporate Trust Office, Deutsche Bank National
Trust Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000-0000,
Attention: Trust Administration-GS02M1, or such other address as the Trustee may
hereafter furnish to the Depositor, the Responsible Party or Servicer, (d) in
the case of the Responsible Party, WMC Mortgage Corp., 0000 Xxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000, Attention: General Counsel, or such
other address as the Responsible Party may hereafter furnish to the Depositor,
the Trustee or the Servicer and (e) in the case of each of the Rating Agencies,
the address specified therefor in the definition corresponding to the name of
such Rating Agency. Notices to Certificateholders shall be deemed given when
mailed, first class postage prepaid, to their respective addresses appearing in
the Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities.
(a) Notwithstanding anything to the contrary contained herein,
except as provided in Section 6.02(a), this Agreement may not be assigned by the
Servicer without the prior written consent of the Trustee and Depositor;
provided, however, (i) that the Servicer is hereby authorized to enter into an
Advance Facility under which (A) the Servicer sells, assigns or pledges to an
Advancing Person the Servicer's rights under this Agreement to be reimbursed for
any P&I Advances or Servicing Advances and/or (B) an Advancing Person agrees to
fund some or all P&I Advances or Servicing Advances required to be made by the
Servicer pursuant to this Agreement and (ii) the Servicer is hereby authorized
to assign its rights to a portion of the Servicing Fee equal to 0.275%; it being
understood neither the Trust Fund nor any party hereto shall have a right or
claim (including without limitation any right of offset) to the portion of the
Servicing Fee so assigned. No consent of the Trustee, Certificateholders or any
other party is required before the Servicer may enter into an Advance Facility.
Notwithstanding the existence of any Advance Facility under which an Advancing
Person agrees to fund P&I Advances and/or Servicing Advances on the Servicer's
behalf, the Servicer shall remain obligated pursuant to this Agreement to make
P&I Advances and Servicing Advances pursuant to and as required by this
Agreement, and shall not be relieved of such obligations by virtue of such
Advance Facility.
(b) Reimbursement amounts shall consist solely of amounts in
respect of P&I Advances and/or Servicing Advances made with respect to the
Mortgage Loans for which the Servicer would be permitted to reimburse itself in
accordance with this Agreement, assuming the Servicer had made the related P&I
Advance(s) and/or Servicing Advance(s).
(c) The Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
(d) An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
(e) The documentation establishing any Advance Facility shall
require that such reimbursement amounts distributed with respect to each
Mortgage Loan be allocated to outstanding xxxxxxxxxxxx X&X Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" (FIFO) basis. Such documentation shall also require the
Servicer to provide to the related Advancing Person or its designee loan-by-loan
information with respect to each such reimbursement amount distributed to such
Advancing Person or Advance Facility trustee on each Distribution Date, to
enable the Advancing Person or Advance Facility trustee to make the FIFO
allocation of each such reimbursement amount with respect to each Mortgage Loan.
The Servicer shall remain entitled to be reimbursed by the Advancing Person or
Advance Facility trustee for all P&I Advances and Servicing Advances funded by
the Servicer to the extent the related rights to be reimbursed therefor have not
been sold, assigned or pledged to an Advancing Person.
(f) Any amendment to this Section 10.07 or to any other provision
of this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 10.07, including
amendments to add provisions relating to a successor Servicer, may be entered
into by the Trustee, the Depositor and the Servicer without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
provided, that the Trustee has been provided an Opinion of Counsel that such
amendment has no material adverse effect on the Certificateholders which opinion
shall be an expense of the party requesting such opinion but in any case shall
not be an expense of the Trustee or the Trust Fund; provided, further, that the
amendment shall not be deemed to adversely affect in any material respect the
interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency (instead of obtaining an Opinion of
Counsel) stating that the amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates; it being
understood and agreed that any such rating letter in and of itself will not
represent a determination as to the materiality of any such amendment and will
represent a determination only as to the credit issues affecting any such
rating. Prior to entering into an Advance Facility, the Servicer shall notify
the lender under such facility in writing that: (a) the Advances financed by
and/or pledged to the lender are obligations owed to the Servicer on a
non-recourse basis payable only from the cash flows and proceeds received under
this Agreement for reimbursement of Advances only to the extent provided herein,
and the Trustee and the Trust are not otherwise obligated or liable to repay any
Advances financed by the lender; (b) the Servicer will be responsible for
remitting to the lender the applicable amounts collected by it as reimbursement
for Advances funded by the lender, subject to the restrictions and priorities
created in this Agreement; and (c) the Trustee shall not have any responsibility
to track or monitor the administration of the financing arrangement between the
Servicer and the lender.
Section 10.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor
or the Trustee during such Person's normal business hours, to examine all the
books of account, records, reports and other papers of such Person relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of the Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificate holders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 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 10.12 Limitation of Damages. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, THE PARTIES AGREE THAT NO PARTY SHALL BE
LIABLE TO ANY OTHER PARTY FOR ANY PUNITIVE DAMAGES WHATSOEVER, WHETHER IN
CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL
OR EQUITABLE PRINCIPLE, PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT BE
APPLICABLE WITH RESPECT TO THIRD PARTY CLAIMS MADE AGAINST A PARTY.
* * * * * * *
IN WITNESS WHEREOF, the Depositor, the Trustee, the Responsible
Party and the Servicer have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
GS MORTGAGE SECURITIES CORP.,
as Depositor
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Chief Executive Officer
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx Xxxxx
------------------------------------
Name: Xxxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Associate
OCWEN FEDERAL BANK FSB,
as Servicer
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
WMC MORTGAGE CORP.,
as Responsible Party
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
SCHEDULE I
Mortgage Loan Schedule
[Delivered at Closing to Trustee]
SCHEDULE II
GSAMP Mortgage Lean Trust 2002-WMC1,
Mortgage Pass-Through Certificates
Representations and Warranties of the Servicer
----------------------------------------------
OCWEN FEDERAL BANK FSB (the "Servicer") hereby makes the
representations and warranties set forth in this Schedule II to the Depositor
and the Trustee, as of the Closing Date, or if so specified herein, as of the
Cut-off Date.
(1) The Servicer is a federally chartered savings bank duly
organized, validly existing and in good standing under the laws of the
state of Ohio and is duly authorized and qualified to transact any and all
business contemplated by this Pooling and Servicing Agreement to be
conducted by the Servicer in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business
laws of any such State, to the extent necessary to ensure its ability to
enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing
Agreement and has duly authorized by all necessary action on the part of
the Servicer the execution, delivery and performance of this Pooling and
Servicing Agreement; and this Pooling and Servicing Agreement, assuming
the due authorization, execution and delivery thereof by the Depositor,
the Responsible Party and the Trustee, constitutes a legal, valid and
binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except to the extent that (a) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the
Servicer hereunder, the consummation by the Servicer of any other of the
transactions herein contemplated, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Servicer and will not (A) result in a breach of any term or provision of
the organizational documents of the Servicer or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which the
Servicer is a party or by which it may be bound, or any statute, order or
regulation applicable to the Servicer of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to
or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect,
(x) the ability of the Servicer to perform its obligations under this
Pooling and Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Servicer taken as a whole;
(4) the Servicer is an approved seller/servicer for Xxxxxx Xxx
and an approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability
of this Pooling and Servicing Agreement or the ability of the Servicer to
service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this
Pooling and Servicing Agreement or the consummation by the Servicer of the
transactions contemplated by this Pooling and Servicing Agreement, except
for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(7) The Servicer covenants that its computer and other systems used
in servicing the Mortgage Loans operate in a manner such that the Servicer
can service the Mortgage Loans in accordance with the terms of this
Pooling and Servicing Agreement.
SCHEDULE III
GSAMP Trust 2002-WMC1,
Mortgage Pass-Through Certificates
Representations and Warranties as to the Mortgage Loans
-------------------------------------------------------
The Responsible Party hereby makes the representations and
warranties set forth in this Schedule III as to the Mortgage Loans only to the
Depositor and the Trustee, as of the Closing Date, except as otherwise expressly
set forth below:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Original Purchase Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments for which the related due date was not thirty or more
days prior to the Original Purchase Date, have been made and credited. As of the
Original Purchase Date, no Mortgage Loan has a Thirty-day Delinquency nor has
the Mortgage Loan had a Thirty-day Delinquency at any time since the origination
of the Mortgage Loan. The first Monthly Payment after the Original Purchase Date
shall be made with respect to the Mortgage Loan on its Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. As of the Original Purchase Date, there
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Responsible Party has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any valid right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any valid right of rescission, set-off, counterclaim or defense, including
without limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or Federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and (ii)
the greater of (a) the outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac in an amount representing coverage not less than the
lesser of (i) the aggregate unpaid principal balance of the Mortgage Loan, (ii)
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, as amended (regardless of whether the area in which such
Mortgaged Property is located is participating in such program), and (iii) the
full replacement value of the improvements which are part of such Mortgaged
Property. All individual insurance policies contain a standard mortgagee clause
naming the Responsible Party and its successors and assigns as mortgagee, and
all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Responsible Party has not
engaged in, and has no knowledge of the Mortgagor's or any servicer's having
engaged in, any act or omission which would impair the coverage of any such
policy, the benefits of the endorsement provided for herein, or the validity and
binding effect of such policy, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Responsible Party;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Responsible Party shall maintain in its
possession, available for the Purchaser's inspection, and shall deliver to the
Purchaser upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Responsible Party has
not waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Responsible Party waived any default resulting from any action or
inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the
Responsible Party as mortgagee;
(j) Valid First and Second Lien. Each Mortgage is a valid and
subsisting first lien, with respect to First Lien Loans, or second lien, with
respect to Second Lien Loans, of record on a single parcel of real estate
constituting the Mortgaged Property, including all buildings and improvements on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time,
with respect to the foregoing. In no event shall any Mortgage Loan be in a lien
position more junior than a second lien. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal;
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property; and
(4) with respect to Second Lien Loans, the lien of the
first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Responsible Party has full right to
sell and assign the same to Purchaser. Except as set forth on the Mortgage Loan
Schedule, the Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(subject to bankruptcy and other laws affecting creditor's rights). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission (other than
omissions in accordance with the Responsible Party's Underwriting Guidelines
with respect to Mortgage Loans originated under a Limited Documentation
Program), misrepresentation or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the underwriting, origination or servicing of the Mortgage Loan. The
Responsible Party has reviewed all of the documents constituting the Servicing
File and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the time of the sale of the Mortgage Loans to
the Purchaser, the Responsible Party was the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged by the Responsible Party, and
immediately prior to the Original Purchase Date, the Responsible Party had good,
indefeasible and marketable title thereto, and had full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and had full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. As of the Original Purchase Date, the Responsible Party
intended to relinquish all rights to possess, control and monitor the Mortgage
Loan. After the Original Purchase Date, the Responsible Party will have no right
to modify or alter the terms of the sale of the Mortgage Loan and the
Responsible Party will have no obligation or right to repurchase the Mortgage
Loan or substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan that is a Second Lien Loan has a
CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Responsible Party, its successors and assigns, as to the first
priority lien (with respect to First Lien Loans) or second priority lien (with
respect to Second Lien Loans) of the Mortgage in the original principal amount
of the Mortgage Loan, subject only to the exceptions contained in clauses (1),
(2), (3) and (4) of paragraph (j) of this Subsection 9.02, and in the case of
Adjustable Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Responsible Party, its successor and
assigns, are the sole insureds of such lender's title insurance policy, and such
lender's title insurance policy is valid and remains in full force and effect
and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Responsible Party, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy, including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Responsible Party;
(q) No Defaults. As of the Original Purchase Date, other than
payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and neither
the Responsible Party nor any of its affiliates nor any of their respective
predecessors, have waived any default, breach, violation or event which would
permit acceleration. As of the Original Purchase Date, with respect to each
Second Lien Loan, (i) the prior mortgage is in full force and effect, (ii) there
is no default, breach, violation or event of acceleration existing under such
prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims (except those which have been expressly insured over in the related title
insurance policy) which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Except as set forth on the Mortgage
Loan Schedule, either (a) the Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act, a savings and loan association, a
savings bank, a commercial bank, credit union, insurance company or other
similar institution which is supervised and examined by a federal or state
authority, or (b) the following requirements have been met with respect to the
Mortgage Loan: the Responsible Party meets the requirements set forth in clause
(a), and (i) such Mortgage Loan was underwritten in accordance with standards
established by the Responsible Party, using application forms and related credit
documents approved by the Responsible Party, (ii) the Responsible Party approved
each application and the related credit documents before a commitment by the
correspondent was issued, and no such commitment was issued until the
Responsible Party agreed to fund such Mortgage Loan, (iii) the closing documents
for such Mortgage Loan were prepared on forms approved by the Responsible Party,
and (iv) such Mortgage Loan was actually funded by the Responsible Party and was
purchased by the Responsible Party at closing or soon thereafter. No Mortgage
Loan contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on
Exhibit I hereto. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments to
the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified on the
description of pool characteristics attached as Exhibit G hereto, the Mortgage
Loan is payable on the first day of each month (subject to a grace period set
forth in the related Mortgage Note). There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (including approved
variances in connection with compensating factors permitted thereunder). The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae
and the Responsible Party has not made any representations to a Mortgagor that
are inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Responsible Party is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(aa) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such Mortgage Loan was originated in
accordance with, and the Mortgaged Property meets the guidelines set forth in
the Responsible Party's Underwriting Guidelines;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Responsible Party are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable jurisdiction;
(cc) Due-On-Sale. With respect to each Mortgage Loan, the Mortgage
contains an enforceable provision (other than with respect to transfers of the
Mortgaged Property with respect to which applicable law required that
due-on-sale provisions may not be enforced) for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Responsible Party's knowledge,
such provision is enforceable;
(dd) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Responsible Party, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the Original Purchase Date and to the best of the Responsible Party's
knowledge as of the Closing Date, there is no proceeding pending or, to the
Responsible Party's knowledge, threatened for the total or partial condemnation
of the Mortgaged Property. As of the Original Purchase Date and to the best of
the Responsible Party's knowledge as of the Closing Date, the Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. As of the Original
Purchase Date and to the best of the Responsible Party's knowledge as of the
Closing Date, there have not been any condemnation proceedings with respect to
the Mortgaged Property and the Responsible Party has no knowledge of any such
proceedings in the future;
(hh) Collection Practices; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Servicer, the
Responsible Party, and any prior servicer with respect to the Mortgage Loan have
been in all respects in compliance with Accepted Servicing Practices, applicable
laws and regulations, and have been in all respects legal and proper and prudent
in the mortgage origination and servicing business. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Responsible Party executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ii) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Responsible Party or by any officer, director, or employee of
the Responsible Party or any designee of the Responsible Party or any
corporation in which the Responsible Party or any officer, director, or employee
had a financial interest at the time of placement of such insurance;
(jj) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Responsible Party, and the Responsible Party has no knowledge of
any relief requested or allowed to the Mortgagor under the Soldiers' and
Sailors' Civil Relief Act of 1940;
(ll) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Responsible Party or
the originator, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx
Mac and Title XI of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated;
(mm) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Responsible Party has complied with, all applicable law with respect to
the making of the Mortgage Loans. The Responsible Party shall maintain such
statement in the Mortgage File;
(nn) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(oo) Value of Mortgaged Property. The Responsible Party has no
knowledge of any circumstances existing that could reasonably be expected to
adversely affect the value or the marketability of any Mortgaged Property or
Mortgage Loan or to cause the Mortgage Loans to prepay during any period
materially faster or slower than similar mortgage loans held by the Responsible
Party generally secured by properties in the same geographic area as the related
Mortgaged Property;
(pp) No Defense to Insurance Coverage. The Responsible Party has
caused to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Responsible Party on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Responsible Party, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and specifications
and other exhibits or documents submitted therewith to the insurer under such
insurance policy, or for any other reason under such coverage, but not including
the failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(rr) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Responsible Party to the Purchaser, that Responsible Party has
full right and authority and is not precluded by law or contract from furnishing
such information to the Purchaser and the Purchaser is not precluded from
furnishing the same to any subsequent or prospective purchaser of such Mortgage.
The Responsible Party shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's secondary
marketing operations and the purchase and sale of mortgages or Servicing Rights
thereto;
(ss) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(tt) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(uu) Predatory Lending Regulations. No more than 0.25% of the
Mortgage Loans are (i) covered by the Home Ownership and Equity Protection Act
of 1994 or (ii) in violation of, or classified as "high cost", "threshold,",
"predatory" or "covered" loans under, any other applicable state, federal or
local law ("Covered Loans"). With respect to any Covered Loan, the related
Mortgagor has been provided with all disclosure materials required by Section
226.32 of the Federal Reserve Board Regulation Z with respect to any Mortgage
Loans subject to such Section of the Federal Reserve Board Regulation Z, if
applicable, and has complied with the requirements of any federal, state or
local law with respect to `high cost', `threshold', `covered' or `predatory'
loans. No predatory or deceptive lending practices were employed in the
origination of the Mortgage Loan;
(vv) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(ww) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(xx) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(yy) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
(zz) Recordation. Each original Mortgage was recorded and (except
for those Mortgage Loans subject to the MERS identification system) all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been, or are in the process of being, recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Responsible Party, or is in the process
of being recorded;
(aaa) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(bbb) Compliance with Anti-Money Laundering Laws. The Responsible
Party has complied with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"); the Responsible Party has
established an anti-money laundering compliance program as required by the
Anti-Money Laundering Laws, has conducted the requisite due diligence in
connection with the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering Laws, including with respect to the legitimacy of the
applicable Mortgagor and the origin of the assets used by the said Mortgagor to
purchase the property in question, and maintains, and will maintain, sufficient
information to identify the applicable Mortgagor for purposes of the Anti-Money
Laundering Laws.
SCHEDULE IV
WMC Mortgage Corp. hereby makes the representations and warranties
set forth in this Schedule IV to the Depositor and the Trustee, as of the
Closing Date:
(a) Due Organization and Authority. The Responsible Party is a
corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state wherein it
owns or leases any material properties or where a Mortgaged Property
is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by
the Responsible Party, and in any event the Responsible Party is in
compliance with the laws of any such state to the extent necessary;
the Responsible Party has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of
this Agreement by the Responsible Party and the consummation of the
transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid,
legal, binding and enforceable obligations of the Responsible Party,
regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken
by the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party in
accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Responsible Party's charter
or by-laws or any legal restriction or any agreement or instrument
to which the Responsible Party is now a party or by which it is
bound, or constitute a default or result in an acceleration under
any of the foregoing, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Responsible Party
or its property is subject, or result in the creation or imposition
of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage,
contract, deed of trust or other instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party,
before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the aggregate,
may result in any material adverse change in the business,
operations, financial condition, properties or assets of the
Responsible Party (taken as a whole), or in any material impairment
of the right or ability of the Responsible Party to carry on its
business substantially as now conducted, or in any material
liability on the part of the Responsible Party, or which would draw
into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Responsible
Party contemplated herein, or which would be likely to impair
materially the ability of the Responsible Party to perform under the
terms of this Agreement; and
(d) No Consent Required. Except for the recording of Assignments and any
securities laws requirements in connection with the issuance of the
Certificates, no consent, approval, authorization or order of, or
registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the
execution, delivery and performance by the Responsible Party of or
compliance by the Responsible Party with this Agreement or the
consummation of the transactions contemplated by this Agreement, or
if required, such approval has been obtained prior to the Closing
Date.
SCHEDULE V
Representations and Warranties of Depositor as to the Mortgage Loans
--------------------------------------------------------------------
The Depositor hereby makes the representations and warranties set forth in
this Schedule V as to the Mortgage Loans only to the Trustee as of the Closing
Date.
(1) Payments Current. No Mortgage Loan has a 30 Day Delinquency; and
(2) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Depositor nor any of its Affiliates
have waived any default, breach, violation or event which would permit
acceleration;
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. :
Cut-off Date : September 1, 2002
First Distribution Date : October 21, 2002
Initial Certificate Balance
of this Certificate
("Denomination") :
Initial Certificate
Balances of all
Certificates of this Class : CLASS PRINCIPAL AMOUNT
CLASS A-1 $[233,053,000]
CLASS A-2A $[87,067,000]
CLASS A-2B $[50,303,000]
CLASS M-1 $[34,298,000]
CLASS M-2 $[25,153,000]
CLASS B-1 $[16,006,000]
CLASS B-2 $[6,859,665]
CUSIP : CLASS CUSIP NO.
CLASS A-1 [36228F GX 8]
CLASS A-2A [36228F GY 6]
CLASS A-2B [36228F HV 1]
CLASS M-1 [36228F GZ 3]
CLASS M-2 [36228F HA 7]
CLASS B-1 [36228F HB 5]
CLASS B-2 [36228F HC 3]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates, Series 2002-WMC1
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Responsible Party, the Servicer or the Trustee referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), WMC Mortgage Corp., as responsible party (the "Responsible Party"),
and Deutsche Bank National Trust Company, as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By:_____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-WMC1 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 20th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Responsible Party, the Servicer and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Depositor, as owner of the Servicing Rights, will
have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:______
_____________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 21, 2002
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP : 36228F HY 5
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates, Series 2002-WMC1
Class P
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Responsible
Party, the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), Ocwen Federal Bank
FSB, as servicer (the "Servicer"), WMC Mortgage Corp., as responsible party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose, or the office or agency
maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By _____________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-WMC1 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Depositor, as owner of the Servicing Rights, will
have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT C
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF
APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON
BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. In the event that such
representation is violated, or any attempt IS MADE to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code OR A PLAN SUBJECT TO SIMILAR LAW, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Certificate No. : 1
Cut-off Date : September 1, 2002
First Distribution Date : October 21, 2002
Percentage Interest of :
this Certificate
("Denomination") 100%
CUSIP : 36228F HY 5
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates, Series 2002-WMC1
Class R
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Responsible Party or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________________] is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R Certificates pursuant to a Pooling and Servicing Agreement dated as
of the Cut-Off Date specified above (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as
servicer (the "Servicer"), WMC Mortgage Corp., as responsible party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other Person
and (D) not to Transfer the Ownership Interest in this Class R Certificate or to
cause the Transfer of the Ownership Interest in this Class R Certificate to any
other Person if it has actual knowledge that such Person is not a Permitted
Transferee and (iv) any attempted or purported Transfer of the Ownership
Interest in this Class R Certificate in violation of the provisions herein shall
be absolutely null and void and shall vest no rights in the purported
Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By: ___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-WMC1 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 20th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Depositor, as owner of the Servicing Rights, will
have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF ERISA AND THE CODE OR SIMILAR VIOLATION OF SIMILAR LAW AND WILL
NOT SUBJECT THE TRUSTEE OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE
EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY. NOTWITHSTANDING
ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE
TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE
WITHOUT THE REPRESENTATION LETTER AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.
Certificate No. :
Cut-off Date : September 1, 2002
First Distribution Date : October 21, 2002
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP : 36228F HW 9
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates, Series 2002-WMC1
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Responsible Party or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), Ocwen Federal Bank
FSB, as servicer (the "Servicer"), WMC Mortgage Corp., as responsible party (the
"Responsible Party"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar provisions of applicable Federal, state or local
law ("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, or (iii) in the case of a Certificate
presented for registration in the name of an employee benefit plan subject to
ERISA, or a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments) or a plan subject to Similar
Law, or a trustee of any such plan or any other person acting on behalf of any
such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Trustee and the Servicer, which Opinion
of Counsel shall not be an expense of the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such Certificate will not result in the assets of the Trust Fund being deemed to
be "plan assets" and subject to the prohibited transaction provisions of ERISA
and the Code and will not subject the Trustee or the Servicer to any obligation
in addition to those expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity, but
solely as
Trustee
By:____________________________________
Countersigned:
By: ___________________________________
Authorized Signatory of
DEUTSCHE BANK NATIONAL TRUST COMPANY,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2002-WMC1
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2002-WMC1 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 20th day of each month or, if such 20th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party and the Trustee with the
consent of the Holders of Certificates affected by such amendment evidencing the
requisite Percentage Interest, as provided in the Agreement. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Principal Balance, the Depositor, as owner of the Servicing Rights, will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and all property acquired in respect of the Mortgage Loans at a purchase
price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_____________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
_____________________
_____________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Ocwen Federal Bank FSB, as Servicer, WMC
Mortgage Corp., as Responsible Party, and Deutsche Bank
National Trust Company, as Trustee, GSAMP Trust, 2002-WMC1
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Originator]
_____________________
_____________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities
Corp., as Depositor, Ocwen Federal Bank FSB, as Servicer, WMC
Mortgage Corp., as Responsible Party, and Deutsche Bank
National Trust Company, as Trustee, GSAMP Trust, 2002-WMC1
-------------------------------------------------------------
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all intervening
endorsements showing a complete chain of endorsement from the originator
to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed assignment of the Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or, if
the Responsible Party has certified or the Trustee otherwise knows that
the related Mortgage has not been returned from the applicable recording
office, a copy of the assignment of the Mortgage (excluding information to
be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment from
the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and all
riders thereto or, any one of an original title binder, an original
preliminary title report or an original title commitment, or a copy
thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7), and (9)
of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2002-WMC1,
Mortgage Pass-Through Certificates
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), by and among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Ocwen Federal Bank FSB, as servicer, WMC Mortgage Corp., as
Responsible Party, and Deutsche Bank National Trust Company, as Trustee.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee
for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that such Transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have come
due, intends to pay its debts as they come due in the future, and understands
that the taxes payable with respect to the Certificate may exceed the cash flow
with respect thereto in some or all periods and intends to pay such taxes as
they become due. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other U.S.
person.
12. Check one of the following:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is
assumed to pay tax at the highest rate currently specified in Section 11(b) of
the Code (but the tax rate in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b) of the Code if the
Transferee has been subject to the alternative minimum tax under Section 55 of
the Code in the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate) and (ii) present
values are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and the
compounding period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA, and the Transferee is not acting on behalf of or investing
plan assets of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____day of ____________, 20__.
_______________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_______________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____day of _________, 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: GSAMP Trust, 2002-WMC1, Mortgage Pass-Through Certificates, Class __
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (A) we have no
knowledge the Transferee is not a Permitted Transferee and (B) after conducting
a reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the statements made in paragraphs 7,
10 and 11 of the Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_______________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Deutsche Bank National Trust Company,
as Trustee,
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000-0000
Re: GSAMP Trust 2002-WMC1, Mortgage Pass-Through Certificates, Class ___
--------------------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A-1 Certificate,
Class A-2A Certificate, Class A-2B Certificate, Class M-1 Certificate, Class M-2
Certificate or we are not an employee benefit plan that is subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or a
plan or arrangement that is subject to Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code"), or a plan subject to any Federal, state or
local law materially similar to the foregoing provisions of ERISA or the Code,
nor are we acting on behalf of any such plan or arrangement nor using the assets
of any such plan or arrangement to effect such acquisition or, with respect to a
Class X Certificate, the purchaser is an insurance company that is purchasing
this certificate with funds contained in an "insurance company general account"
(as such term is defined in Section V(e) of Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other action, that would constitute a distribution of the Certificates under
the Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) to the extent that the
Certificate transferred is a Class X Certificate, we are a bankruptcy-remote
entity and (g) we are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or transfer
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption
from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $_____(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
-----------------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
Date:__________________________________
ANNEX 2 TO EXHIBIT I
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $____________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_______________________________________
Print Name of Transferor
By:____________________________________
Name:
Title:
IF AN ADVISER:
_______________________________________
Print Name of Buyer
Date:__________________________________
EXHIBIT J
REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Reason for Requesting Documents (check one)
-------------------------------------------
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Subsection 2.03 of the Pooling
and Servicing Agreement. (The Company hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain). ________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form.
OCWEN FEDERAL BANK FSB
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The original Mortgage Note bearing all intervening endorsements,
showing a complete chain of endorsement from the originator to the
last endorsee endorsed "Pay to the order of ________________ without
recourse" and signed (which may be by facsimile signature) in the
name of the last endorsee by an authorized officer. To the extent
that there is no room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an allonge, if
state law so allows and the Trustee is so advised by the Responsible
Party that state law so allows.
(b) The original of any guaranty executed in connection with the
Mortgage Note.
(c) The original Mortgage, with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If in
connection with any Mortgage Loan, the Responsible Party cannot
deliver or cause to be delivered the original Mortgage with evidence
of recording thereon on or prior to the Closing Date because of a
delay caused by the public recording office where such Mortgage has
been delivered for recordation or because such Mortgage has been
lost or because such public recording office retains the original
recorded Mortgage, the Responsible Party shall deliver or cause to
be delivered to the Trustee, a photocopy of such Mortgage, together
with (i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Responsible Party or a
certificate from an escrow company, a title company or closing
attorney stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Trustee
upon receipt thereof by the Responsible Party; or (ii) in the case
of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage.
(d) The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording.
(e) The original Assignment of Mortgage for each Mortgage Loan endorsed
in blank.
(f) Originals of all intervening assignments of mortgage (if any)
evidencing a complete chain of assignment from the applicable
originator to the last endorsee with evidence of recording thereon
or a certified true copy of such intervening assignments of mortgage
submitted for recording, or if any such intervening assignment has
not been returned from the applicable recording office or has been
lost or if such public recording office retains the original
recorded assignments of mortgage, the Responsible Party shall
deliver or cause to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of
the Responsible Party or a certificate from an escrow company, a
title company or a closing attorney stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the
Trustee upon receipt thereof by the Responsible Party; or (ii) in
the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation
in a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment.
(g) The original mortgagee title insurance policy or attorney's opinion
of title and abstract of title.
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of
downpayment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural engineer's
report, water potability and septic certification.
(t) Sales Contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
SERVICING PERFORMANCE STANDARDS
TABLE 1
--------- --------------------------------------------------------------- ---------------------- ---------------------
XXXXXXXXXXX
XXXXX 0 XXXXXXXXX XXXXXXXX XXXXXXXX
--------- --------------------------------------------------------------- ---------------------- ---------------------
1. Right Party Contacts (first 15 days of delinquency, measured 30% 22.5%
as a percentage of Contacts)
Servicer will achieve an average daily Right Party Contact
Rate for the month against all accounts in their first 15 days
of delinquency
--------- --------------------------------------------------------------- ---------------------- ---------------------
2. Right Party Contacts (After the 15th day of delinquency but 25% 18.75%
not in foreclosure, measured as a percentage of Contacts)
Servicer will achieve an average daily Right Party Contact
Rate for the month against all accounts past the first 15
days of delinquency but prior to foreclosure
--------- --------------------------------------------------------------- ---------------------- ---------------------
3. Promise to Pay 30% 22.5%
Servicer will achieve an average daily Promise to Pay on a
minimum percentage of all loans 1-89 days delinquent
--------- --------------------------------------------------------------- ---------------------- ---------------------
4. Roll Rate (1 to 29 days of delinquency-- MBA method) 70% 52.5%
Servicer shall achieve a rolling three month average
percentage of loans, based on unpaid principal balance, that
remain in the same bucket or improve their delinquency status
(including loans that payoff or are otherwise liquidated)
from previous month-end to current month-end
--------- --------------------------------------------------------------- ---------------------- ---------------------
5. Roll Rate (30 to 59 days of delinquency-- MBA method) 60% 45%
Servicer shall achieve a rolling three month average
percentage of loans, based on unpaid principal balance, that
remain in the same bucket or improve their delinquency status
(including loans payoff or are otherwise liquidated) from
previous month-end to current month-end 6
--------- --------------------------------------------------------------- ---------------------- ---------------------
6. Roll Rate (60 to 89 days of delinquency-- MBA method) 40% 30%
Servicer shall achieve a rolling three month average
percentage of loans, based on unpaid principal balance, that
remain in the same bucket or improve their delinquency status
(including loans that payoff or are otherwise liquidated)
from previous month-end to current month-end
--------- --------------------------------------------------------------- ---------------------- ---------------------
7. Abandonment Rate 10% 13.3%
Servicer will operate its customer service area to achieve no
more than a maximum abandonment rate on customer calls
--------- --------------------------------------------------------------- ---------------------- ---------------------
8. REO Sales 15% 11.25%
Servicer will sell a minimum percentage of the REO Sellable
Portfolio on a monthly basis and will obtain a Total Sales
Price to Total Reconciled Market Value of at least 95%
measured on a rolling three month average
--------- --------------------------------------------------------------- ---------------------- ---------------------
9. Servicer will obtain a minimum Pre-Foreclosure Resolution 60% 45%
Rate on a rolling three month average 10
--------- --------------------------------------------------------------- ---------------------- ---------------------
10. Servicer will meet a minimum Foreclosure Timeline Percentage 100% 120%*
on a rolling three month average basis
--------- --------------------------------------------------------------- ---------------------- ---------------------
* On pre-Servicer initiated foreclosure actions, termination standard is 130%.
TABLE 2
--------- --------------------------------------------------------------- ----------------------
TERMINATION
STANDARD
--------- --------------------------------------------------------------- ----------------------
1. Skip Tracing 97.5%
No later than the 30th day of delinquency, if no mortgagor
contact has been made, or as early as there is an indication
of inability to contact the mortgagor with the provided
information, if sooner. Servicer will implement all skip
tracing methods (i.e., establishing a phone number contact)
--------- --------------------------------------------------------------- ----------------------
2. Early Late Notices (Written Correspondence) 97.5%
Servicer will mail a late notice to all borrowers once they
are 5 days past their due date, except for the loans that are
screened out for such written correspondence for reasons
including, but not limited to, bankruptcies and Early
Indicator Scoring (EIS)
--------- --------------------------------------------------------------- ----------------------
3. Demand Letter (Written Correspondence) 95%
Servicer will send a demand letter no later than the 35th day
of delinquency
--------- --------------------------------------------------------------- ----------------------
4. Customer Service Turnaround Times (Both must be met to pass
this test)
Servicer shall achieve minimum turnaround times on the
following written requests:
- 99% of customer generated research requests, not 10 days
involving external or 3rd party agents, are resolved
within specified business days (Monday-Friday) from
receipt of the request
- 99% of customer generated research requests, involving 30 days
external or 3rd party agents, are resolved within
specified business days (Monday-Friday) from receipt of
the request
- Consumer Affairs - resolved within specified calendar 30 days
days
--------- --------------------------------------------------------------- ----------------------
5. Average Call Pick-up Time 95%
Servicer will operate its customer service area such that the
average call pick-up time for incoming calls is less than or
equal to 150 seconds
--------- --------------------------------------------------------------- ----------------------
These Servicing Performance Standards may be measured at any time and apply to
all Mortgage Loans and REO Properties in the aggregate. Repeated violations of
the Termination Standards set forth above (each failure to meet the Termination
Standards set forth herein on any date of determination, an "Exceedance") can
trigger termination of the Servicer's rights hereunder in accordance with
Section 7.01. The "Standard" levels set forth in Table 1 above are guidelines
for appropriate servicing levels, violations of which will not trigger
termination.
DEFINITIONS FOR PERFORMANCE STANDARDS
-------------------------------------
Abandonment Rate: Means the percentage of total incoming calls to the customer
service area which are not directed to the automated telephony response system
in which the customer terminates the call prior to connection with a customer
service representative.
Attempt: Means, at a minimum, an actual dialing of an outbound call to the
borrower's telephone number.
Average Call Pick-up Time: Means the average number of seconds that a customer,
other than those that select the automated telephony response system, are on
hold prior to speaking to a customer service representative.
Collection Calls - First 15 days of Delinquency: These calls are made for all
mortgage loans that are past due and have broken a Promise to Pay between the
first and 15th day of delinquency, except for loans that are screened out from
such calls for reasons including, but not limited to: bankruptcies, interim
payments in the first 30 days after transfer, loans for which borrowers have
requested in writing that the Servicer not contact them and early indicator
scoring exclusions. On initial contact for a second lien account, the Servicer
shall obtain senior lien information for the mortgagor. The expectation is that
the Servicer will make an Attempt every other business day.
Collection Calls - After the 15th Day of Delinquency but Not Yet in Foreclosure:
These calls are made for all Mortgage Loans that are delinquent and have broken
a Promise to Pay after the 15th day of delinquency, except for loans that are
screened out from such calls for reasons including, but not limited to:
bankruptcies, loans in foreclosure, loans for which borrowers have requested in
writing that the Servicer not contact them and early indicator scoring
exclusions. As applicable, the expectation is that the Servicer will make one
Attempt each business day.
Contact: Any outbound call to a mortgagor which is actually answered (not
including any answer by an answering service, answering machine or other
automated answer) and transferred to an agent.
Foreclosure Timelines: For Mortgage Loans in foreclosure, Servicer will, subject
to clause (ii) below, meet or improve upon the foreclosure timelines. The
Servicer will use the most recently published Xxxxxxx Mac foreclosure timelines
as may be amended from time to time. The Servicer will not be penalized with a
reduction in fees for unavoidable delays such as bankruptcy, missing documents,
workouts authorized by the residual holder, contested actions, service of
process delays, sheriff sale scheduling delays, court delays in entering
judgment or scheduling hearings, and other circumstances agreed to by the
residual holder, provided, that the Servicer (i) has documented its system
accordingly, and (ii) upon request by the residual holder, provide a report of
such conditions, such report detailing corrective actions taken, the date of
such actions and the expected resolution date, and demonstrating diligent time
management to resolve such issues.
Foreclosure Timeline Percentage: Means, for all Mortgage Loans with a completed
foreclosure sale during the preceding month, the average across all such loans
of the ratio of the number of days to foreclosure from the date of the
foreclosure initiation divided by the applicable FHLMC standard in the relevant
state.
Pre-Foreclosure Resolution: Shall mean any of the following:
- Reinstatement - means any defaulted mortgage loan for which the borrower
brings the Mortgage Loan back to a status no more than 60 days delinquent
through a lump sum payment or otherwise consistent with the terms of the
related servicing agreement.
- Full Payoff - means any defaulted mortgage loan which is paid in full as
defined in the related servicing agreement.
- Cash for keys - means a defaulted mortgage loan for which the mortgagor
surrenders the property in exchange for a cash sum to enable foreclosure on
a property with imperfect title.
- Shortfall Payoff - means a defaulted mortgage loan for which a final
payment in an amount less than the indebtedness owed under the applicable
mortgage note is made consistent with the terms of the related servicing
agreement and such payment is received by the Servicer in full satisfaction
of such indebtedness.
- Deed-in-Lieu of Foreclosure - means a defaulted mortgage loan for which
title to the mortgaged property is taken by the Servicer through deed in
lieu of foreclosure and the resulting REO Property is to be liquidated
consistent with the terms of the related Servicing Agreement.
- Modification/Deferral (subject to REMIC restrictions) - means a defaulted
mortgage loan which is modified in a manner consistent with the related
servicing agreement and for which the borrower has made three consecutive
payments consistent with the terms of such mortgage loan as so modified.
- Forbearance Plan - means a defaulted mortgage loan for which a borrower has
made three consecutive payments in accordance with a forbearance plan
entered into by the borrower.
- Take-out at Foreclosure Sale - means the mortgaged property related to a
defaulted mortgage loan that is purchased at a foreclosure sale by a party
other than the Servicer in a manner consistent with the related servicing
agreement.
- Loan Sale - a sale of the mortgage loan to a third party.
Pre-Foreclosure Resolution Rate: A rate calculated as the percentage of the
loans (by number) that are at least 90 days past due at the beginning of a month
on which a Pre-Foreclosure Resolution is achieved during the month divided by
the sum of such resolved loans and the number of loans that go to REO Property
during the month.
Promise to Pay: An agreement with the obligor to make at least one full payment
within thirty days.
Reconciled Market Value ("RMV"): The targeted sales price of a REO Property. RMV
is established following an analysis by Servicer's in-house appraisers of
competing marketing plans and other market conditions. This analysis will
include a review of the interior Broker Price Opinions ("BPOs") received from
the listing agent and a third party appraisal. This set value never changes
throughout the servicing of the REO Property asset and will be reflected in all
reporting.
REO Sellable Portfolio: The entire REO Property portfolio less any REO Property
in eviction, redemption under contract, ratification or other situations in
which Servicer cannot pass marketable title.
Right Party Contact: Means a person-to-person contact with an obligor (a signer
of the Mortgage Note), or, where applicable, the obligor's legal guardian or
attorney-in-fact with respect to the loan, or other third party as appointed by
the mortgagor.
Right Party Contact Rate: The percentage of outbound calls that are a Right
Party Contact.
Roll Rate: A rate calculated as a three month rolling average percentage of
loans, based on unpaid principal balance, that remain in the same bucket or
improve their delinquency status (including loans that payoff or are otherwise
liquidated) from previous month-end to current month-end.
Total Reconciled Market Value: The sum of all the RMVs on all the REO Property
closings in the month.
Total Sales Price: The sum of the sales price of all REO Property closings in
the month, less any Sellers' closing concessions in which the sales price was
inflated to reflect the concession amount.
EXHIBIT M
SERVICER REPORTING REQUIREMENTS
Data File Layout
With respect to fields for which the Field Availability code is Y, such field
shall be included in the Date File made available on Datamart.
With respect to fields for which the Field Availability code is Yadd, until such
field is available on Datamart, the Servicer shall electronically deliver such
information to the Trustee and the Depositor on the Data Delivery Date a file in
..csv format.
With respect to fields for which the Field Availability code is N, such field
shall be included in the Data File if it becomes available.
SERVICER
FIELD NEEDS TO
# LIST OF FIELDS AVAILABILITY FORMAT PROVIDE KEY? COMMENTS
--- --------------------------------------------- ------------ ---------- ----------------- ----------------------------------
Loan Characteristics File
1 Origination Loan Number Y Text
2 Custodian File Number YADD Text
3 Custodian Loan Number YADD Text
4 Investor Number Y Number
5 Servicer Loan Number Y Text
6 Origination date Y Date
7 Original balance Y Numeric
8 Maturity date Y Date
9 Original Term Y Number
10 Loan type Y Text arm, fixed, hybrid
11 Coupon Y Number
12 Index (for arms) Y Text
13 Margin Y Number
14 Excess Margin N Number Only Needed For GPM
15 Lookback days YADD Number
16 Interest method Y Text
17 First Payment reset date YADD Date
18 First Rate reset date YADD Date
19 Rate Reset periods (months between resets) Y Number
20 Payment Reset periods Y Number
21 First adjustment cap YADD Number
22 Periodic caps Y Number
23 Periodic floor Y Number
24 Lifetime caps Y Number
25 Lifetime floor Y Number
26 Servicing fee Y Number
27 Original Scheduled payment (P&I) N Number
28 Negative amortization Flag YADD Text
29 Negam Percent YADD Number
30 First payment date Y Date
31 Property type Y Text KEY See Enumeration
32 Property address Y Text
33 Property City Y Text
34 Property State Y Text
35 Property zip Y Number
36 Borrower name Y Text
37 Borrower Social Security Number Y -to be Number
provided
separately
one time
38 Original Fico score YADD Number Original Score
39 Original Fico date YADD Number
40 Original Credit Grade N Number
41 Date of Credit Grade N Date
42 Loan purpose YADD Text KEY See Enumeration
43 Amortization type Y Text
44 Amortization Term (months) Y Number
45 Lien Position Y Number
46 Senior lien amount Y Number
47 Occupancy type Y Text KEY See Enumeration
48 Prepayment Flag Y Text
49 Prepay penalty type Y Text KEY
50 Prepay term Y Number
51 Prepay penalty amount N Number
52 Insurance type YADD Text KEY FHA/VA, Radian, Triad, etc.
53 Insurance amount YADD Number Percent Coverage
54 Escrow Flag (Is on Escrow) YADD Text
55 Front-ratio N Number
56 Back-Ratio N Number
57 Due Diligence Random Pool N Text
58 Due Diligence Adverse Pool N Text
59 Ballon Flag Y Text
60 OLTV YADD Number
MONTHLY PAYMENTS TRANSACTIONS FILE
(TRANSACTION BASED--MULTIPLE LINES PER LOAN)
61 Investor Number Y Number
62 Loan Number Y Number
63 Transaction Code Y Test KEY
64 Payment Date Y Date Which remittance period it is in.
65 Amount of Transaction Y Number
MONTHLY PAYMENTS SUMMARY FILE
(ONE LINE PER LOAN)
66 As of date Y Date
67 Loan Number Y Number
68 Investor Number Y Number
69 Current Balance Y Number
70 Accrued Interest Y Number
71 Scheduled Balance Y Number
72 Payment Date Y Date
73 Total Monthly Scheduled P&I Y Number
74 Total Monthly P&I due Y Number
75 Total Monthly Payment (PI & TI) Y Number
76 Total Monthly Payment (P&I) Y Number
77 Total Monthly Payment Principal Y Number
78 Total Monthly Payment Interest Y Number
79 Delinquent Interest Y Number
80 Delinquent Payment Y Number
81 Total Servicing Fee Y Number
82 Interest Amount Net of Servicing Y Number
83 Interest Non Cash Adjustments Y Number
84 Principal Non Cash Adjustments Y Number
85 Total Monthly Payment Penalties / Fees Y Text
86 Total Monthly Escrow Payment Y Number
87 Total Monthly Escrow Advances Y Number
88 Total Monthly Corporate Advances Y Number
89 Net Interest Rate Y Number
90 Principal Advances Y Number
91 Interest Advances Y Number
92 Escrow Balance Y Number
93 Escrow Advance Balance Y Number
94 Corporate Advance Balance Y Number
95 Total Monthly Repayment of Advances Y Number
96 Forbearance Suspense Balance Y Number
97 Hazard Suspense Balance Y Number
98 Misc Suspense Balance Y Number
99 Ending Payment Suspense Balance Y Number
100 Ending Gov't Suspense Balance Y Number
101 Paid Off Flag Y Text
102 Severity Y Number
103 CPR Y Number
104 Ending Total Borrower Debt Y Number
105 Stop Advance Flag Y Text
106 Stop Advance Start Date Y Date
107 Stop Advance Reversal Date Y Date
108 Stop Advance Reversal Amount Y Number
109 Stop Advance Net Interest Not Advanced Y Number
110 Stop Advance Net Interest Recouped Y Number
111 Stop Advance Net Principal Not Advanced Y Number
112 Stop Advance Sum of Principal Readvanced Y Number
113 Compensating Interest Y Number
114 Date of next reset (adjustable loans) YADD Date
115 Next Payment amount at reset YADD Number
116 Next Payment Change Date YADD Date
117 Status of loan Y Text KEY See Enumeration
118 Days delinquent Y Number
119 Delinquency Method Y Text
120 Last payment date Y Date
121 Paid thru date Y Date
122 Next payment due date Y Date
123 Bankruptcy Flag Y Text
124 Bankruptcy Chapter Y Text
125 Bankruptcy start date Y Date
126 Bankruptcy end date Y Date
127 Bankruptcy Post Petition Due Date Y Date
128 Motion for Relief Request Date YADD Date
129 Motion for Relief Filing Date YADD Date
130 Motion for Relief Hearing Date N Date
131 Motion for Relief Granted Date YADD Date
132 BK Plan Confirmation Date YADD Date
133 BK Plan Term YADD Number
134 BK Discharged or Dismissed YADD Text
135 BK Discharge/Dismissed Date YADD Date
136 Proof of Claim Amount YADD Number
137 In Demand Flag YADD Text
138 In Demand Start Date N Date
139 In Demand End Date N Date
140 Foreclosure Flag Y Text
141 Foreclosure start date Y Date
142 Foreclosure end date Y Date
143 Sheriff Sale Date N Date
144 Forebearance Payment Amount Y Number
145 Forebearance Flag Y Text
146 Forebearance Start Date YADD Date
147 Forebearance End Date YADD Date
148 Forebearance Scheduled Payment Y Number
149 Forebearance Scheduled Balance YADD Number
150 Forebearance Scheduled Payment Start Date YADD Date
151 Next Forebearance Duedate Y Date
152 Eviction Flag YADD Text
153 Eviction Start Date YADD Date
154 Eviction End Date YADD Date
155 REO Flag Y Text
156 Date in Reo Y Date
157 Property List Price YADD Number
158 Listing Date YADD Date
159 Under Contract Amount YADD Number
160 Under Contract Date YADD Date
161 Projected Liquidation Proceeds YADD Number
162 Current Fair Mkt Value Low Y Number
163 Current Fair Mkt Value High Y Number
164 NPV calculation for determining Charge-off YADD Number
165 Projected Liquidation Date YADD Date
166 Remaining Term Y Number
167 Remaining Amortization Term Y Number
168 Age Y Number
169 Coupon Paid Y Number
170 Next Coupon Y Number
171 Next Index Y Number
172 New Appraisal or BPO house price Y Number
173 New Appraisal or BPO Date Y Date
174 New Appraisal or BPO Type (Appraisal, BPO N Text KEY
walkthrough, BPO Driveby)
175 Current Fico Y Number
176 Fico Date Y Date
177 Current Credit Grade N Number
178 Credit Grade Date N Date
PROPERTY CHARACTERISTIC FILE
179 Loan Number Y Number
180 Investor Number Y Number
181 Original Appraisal Amount YADD Number
182 Original Market Value Low Y Number
183 Original Market Value High Y Number
184 Original Appraisal Date Y Date
185 Original Appraisal Type N Text KEY
186 Square ft of construction YADD Number
187 Square ft of land YADD Number
188 Number of Bedrooms YADD Number
189 Number of Bathrooms YADD Number
TERMINATED LOANS FILE
(LIQUIDATED AND PAID OFF LOANS)
190 Loan Number Y Number
191 Investor Number Y Number
192 Date of termination (liquidation or payoff) Y Date
193 Type of Termination Y Text KEY See Enumeration
194 Balance at Termination Y Number
195 Property Sales Price Y Number
196 Property Sale Date Y Date
197 Gross Total Proceeds Y Number This number will equal all of the
components listed below
198 Principal Y Number
199 Interest Y Number
200 Penalties / Fees Y Number
201 Servicing Fee Y Number
202 Recovered Corporate Advances Y Number
203 Recovered Escrow Advances Y Number
204 Expenses Y Number
205 Charge-off amount Y Number
206 Potential Deficiency Judgement Flag N Text
207 Potential Deficiency Amount N Number
208 Deficiency Proceeds (this period) N Number
209 Deficiency Proceeds Date N Date
210 Deficiency Proceeds Total (to date) N Number
211 Deficiency Vendor Expense N Number
212 Deficiency Servicer Expense N Number
213 Insurance Claim Date N Date
214 Insurance Claim Due Date N Number
215 Insurance Claim Amount N
216 Insurance Claim Paid Flag N Text
217 Insurance Claim Paid Amount N Number
218 Expenses After Resolution YADD Number
219 Income After Resolution YADD Number
220 Suspense Balance At Resolution Y Number
221 Escrow Advance Balance at Resolution Y Number
222 Corporate Advance Balance at Resolution Y Number
223 Other Advances At Resolution Y Number
SUMMARY FILE
224 Number of Remaining Loans Y Number
225 Current Balance of Remaining Loans Y Number
226 Schedule Balance of Remaining Loans Y Number
227 Balance of Terminated Loans Y Number
228 Total Payments Y Number
229 Total Principal Y Number
230 Total Interest Y Number
231 Total Escrow Advances Y Number
232 Total Corporate Advances Y Number
233 Total Servicing Charges Y Number
234 Total Other Expenses Y Number
235 Terminated Loans Principal Y Number
236 Terminated Loans Interest Y Number
237 Terminated Loans Charge-offs of balance Y Number
238 Regular Scheduled Principal Y Number
239 Regular Scheduled Interest Y Number
-------------------------------------- ----------------------------------------
AMORTIZATION TYPE
-------------------------------------- ----------------------------------------
ARM ARM
BN10 Balloon, 10 Year
BN5 Balloon, 5 Year
BN7 Balloon, 7 Year
FIX Fixed
FX10 Fixed - 10 Year
FX15 Fixed, 15 Year
FX5 Fixed - 5 Year
FXST Fixed - Short Term
H101 Hybrid, 10/1
H21 Hybrid, 2 Year
H228 Hybrid 2/28
H31 Hybrid, 3/1
H327 Hybrid 3/27
H51 Hybrid, 5/1
H71 Hybrid, 7/1
OTH Other
STEP Step Coupon
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
ARM CODE
-------------------------------------- ----------------------------------------
A Arm
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
ARM INDEX
-------------------------------------- ----------------------------------------
10YC 10 Year CMT
1ML 1 Month Libor
1YC 1 Year CMT
1YL 1 Year Libor
2ML 2 Month Libor
2YC 2 Year CMT
3ML 3 Month Libor
3MT 3 Month TBill
3YC 3 Year CMT
5YC 5 Year CMT
6MCD 6 Month CD
6ML 6 Month Libor
6MT 6 Month TBill
COFI COFI
FHLM FHLMC Commitment Rate
FNMA FNMA Commitment Rate
OTH Other Rate
PRI PRIME
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
ARM ROUNDING FORMULA
-------------------------------------- ----------------------------------------
DEC3 Nearest 1000th
H8 Higher Eighth
N8 Nearest Eighth
NONE None
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
BANKRUPTCY CODE
-------------------------------------- ----------------------------------------
B In Bankruptcy
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
BPO TYPE
-------------------------------------- ----------------------------------------
DB Drive By
WT Walk Through
OTH Other
APPR Appraisal
DD Due Diligence
PRFC Pre Foreclosure
SUPP Supplemental
RR Re-review
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
CURRENCY CODE
-------------------------------------- ----------------------------------------
EUR EURO
USD US Dollar
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
INTEREST CALENDAR
-------------------------------------- ----------------------------------------
3360 30/360
A360 Actual/360
A365 Actual/365
AA Actual/Actual
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
LOSS TYPE
-------------------------------------- ----------------------------------------
BK Bankruptcy
INS Insurance Loss
OTH Other
REPO Repossession
RIP Repo In Progress
SB Small Balance
SKIP Skip
ST Settlement
TPFS Third Party Fcl Sale
VTC Value To Cost
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
NOTE TYPE
-------------------------------------- ----------------------------------------
COMI Conventional, with mi
CONV Conventional, no mi
FHA FHA Mortgage
HEL Home Equity Loan
MTG Mortgage
VA VA Mortgage
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
OCCUPANCY CODE
-------------------------------------- ----------------------------------------
2ND 2nd Home
NOO Non Owner Occupied
OO Owner Occupied
VA Vacant
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
PROPERTY TYPE
-------------------------------------- ----------------------------------------
AUTO Automobile
BOAT Boat
COND Condominium
COOP Cooperative
HVAC HVAC
MF Multi Family
MH Manufactured Housing
MX Mixed Use
OF Office
OTH Other
PUDA PUD - Attached
PUDD PUD - Detached
PWR PowerSports
RT Retail
RV Recreational Vehicle
SF Single Family
TH TownHouse
CORE Refi - Cash Out
HE Home Equity
HI Home Improvement
PUR Purchase
REFI Refi - No Cash Out
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
STATUS
-------------------------------------- ----------------------------------------
BU Bankrupt - Unknown Status
C Current
D Delinquent
DISP Dispute
F Foreclosure
FB Forebearance
ID In Demand
LIT Litigation
NLS No Longer Serviced
PO Paid Off
PR Prepaid
REO Real Estate Owned
RSLD Resolved
U Unknown
-------------------------------------- ----------------------------------------
-------------------------------------- ----------------------------------------
TERMINATION STATUS
-------------------------------------- ----------------------------------------
CO Charge Off
COC Charge Off with cash possible
NLPO Negotiated Loan Payoff
NS Negotiated Sale
PO Paid Off
PPO Partially Paid Off
PPOC PPO with More Cash Possible
REOS REO Sale
TPPO Third Party Paid Off
-------------------------------------- ----------------------------------------
REPORTS FROM OCWEN
EXCEL FORMATTED REPORTS DELIVERY DATE
-------------
1. Trial Balance - (Including PO Loans Balance) 3rd Business Day
2. Remittance Report - UPB, Loan Count, Escrow, Escrow Advance, Other Advances, 3rd Business Day
Forbearance Suspense, Other Suspense, Interest In Arrears.
3. Cash Waterfall Report ( Remittance/Billing Detail) 3rd Business Day
4. Velocity Report - (Performance History if Incentives) 3rd Business Day
5. Bank Reconciliation's - Collections (P&I) and Escrow 3rd Business Day
6. Prepayment Penalties (with copy of note) 3rd Business Day
7. Service Fees Collected 3rd Business Day
8. Sub-service Fee Calculation 3rd Business Day
9. Stop Advance Report 3rd Business Day
10. Tracking Reports for all Servicing Standards agreed to by Ocwen 3rd Business Day
* Calls 3rd Business Day
* Foreclosure Timelines by Loan 3rd Business Day
* Detail of F/C Resolution Rate at Loan Level 3rd Business Day
* PSA Standards 3rd Business Day
11. Repurchase Loans - non-solicitation confirmation 3rd Business Day
12. Other Reports as reasonably requested 3rd Business Day
MS ACCESS
1. Cash Collection Detail Transaction 3rd Business Day
2. Servicer Advances Detail Transaction 3rd Business Day
3. Principal & Interest Advances Detail Transaction 3rd Business Day
4. Non-Cash Detail Transaction 3rd Business Day
5. Other Advances Detail Transaction 3rd Business Day
6. Property Valuation Detail Report (table) 3rd Business Day
7. Asset Status Detail Report (table) 3rd Business Day
8. Cash Flow Projections (as requested on default loans) 3rd Business Day
9. Trial Balance 3rd Business Day
PRINTED
1. Remittance Summary 5th business Day
2. Trial Balance Summary 5th business Day
3. Cash Collections Summary 5th business Day
4. Non-Cash Summary 5th business Day
5. Servicer Advances Cash Summary 5th business Day
6. Principal & Interest Advances Cash Summary 5th business Day
7. Other Advance Cash Summary 5th business Day
8. Payoff Detail 5th business Day
9. REO Transfer Detail 5th business Day
10. Delinquency Summary Report 5th business Day
11. Bank Statements 5th business Day
EXHIBIT N
FORM CERTIFICATION TO BE
PROVIDED WITH FORM 10-K
-----------------------
GSAMP Trust 2002-WMC1 (the "Trust")
Mortgage Pass-Through Certificates
Series 2002-WMC1
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on Form
8-K containing distribution date reports filed in respect of periods
included in the year covered by this annual report, of the Trust;
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be provided
to the trustee by the servicer under the pooling and servicing agreement
is included in these reports;
4. I am responsible for reviewing the activities performed by the servicer
under the pooling and servicing agreement and based upon the review
required under the pooling and servicing agreement, and except as
disclosed in the report, the servicer has fulfilled its obligations under
the pooling and servicing agreement; and
5. I have disclosed to the Trust's certified public accountants all
significant deficiencies relating to the servicer's compliance with the
minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage
Bankers or similar standard as set forth in the pooling and servicing
agreement.
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT O
FORM OF CERTIFICATION TO BE
PROVIDED TO DEPOSITOR
GSAMP Trust 2002-WMC1 (the "Trust")
Mortgage Pass-Through Certificates
Series 2002-WMC1
I, [identify the certifying individual], certify to GS Mortgage Securities
Corp. [and Deutsche Bank National Trust Company, as trustee] [add for
certifications signed by an officer of the Servicer], and [its][their] [add for
certifications signed by an officer of the Servicer] officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. [To be certified by the Trustee] [I have reviewed the annual report
on Form 10-K for the fiscal year [___], and all reports on Form 8-K
containing distribution date reports filed in respect of periods
included in the year covered by that annual report, of the Trust;]
2. [To be certified by the Trustee] [Based on my knowledge, the
information in these reports, taken as a whole, does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading as of the last
day of the period covered by that annual report;]
3. [To be certified by the Trustee] [Based on my knowledge, the
servicing information required to be provided to the trustee by the
servicer under the pooling and servicing agreement is included in
these reports;]
4. [To be certified by the Servicer] [I am responsible for reviewing
the activities performed by the servicer under the pooling and
servicing agreement and based upon the review required under the
pooling and servicing agreement, and except as disclosed in the
report, the servicer has fulfilled its obligations under the pooling
and servicing agreement; and]
5. [To be certified by the Servicer] [I have disclosed to the Trust's
certified public accountants all significant deficiencies relating
to the servicer's compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar standard
as set forth in the pooling and servicing agreement.]
Date: _________________________
_______________________________
[Signature]
[Title]
EXHIBIT P
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-------------------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
WMC MORTGAGE CORP.,
Seller
-------------------
Dated as of July 15, 2002
Conventional,
Fixed and Adjustable Rate Non-Prime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions.....................................................
SECTION 2. Agreement to Purchase...........................................
SECTION 3. Mortgage Schedules..............................................
SECTION 4. Purchase Price..................................................
SECTION 5. Examination of Mortgage Files...................................
SECTION 6. Conveyance from Seller to Purchaser.............................
Subsection 6.01 Conveyance of Mortgage Loans..............................
Subsection 6.02 Books and Records.........................................
Subsection 6.03 Delivery of Mortgage Loan Documents.......................
Subsection 6.04 Quality Control Procedures................................
SECTION 7. Servicing of the Mortgage Loans.................................
SECTION 8. Transfer of Servicing...........................................
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.............................................
Subsection 9.01 Representations and Warranties Regarding the
Seller.......................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans....................................
Subsection 9.03 Remedies for Breach of Representations and
Warranties...................................................
Subsection 9.04 Repurchase of Mortgage Loans With Early Payment
Defaults.....................................................
Subsection 9.05 Repurchase of Certain Mortgage Loans That Prepay
in Full......................................................
Subsection 9.06 Purchaser's Right to Review...............................
SECTION 10. Closing.........................................................
SECTION 11. Closing Documents...............................................
SECTION 12. Costs...........................................................
SECTION 13. Cooperation of Seller with a Reconstitution.....................
SECTION 14. The Seller......................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.................................................
Subsection 14.02 Merger or Consolidation of the Seller.....................
SECTION 15. Financial Statements............................................
SECTION 16. Mandatory Delivery; Grant of Security Interest..................
SECTION 17. Notices.........................................................
SECTION 18. Severability Clause.............................................
SECTION 19. Counterparts....................................................
SECTION 20. Governing Law...................................................
SECTION 21. Intention of the Parties........................................
SECTION 22. Successors and Assigns; Assignment of Purchase Agreement........
SECTION 23. Waivers.........................................................
SECTION 24. Exhibits........................................................
SECTION 25. General Interpretive Principles.................................
SECTION 26. Reproduction of Documents.......................................
SECTION 27. Further Agreements..............................................
SECTION 28. Recordation of Assignments of Mortgage..........................
SECTION 29. No Solicitation.................................................
SECTION 30. Confidentiality.................................................
SECTION 31. Waiver of Trial by Jury.........................................
SECTION 32. Submission To Jurisdiction; Waivers.............................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT H SELLER'S UNDERWRITING GUIDELINES
EXHIBIT I MORTGAGE LOAN SCHEDULE
EXHIBIT J MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT K PREMIUM ADJUSTMENT PERCENTAGE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------------------------------
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of July 15, 2002, by and between Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and WMC Mortgage Corp., a California
corporation, having an office at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx
00000 (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate non-prime residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first and second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the
manner of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: 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 and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made at the time of origination of such refinanced
Mortgage Loan, and (ii) with respect to any Second Lien Loan, the value,
determined pursuant to the Underwriting Guidelines, of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: July 29, 2002, or such other date as is mutually
agreed upon by the parties.
CLTV: As of the date of origination and as to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of the date of origination and (ii)
the outstanding principal balance as of the date of origination of any mortgage
loan or mortgage loans that are senior or equal in priority to the Second Lien
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Current CLTV: As of any date and as to any Second Lien Loan, the
ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of such date and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: Deutsche Bank National Trust Company, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: July 15, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the HUD,
or any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances
relating to FHA insured mortgage loans, including the related handbooks,
circular, notices and mortgagee letters.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R)System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Material Adverse Change: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of Seller or Servicer; (b) a material
impairment of the ability of Seller of Servicer, as applicable, to perform under
each Purchase Agreement, each Interim Servicing Agreement, each Custodial
Agreement or any related agreements (the "Operative Agreements"); or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Operative Agreement against Seller or Servicer, as
applicable (unless such material adverse effect is directly caused by an action
of the Purchaser which can be remedied by the Purchaser).
Market Change Event: (a) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on NASDAQ; (b)
a general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; or (c) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in clause (c) in the judgment of the Purchaser or
Seller, as applicable, makes it impracticable or inadvisable to proceed with the
transactions as contemplated in this letter agreement on the terms and in the
manner contemplated in this letter agreement.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note; except that with
respect to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, the mortgage,
deed of trust or other instrument securing the Mortgage Note may secure and
create a first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit I, setting forth the information set forth on Exhibit J with
respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President or by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Operative Agreements: Each of the Purchase Agreement, the Interim
Servicing Agreement (if entered into), the Custodial Agreement or any related
agreements.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Premium Adjustment Percentage: As set forth on Exhibit K.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain Purchase Price and
Terms Letter, dated as of July 12, 2002, by and between the Seller and the
Purchaser.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the originator, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfy the requirements
of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid to the
Purchaser by the Seller in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Lifetime Rate
Cap, Index and lien priority); and (v) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or
their respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 22nd calendar day (or if such 22nd calendar day
is not a Business Day, the first Business Day immediately preceding).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement or the Servicing
Agreement is found, a price equal to the then outstanding principal balance of
the Mortgage Loan to be repurchased, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding advances
owed to any servicer, plus all reasonable and customary out-of-pocket costs and
expenses incurred by the Purchaser or any servicer arising out of or based upon
such breach, including without limitation reasonable and customary costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: WMC Mortgage Corp., its successors in interest and assigns.
Servicer: Fairbanks Capital Corp., and its successors in interest.
Servicing Fee: With respect to each Mortgage Loan serviced by the
Seller prior to the Transfer Date, a fee payable monthly equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance of such Mortgage Loan. Such fee shall be payable monthly and shall be
pro-rated for any portion of a month during which the Mortgage Loan is serviced
by the Seller hereunder. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds (each as defined in the
Servicing Agreement), to the extent permitted by the Servicing Agreement) of
such Monthly Payment collected by the Seller or Servicer.
Servicing Fee Rate: 0.50% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller or Servicer consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: 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 or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any 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) Escrow
Payments 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.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 9.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 14.01.
Thirty-day Delinquency: The failure of the Mortgagor to make any
Monthly Payment due under the Mortgage Note on or prior to the date which is 30
days after such payment's Due Date.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit H.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit I.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date, as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans from the date through
which interest on the Mortgage Loan has been paid through (the "Paid-through
Date") the day prior to the Closing Date, inclusive. The Purchase Price plus
accrued interest as set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an account designated
by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
after the Paid-through Date. The outstanding principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date, to the extent actually collected,
together with any unscheduled principal prepayments collected prior to the
Cut-off Date; provided, however, that payments of scheduled principal and
interest paid prior to the Cut-off Date, but to be applied on a due date beyond
the Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall cause any such prepaid amounts to be remitted to the Servicer for
subsequent remittance to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage (except with respect to each MERS
Designated Mortgage), pertaining to each Mortgage Loan.
At least ten (10) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule, and may be replaced by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files or the Credit Files shall not affect
the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Mae or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the
form of microfilm or microfiche so long as the Seller complies with the
requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Purchaser shall pay and initial
setup fee charged by the Custodian. The Seller shall comply with the terms of
the Custodial Agreement and the Purchaser shall pay all fees and expenses of the
Custodian from and after the Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller in accordance with
industry standards.
SECTION 7. Servicing of the Mortgage Loans.
(a) The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. The Purchaser shall retain the Seller as the
contract servicer of the Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions set forth in this section; provided
that if the Transfer Date has not occurred on or prior to the date which is 60
days after the Closing Date, the Purchaser and the Seller hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. On the Closing Date, the Seller
shall begin, or shall cause the Servicer to begin servicing the Mortgage Loans
on behalf of the Purchaser in accordance with the Accepted Servicing Practices
and the following provisions of this section.
(b) As consideration for servicing the Mortgage Loans during the
period from the Closing Date up to but not including the Transfer Date, the
Seller shall retain the Servicing Fee, which shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Seller pursuant to
this Agreement.
(c) In servicing the Mortgage Loans, the Seller shall comply with
(i) all applicable laws, rules and regulations with respect thereto and (ii)
Accepted Servicing Practices, unless otherwise set forth herein. The Seller
shall take no action with respect to any Mortgage Loan, including entering into
any litigation, or any agreement with the related borrower, without the prior
written consent of the Purchaser. The Seller shall promptly notify the Purchaser
in writing of any action which should be taken with respect to any Mortgage Loan
in accordance with Accepted Servicing Practices. The Seller shall take no
action, and shall not refrain from taking action, which, in either case, (A)
would impair the ability of the Purchaser to realize on or enforce the Mortgage
Note or the lien of the Mortgage or any other document related thereto or (B)
would jeopardize the rights or remedies available to the Purchaser with respect
to any Mortgage Loan or otherwise impair the ability of the Purchaser to realize
on the Mortgaged Property with respect to such Mortgage Loan.
(d) The Seller shall be obligated to make all advances on the
Mortgage Loans with respect to taxes and insurance premiums due and owing (the
"T&I Servicing Advances"). Any other servicing advances shall be made with the
prior written consent of the Purchaser. The Seller shall be required to notify
the Purchaser in writing of all advances required to be made in order to further
protect and preserve the Purchaser's interest in the Mortgage Loans and the
underlying Mortgaged Property (the "Other Servicing Advances," together with the
T&I Servicing Advances, the "Servicing Advances"), and shall make such Other
Servicing Advances in a timely fashion unless otherwise instructed by the
Purchaser. The Seller shall be entitled to reimbursement for all Servicing
Advances from the Purchaser within 15 business days following the Transfer Date.
(e) The Seller shall retain for the benefit of the Purchaser in a
segregated account in a depository institution insured by the FDIC, and shall
remit (or, if the account is held be the Servicer, shall cause the Servicer to
remit) to the Purchaser on the earlier to occur of the Remittance Date of each
month and the Transfer Date (a) all amounts received from any source with
respect to the Mortgage Loans minus (b) the Servicing Fee owed the Seller with
respect to the Mortgage Loans. On or prior to the Remittance Date the Seller
shall deliver to the Purchaser a remittance advice which shall be in the form of
FNMA 2010 (except that such report shall reflect the fact that servicing is on
an "actual" basis) and shall additionally specify the number of days which each
Mortgage Loan is delinquent, and shall contain an explanation of all Servicing
Advances made, the status of all Mortgage Loans in foreclosure or otherwise the
subject of litigation, and the status of all other collection efforts with
respect to each Mortgage Loan.
(f) The Seller agrees to indemnify and hold the Purchaser harmless
from any liability, claim, loss or damage (including, without limitation, any
reasonable legal fees, judgments or expenses relating to such liability, claim,
loss or damage reasonable legal fees incurred in connection with the enforcement
of the Seller's indemnification obligation under this Subsection) to the
Purchaser directly or indirectly resulting from the Seller's or the Servicer's
failure: (i) to observe and perform any or all of Seller's duties, obligations,
covenants, agreements, warranties or representations contained in this Section
7; or (ii) to comply with all applicable requirements with respect to the
servicing of the Mortgage Loans as set forth herein.
(g) The Seller may perform any of its servicing responsibilities
hereunder or may cause the Servicer to perform any such servicing
responsibilities on its behalf, but the use by the Seller of the Servicer shall
not release the Seller from any of its obligations hereunder and the Seller
shall remain responsible hereunder for all acts and omissions of the Servicer as
fully as if such acts and omissions were those of the Seller. The Seller shall
pay all fees and expenses of the Subservicer from its own funds.
(h) Notwithstanding any of the provisions of this Agreement relating
to agreements or arrangements between the Seller and the Servicer or any
reference herein to actions taken through the Servicer or otherwise, the Seller
shall not be relieved of its obligations to the Purchaser and shall be obligated
to the same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans. The Seller shall be entitled to
enter into an agreement with the Servicer for indemnification of the Seller by
the Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
SECTION 8. Transfer of Servicing.
On the Transfer Date, the Purchaser, or its designee, shall assume
all servicing responsibilities related to, and the Seller and the Servicer shall
cease all servicing responsibilities related to the Mortgage Loans.
On or prior to the Transfer Date, the Seller shall, or shall cause
the Servicer to, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall, or shall cause the
Servicer to, mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall, or shall cause the Servicer to, transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall, or shall cause the
Servicer to, provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall, or shall cause
the Servicer to, forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Seller's or Servicer's possession relating
to each related Mortgage Loan including the information enumerated in the
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall, or shall cause the Servicer
to, provide the Purchaser, or its designee, with immediately available funds by
wire transfer in the amount of the net Escrow Payments and suspense balances and
all loss draft balances associated with the related Mortgage Loans. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with an accounting
statement of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall, or shall
cause the Servicer to, wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Seller or the Servicer.
(e) Payoffs and Assumptions. The Seller shall, or shall cause the
Servicer to, provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Seller or the Servicer on the related
Mortgage Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller or the Servicer on each
related Mortgage Loan shall be properly applied by the Seller or the Servicer to
the account of the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller or the Servicer after the
Transfer Date shall be forwarded to the Purchaser by overnight mail on the date
of receipt. The Seller shall, or shall cause the Servicer to, notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller or the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller shall, or shall cause the Servicer to, assume full
responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller or the Servicer after the Transfer Date
with respect to related Mortgage Loans then in foreclosure or bankruptcy;
provided, for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the it
after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the Transfer Date and discovered after the
Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall, or shall cause the Servicer to, reimburse the Purchaser for
the amount of such shortage within thirty (30) days after receipt of
written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller and the Servicer with respect to the related Mortgage
Loans shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, or shall cause the Servicer
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller or the Servicer and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall, or shall cause the Servicer to,
file all IRS Forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall, or shall cause the Servicer to,
provide copies of such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the Purchaser due to the
Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller (subject to bankruptcy and other laws affecting
creditor's rights), regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller (taken as a
whole), or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
(f) No Consent Required. Except for the recording of the Assignments
of Mortgage, no consent, approval, authorization or order of, or registration or
filing with, or notice to any court or governmental agency or body including
HUD, the FHA or the VA is required for the execution, delivery and performance
by the Seller of or compliance by the Seller with this Agreement or the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the Custodian or the
sale of the Mortgage Loans or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior to the
Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit G hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the context in which they were made;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no material change in the business, operations,
financial condition, properties or assets of the Seller since the date of the
Seller's financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement;
(l) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(m) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(n) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(o) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(p) Owner of Record. At the time of the sale of the Mortgage Loans,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note.
(q) Reports. On or prior to the Closing Date, Seller has provided
the Custodian and the Purchaser with a MERS Report listing the Custodian as the
Investor with respect to each MERS Designated Mortgage Loan;
(r) MERS Designations. With respect to each MERS Designated Mortgage
Loan, the Seller has designated the Custodian as the Investor and no Person is
listed as Interim Funder on the MERS(R) System.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments for which the related due date was not thirty or more days prior
to the Closing Date, have been made and credited. No Mortgage Loan has a
Thirty-day Delinquency nor has the Mortgage Loan had a Thirty-day Delinquency at
any time since the origination of the Mortgage Loan. The first Monthly Payment
shall be made with respect to the Mortgage Loan on its Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any valid right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any valid right of rescission, set-off, counterclaim or defense, including
without limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or Federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and (ii)
the greater of (a) the outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac in an amount representing coverage not less than the
lesser of (i) the aggregate unpaid principal balance of the Mortgage Loan, (ii)
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, as amended (regardless of whether the area in which such
Mortgaged Property is located is participating in such program), and (iii) the
full replacement value of the improvements which are part of such Mortgaged
Property. All individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any servicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid and
subsisting first lien, with respect to First Lien Loans, or second lien, with
respect to Second Lien Loans, of record on a single parcel of real estate
constituting the Mortgaged Property, including all buildings and improvements on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time,
with respect to the foregoing. In no event shall any Mortgage Loan be in a lien
position more junior than a second lien. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal;
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property; and
(4) with respect to Second Lien Loans, the lien of the
first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to Purchaser. Except as set forth on the Mortgage Loan Schedule,
the Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(subject to bankruptcy and other laws affecting creditor's rights). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission (other than
omissions in accordance with the Seller's Underwriting Guidelines with respect
to Mortgage Loans originated under a Limited Documentation Program),
misrepresentation or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any Person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the underwriting, origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the time of the sale of the Mortgage Loans, the
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note. The Mortgage Loan is not assigned
or pledged, and the Seller has good, indefeasible and marketable title thereto,
and has full right to transfer and sell the Mortgage Loan to the Purchaser free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority subject to
no interest or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement and following the sale of
each Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Seller will
have no right to modify or alter the terms of the sale of the Mortgage Loan and
the Seller will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan that is a Second Lien Loan has a
CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
(with respect to First Lien Loans) or second priority lien (with respect to
Second Lien Loans) of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), (3)
and (4) of paragraph (j) of this Subsection 9.02, and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Seller, its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) as of the Closing Date, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims (except those which have been expressly insured over in the related title
insurance policy) which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Except as set forth on the Mortgage
Loan Schedule, either (a) the Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act, a savings and loan association, a
savings bank, a commercial bank, credit union, insurance company or other
similar institution which is supervised and examined by a federal or state
authority, or (b) the following requirements have been met with respect to the
Mortgage Loan: the Seller meets the requirements set forth in clause (a), and
(i) such Mortgage Loan was underwritten in accordance with standards established
by the Seller, using application forms and related credit documents approved by
the Seller, (ii) the Seller approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until the Seller agreed to fund such Mortgage Loan, (iii)
the closing documents for such Mortgage Loan were prepared on forms approved by
the Seller, and (iv) such Mortgage Loan was actually funded by the Seller and
was purchased by the Seller at closing or soon thereafter. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on
Exhibit I hereto. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments to
the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified on the
description of pool characteristics attached as Exhibit G hereto, the Mortgage
Loan is payable on the first day of each month (subject to a grace period set
forth in the related Mortgage Note). There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (including approved
variances in connection with compensating factors permitted thereunder). The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae
and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(aa) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such Mortgage Loan was originated in
accordance with, and the Mortgaged Property meets the guidelines set forth in
the Seller's Underwriting Guidelines;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(cc) Due-On-Sale. With respect to each Mortgage Loan, the Mortgage
contains an enforceable provision (other than with respect to transfers of the
Mortgaged Property with respect to which applicable law required that
due-on-sale provisions may not be enforced) for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(dd) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to the Seller's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property and the
Seller has no knowledge of any such proceedings in the future;
(hh) Collection Practices; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Servicer, the
Seller, and any prior servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ii) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(jj) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(ll) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
originator, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(mm) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(nn) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(oo) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(pp) No Defense to Insurance Coverage. The Seller has caused to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(rr) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(ss) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(tt) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(uu) Predatory Lending Regulations. No more than 0.25% of the
Mortgage Loans are (i) covered by the Home Ownership and Equity Protection Act
of 1994 or (ii) in violation of, or classified as "high cost", "threshold,",
"predatory" or "covered" loans under, any other applicable state, federal or
local law ("Covered Loans"). With respect to any Covered Loan, the related
Mortgagor has been provided with all disclosure materials required by Section
226.32 of the Federal Reserve Board Regulation Z with respect to any Mortgage
Loans subject to such Section of the Federal Reserve Board Regulation Z, if
applicable, and has complied with the requirements of any federal, state or
local law with respect to `high cost', `threshold', `covered' or `predatory'
loans. No predatory or deceptive lending practices were employed in the
origination of the Mortgage Loan;
(vv) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(ww) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(xx) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(yy) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
(zz) Recordation. Each original Mortgage was recorded and (except
for those Mortgage Loans subject to the MERS identification system) all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been, or are in the process of being, recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(aaa) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(bbb) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (tt), (uu), (vv) or (xx) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price, together with all reasonable and customary out-of-pocket
expenses incurred by the Purchaser as a result of such repurchase. In the event
that a breach shall involve any representation or warranty set forth in
Subsection 9.01, and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Seller of such breach, all of the
Mortgage Loans shall, at the Purchaser's option, be repurchased by the Seller at
the Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Subsection 9.02 (other than the representations and
warranties set forth in clauses (tt), (uu), (vv) or (xx) of such Subsection) and
the Seller discovers or receives notice of any such breach within 120 days of
the Closing Date, the Seller shall, at the Purchaser's option and provided that
the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 120
days after the Closing Date. If the Seller has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a
Mortgage Loan or Loans pursuant to the foregoing provisions of this Subsection
9.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall be retained by the Seller. For the month of
substitution, distributions to the Purchaser shall include the Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and Successor
Servicer respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph, "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean the Person
then acting as the Successor Servicer under this Agreement and any and all
Persons who previously were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement recognizing the servicer designated by the
Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With Early Payment
Defaults.
If the related Mortgagor fails to make the first Monthly Payment due
to the Purchaser after the Closing Date on or before the date which is
forty-five days after the related Due Date, the Seller, at the Purchaser's
option exercised in its sole discretion, shall repurchase such Mortgage Loan
from the Purchaser at a price equal to the percentage of par as stated in the
Purchase Price and Terms Agreement (subject to adjustment as provided therein)
multiplied by the then outstanding principal balance of such Mortgage Loan, plus
accrued and unpaid interest thereon from the date to which interest was last
paid through the day prior to the repurchase date at the applicable Mortgage
Interest Rate, plus any outstanding advances owed to any servicer in connection
with such Mortgage Loan.
Subsection 9.05 Repurchase of Certain Mortgage Loans That
Prepay in Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan is prepaid in full on or before the date which
is twelve months after the Closing Date, the Seller shall pay the Purchaser,
within three (3) Business Days of such prepayment in full, the product of (a)
the difference between the Purchase Price for such Mortgage Loan and the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date and
(ii) the Premium Adjustment Percentage.
Subsection 9.06 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
review each Mortgage File and Credit File, to conduct property inspections,
obtain appraisal recertifications, drive-by appraisals, brokers price opinions
and otherwise to underwrite the Mortgage Loans and to reject any Mortgage Loan
which in the Purchaser's sole opinion is an unacceptable investment. In
addition, the Purchaser shall have the right to reject any Mortgage Loan which
in the Purchaser's sole determination (i) fails to conform to the Underwriting
Guidelines, (ii) the value of the Mortgaged Property pursuant to any brokers
price opinion is 15% or more below the original appraised value of the Mortgaged
Property; (iii) any Mortgage Loan Document in the related Mortgage File is
missing or defective in whole or in part; or (iv) the Mortgage Loan does not
conform to the terms of this letter agreement or is in breach of the
representations and warranties set forth in Section 9.02.
Notwithstanding the foregoing, the fact that the Purchaser or its
designee has conducted or failed to conduct the review/due diligence procedures
specified above or any other partial or complete examination of the Mortgage
Files or Credit Files shall not impair in any way the Purchaser's or any of its
successors' rights to demand repurchase, substitution or any other remedy
provided under this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with in all material respects; and
(vi) No Material Adverse Change or Market Change Event shall have
occurred since the date of the Purchase Price and Terms
Agreement.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit C hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit D hereto ("Opinion of
Counsel of the Seller") or such other form as is mutually
acceptable to the Purchaser and the Seller;
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
H;
12. Exhibit G to this Agreement; and
13. a MERS Report reflecting the Custodian as Investor and no
Person as Interim Funder for each MERS Designated Mortgage
Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees, any commissions (if
any) due its salesmen, the fees and expenses of its counsel, any initial setup
fee of the Custodian and any costs and expenses of the Custodian for the ongoing
maintenance of the Mortgage Loan files over the lives of the Mortgage Loans, and
all recording fees for transfers, if any, for the assignments of mortgage for
all Mortgage Loans not recorded in the name of MERS, for the assignments of
mortgage to the Purchaser or the Purchaser's assignee (regardless of when
recorded), all fees, if any, for transferring record ownership on the MERS
system of Mortgage Loans recorded in the name of MERS. All servicing fees
incurred prior to the related Closing Date, and all costs and expenses incurred
in connection with the transfer of the Mortgage Loans, fees to transfer files
and prepare assignments/endorsements, including the costs associated with
clearing exceptions, (including costs to record intervening assignments and any
existing assumption and modification agreements), any costs or expenses charged
by the Seller's custodian with respect to the Mortgage Loans and the fees and
expenses of Seller's counsel, shall be payable by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part
of one or more Securitization Transfers;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(gg), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller as are reasonably believed necessary by the Purchaser or any such other
participant; and (iii) to execute, deliver and satisfy all conditions set forth
in any indemnity agreement required by the Purchaser or any such participant.
The Seller shall not be required to incur any out-of-pocket costs, expenses or
liability, except as contemplated in this section, in connection with the
Seller's obligations pursuant to this section. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller regarding the Seller, the Seller's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. The Seller shall indemnify or cause the Servicer to indemnify
the Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Servicer regarding the Servicer, the servicer's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. For purposes of the previous sentence, "Purchaser" shall mean
the Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall (except with
respect to each MERS Designated Mortgage Loan) execute each assignment of
mortgage, track such Assignments of Mortgage to ensure they have been recorded
and deliver them as required by the prospective purchaser or trustee, as
applicable, upon the Seller's receipt thereof. Additionally, the Seller shall
prepare and execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and Successor Servicer and
hold it harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees (including (without limitation) legal fees incurred in
connection with the enforcement of the Seller's indemnification obligation under
this Subsection 14.01) and related costs, judgments, and any other costs, fees
and expenses that the Purchaser or the Successor Servicer may sustain in any way
related to the failure of the Seller to perform its duties under this Agreement
and the Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representation, warranties and
covenants set forth in this Agreement (provided that such cost shall not include
any lost profits). The Seller immediately shall notify the Purchaser if a claim
is made by a third party with respect to this Agreement or any Reconstitution
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Seller or Servicer to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
The Purchaser agrees that it shall not disclose the financial
statements of the Seller except to the extent (a) the disclosure is reasonably
believed the Purchaser to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) they are disclosed to
any one or more of the Purchaser's employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
person's duties for such party, to the extent such party has procedures in
effect to inform such person of the confidential nature thereof; (c) they are
that is disclosed in a prospectus, prospectus supplement or private placement
memorandum relating to a securitization of the Mortgage Loans by the Purchaser
(or an affiliate assignee thereof) or to any Ratings Agency or other person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement; and
(d) that disclosure is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. As of the closing of the sale of the Mortgage
Loans, the Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the Purchase Price and Terms Agreement, and the Seller
agrees that it shall hold such Mortgage Loans in custody for the Purchaser
subject to the Purchaser's (i) right to reject any Mortgage Loan (or Qualified
Substitute Mortgage Loan) under the terms of this Agreement and to require
another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be substituted
therefor, and (ii) obligation to pay the Purchase Price for the Mortgage Loans.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, sent by
facsimile, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address as follows:
(i) if to the Seller:
WMC Mortgage Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
cc: Xxxxxx X. Xxxxxxxxx, General Counsel
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
Fax: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. After the Closing Date, this Agreement shall not be assigned, pledged
or hypothecated by the Seller to a third party without the prior written consent
of the Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. There shall be no limitation on the
number of assignments or transfers allowable by the Purchaser with respect to
the Mortgage Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and the
Purchaser shall be relieved from any liability to the Seller with respect
thereto. The Successor Servicer shall be an intended third party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Purchaser's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Confidentiality.
The Seller understands and agrees that the Operative Agreements, any
other agreements executed in connection with the sale contemplated hereunder,
any agreements executed in connection with the securitization of the Mortgage
Loans, and any offering circulars or other disclosure documents produced in
connection with such securitization are confidential and proprietary to the
Purchaser, and the Seller agrees to hold such documents confidential and not to
divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under this letter agreement
or the Operative Agreements, (b) to the extent such information enters into the
public domain other than through the wrongful act of the Seller, or (c) as is
necessary in working with legal counsel, auditors, rating agencies, agents,
taxing authorities or other governmental agencies.
SECTION 31. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST 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 OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 32. Submission To Jurisdiction; Waivers.
Each of the Seller and the Purchaser hereby irrevocably and
unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
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 date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
WMC MORTGAGE CORP.
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, if required;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan in blank, in form and
substance acceptable for recording. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "WMC Mortgage
Corp., successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the Assignment of Mortgage must be by "WMC Mortgage Corp., formerly known as
[previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee (or MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original power of attorney with evidence of recording thereon, if applicable, on
or prior to the Closing Date because of a delay caused by the public recording
office, the Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such power of attorney, together with an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such power of attorney has been dispatched to the
appropriate public recording office for recordation and that the original
recorded power of attorney or a copy of such power of attorney certified by such
public recording office to be a true and complete copy of the original recorded
power of attorney will be promptly delivered to the Custodian upon receipt
thereof by the Seller; and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 180 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the anticipated date the applicable recorded
document will be delivered to the Custodian. An extension of the date specified
in (iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment except for Mortgage Loans originated under a Limited Documentation
Program.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of WMC Mortgage Corp., a state chartered institution organized
under the laws of the state of California (the "Company") and further as
follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage Loan
Purchase and Warranties Agreement, dated as of July 15, 2002, by and
between Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"), and the Custodial Agreement dated as of July
15, 2002 by and among the Company, the Purchaser and Deutsche Bank
National Trust Company (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
8. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of WMC
Mortgage Corp., hereby certify that ____________ is the duly elected, qualified
and acting [Vice] President of the Company and that the signature appearing
above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to WMC Mortgage Corp. (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated as of July
15, 2002 (the "Purchase Agreement") which sale is in the form of whole loans,
delivered pursuant to a Servicing Agreement, dated as of July 15, 2002, by and
between Purchaser and the Company (the "Servicing Agreement") and the Custodial
Agreement dated as of July 15, 2002 among the Purchaser, the Company, and
Deutsche Bank National Trust Company (the "Custodial Agreement" and,
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of Assignment of Mortgage;
5. the form of endorsement of the Mortgage Notes; and
6. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a corporation, duly organized, validly existing
and in good standing under the laws of California and is
qualified to transact business in, and is in good standing
under, the laws of California.
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Agreements and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
_________________________________
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that WMC Mortgage Corp. a corporation,
organized pursuant to the laws of California] (the "Company") has committed to
sell to Xxxxxxx Xxxxx Mortgage Company ("Purchaser") under a Mortgage Loan
Purchase and Warranties Agreement, dated as of July 15, 2002, certain mortgage
loans originated by the Association. The Company warrants that the mortgage
loans to be sold to Purchaser are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Purchaser shall not be used as additional or substitute collateral for advances
made by the Association. Purchaser understands that the balance of the Company's
mortgage loan portfolio may be used as collateral or additional collateral for
advances made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to
___________________________________.
Very truly yours,
WMC MORTGAGE CORP.
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Acknowledged and approved:
__________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by Xxxxxxx Sachs Mortgage Company ("Purchaser") from the Company named below
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement, dated
as of July 15, 2002, and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees, as of the
date and time of the sale of such Mortgage Loans to Purchaser.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to Xxxxxxx Xxxxx Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loan, the security interests in the Mortgage Loans released by the
above-named financial institution comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Company warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
WMC MORTGAGE CORP.
By:___________________________
Title:________________________
Date:_________________________
EXHIBIT G
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
-------------------------------------------------------
CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than ___%
are secured by real property improved by individual condominium units, (c) no
more than ___% are secured by real property improved by an individual unit in a
planned unit development, and (d) at least ___% are secured by real property
with a detached one family residence erected thereon. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (a) no more than ____%
are "cash-out" refinance mortgage loans, (b) no more than ____% are rate and
term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, the weighted average
FICO Score shall be at least _______. No Mortgage Loan shall have a FICO Score
less than ___. With respect to the aggregate unpaid principal balance of the
Mortgage Loans, (i) no more than __% of the Mortgage Loans were originated under
the Seller's `stated documentation' program, (ii) no more than __% of the
Mortgage Loans were originated under a documentation program which is lacking
ratio verification, (iii) no more than __% of the Mortgage Loans have no
documentation and (iv) at least _________% of the Mortgage Loan were originated
under the Seller's `full documentation' program. The maximum Mortgage Interest
Rate on the Mortgage Loans as of the Cut-off Date was ____%. The minimum
Mortgage Interest Rate on the Mortgage Loans as of the Cut-off Date was ____%.
The Mortgage Loans have a weighted average remaining term of ___ months. The
maximum original principal balance of the Mortgage Loans is $_______________.
The minimum original principal balance of the Mortgage Loans is $______________.
The average original principal balance of the Mortgage Loans is $ ______________
_____. With respect to the aggregate unpaid principal balance of the Mortgage
Loans: (a) __% of the Mortgaged Properties will be located in [_______]; (b) __%
of the Mortgaged Properties will be located in [______] and (c) not more than
__% of the Mortgaged Properties will be located in any other single state. The
Mortgage Loan, as of the date of its origination, has an LTV equal to or less
than ___%. The weighted average LTV of all the Mortgage Loans as of their
respective dates of origination was not greater than ____%
EXHIBIT H
SELLER'S UNDERWRITING GUIDELINES
--------------------------------
EXHIBIT I
MORTGAGE LOAN SCHEDULE
----------------------
EXHIBIT J
---------
MORTGAGE LOAN SCHEDULE FIELDS
-----------------------------
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but based
on the actual amortization schedule;
(7) with respect to First Lien Loans, the LTV and with respect to
Second Lien Loans, the CLTV, each at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien, Second Lien);
(22) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e. full,
alternative or reduced);
(24) the loan credit classification (as described in the
Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(27) a description of the Prepayment Penalty, if applicable;
(28) the Mortgage Interest Rate as of origination;
(29) the credit risk score (FICO score) at origination;
(30) the date of origination;
(31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(35) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan;
(36) a code indicating whether the Mortgage Loan is assumable;
(37) a code indicating whether the Mortgage Loan has been modified;
(38) the Current CLTV;
(39) the one year payment history, if applicable;
(40) the Due Date for the first Monthly Payment;
(41) the original Monthly Payment due;
(42) with respect to the related Mortgagor, the debt-to-income
ratio;
(43) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien;
(44) the Appraised Value of the Mortgaged Property;
(45) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(46) the MERS Identification Number].
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
EXHIBIT K
---------
PREMIUM ADJUSTMENT PERCENTAGE
-----------------------------
-------------------------------------------------------------------------------
For the period from the Closing Date to, but excluding the 12/12
date which is one month after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is one month after the 11/12
Closing Date to, but excluding the date which is two month
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is two months after the 5/6
Closing Date to, but excluding the date which is three months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is three months after the 3/4
Closing Date to, but excluding the date which is four months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is four months after the 2/3
Closing Date to, but excluding the date which is five months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is five months after the 7/12
Closing Date to, but excluding the date which is six months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is six months after the 1/2
Closing Date to, but excluding the date which is seven months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is seven months after the 5/12
Closing Date to, but excluding the date which is eight months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is eight months after the 1/3
Closing Date to, but excluding the date which is nine months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is nine months after the 1/4
Closing Date to, but excluding the date which is ten months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is ten months after the 1/6
Closing Date to, but excluding the date which is eleven months
after the Closing Date:
-------------------------------------------------------------------------------
For the period from the date which is eleven months after the 1/12
Closing Date to, but excluding the date which is twelve months
after the Closing Date:
-------------------------------------------------------------------------------
EXHIBIT Q
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-------------------------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
WMC MORTGAGE CORP.,
Seller
-------------------------
Dated as of August 15, 2002
Conventional,
Fixed and Adjustable Rate Non-Prime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions..................................................
SECTION 2. Agreement to Purchase........................................
SECTION 3. Mortgage Schedules...........................................
SECTION 4. Purchase Price...............................................
SECTION 5. Examination of Mortgage Files................................
SECTION 6. Conveyance from Seller to Purchaser..........................
Subsection 6.01 Conveyance of Mortgage Loans...........................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. Servicing of the Mortgage Loans..............................
SECTION 8. Transfer of Servicing........................................
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach..........................................
Subsection 9.01 Representations and Warranties Regarding the Seller....
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.........................................
Subsection 9.03 Remedies for Breach of Representations and
Warranties.............................................
Subsection 9.04 Repurchase of Mortgage Loans With Early
Payment Defaults.......................................
Subsection 9.05 Repurchase of Certain Mortgage Loans That
Prepay in Full.........................................
Subsection 9.06 Purchaser's Right to Review............................
SECTION 10. Closing......................................................
SECTION 11. Closing Documents............................................
SECTION 12. Costs........................................................
SECTION 13. Cooperation of Seller with a Reconstitution..................
SECTION 14. The Seller...................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims...........................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. Financial Statements.........................................
SECTION 16. Mandatory Delivery; Grant of Security Interest...............
SECTION 17. Notices......................................................
SECTION 18. Severability Clause..........................................
SECTION 19. Counterparts.................................................
SECTION 20. Governing Law................................................
SECTION 21. Intention of the Parties.....................................
SECTION 22. Successors and Assigns; Assignment of Purchase Agreement.....
SECTION 23. Waivers......................................................
SECTION 24. Exhibits.....................................................
SECTION 25. General Interpretive Principles..............................
SECTION 26. Reproduction of Documents....................................
SECTION 27. Further Agreements...........................................
SECTION 28. Recordation of Assignments of Mortgage.......................
SECTION 29. No Solicitation..............................................
SECTION 30. Confidentiality..............................................
SECTION 31. Waiver of Trial by Jury......................................
SECTION 32. Submission To Jurisdiction; Waivers..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT H SELLER'S UNDERWRITING GUIDELINES
EXHIBIT I MORTGAGE LOAN SCHEDULE
EXHIBIT J MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT K PREMIUM ADJUSTMENT PERCENTAGE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-----------------------------------------------
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of August 15, 2002, by and between Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and WMC Mortgage Corp., a California
corporation, having an office at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx
00000 (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate non-prime residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first and second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: 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 and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made at the time of origination of such refinanced
Mortgage Loan, and (ii) with respect to any Second Lien Loan, the value,
determined pursuant to the Underwriting Guidelines, of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: August 27, 2002, or such other date as is mutually
agreed upon by the parties.
CLTV: As of the date of origination and as to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of the date of origination and (ii)
the outstanding principal balance as of the date of origination of any mortgage
loan or mortgage loans that are senior or equal in priority to the Second Lien
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Current CLTV: As of any date and as to any Second Lien Loan, the
ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of such date and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: Deutsche Bank National Trust Company, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: August 15, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the HUD,
or any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances
relating to FHA insured mortgage loans, including the related handbooks,
circular, notices and mortgagee letters.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R)System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Material Adverse Change: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of Seller or Servicer; (b) a material
impairment of the ability of Seller of Servicer, as applicable, to perform under
each Purchase Agreement, each Interim Servicing Agreement, each Custodial
Agreement or any related agreements (the "Operative Agreements"); or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Operative Agreement against Seller or Servicer, as
applicable (unless such material adverse effect is directly caused by an action
of the Purchaser which can be remedied by the Purchaser).
Market Change Event: (a) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on NASDAQ; (b)
a general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; or (c) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in clause (c) in the judgment of the Purchaser or
Seller, as applicable, makes it impracticable or inadvisable to proceed with the
transactions as contemplated in this letter agreement on the terms and in the
manner contemplated in this letter agreement.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note; except that with
respect to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, the mortgage,
deed of trust or other instrument securing the Mortgage Note may secure and
create a first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit I, setting forth the information set forth on Exhibit J with
respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President or by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Operative Agreements: Each of the Purchase Agreement, the Interim
Servicing Agreement (if entered into), the Custodial Agreement or any related
agreements.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Premium Adjustment Percentage: As set forth on Exhibit K.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain Purchase Price and
Terms Letter, dated as of July 12, 2002, by and between the Seller and the
Purchaser.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the originator, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of the Mortgage Loan, and such
appraiser and the appraisal made by such appraiser both satisfy the requirements
of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid to the
Purchaser by the Seller in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Lifetime Rate
Cap, Index and lien priority); and (v) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 22nd calendar day (or if such 22nd calendar day
is not a Business Day, the first Business Day immediately preceding).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement or the Servicing
Agreement is found, a price equal to the then outstanding principal balance of
the Mortgage Loan to be repurchased, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding advances
owed to any servicer, plus all reasonable and customary out-of-pocket costs and
expenses incurred by the Purchaser or any servicer arising out of or based upon
such breach, including without limitation reasonable and customary costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: WMC Mortgage Corp., its successors in interest and assigns.
Servicer: Fairbanks Capital Corp., and its successors in interest.
Servicing Fee: With respect to each Mortgage Loan serviced by the
Seller prior to the Transfer Date, a fee payable monthly equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance of such Mortgage Loan. Such fee shall be payable monthly and shall be
pro-rated for any portion of a month during which the Mortgage Loan is serviced
by the Seller hereunder. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds (each as defined in the
Servicing Agreement), to the extent permitted by the Servicing Agreement) of
such Monthly Payment collected by the Seller or Servicer.
Servicing Fee Rate: 0.50% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller or Servicer consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: 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 or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any 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) Escrow
Payments 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.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 9.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 14.01.
Thirty-day Delinquency: The failure of the Mortgagor to make any
Monthly Payment due under the Mortgage Note on or prior to the date which is 30
days after such payment's Due Date.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit H.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit I.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date, as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans from the date through
which interest on the Mortgage Loan has been paid through (the "Paid-through
Date") the day prior to the Closing Date, inclusive. The Purchase Price plus
accrued interest as set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an account designated
by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
after the Paid-through Date. The outstanding principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date, to the extent actually collected,
together with any unscheduled principal prepayments collected prior to the
Cut-off Date; provided, however, that payments of scheduled principal and
interest paid prior to the Cut-off Date, but to be applied on a due date beyond
the Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall cause any such prepaid amounts to be remitted to the Servicer for
subsequent remittance to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage (except with respect to each MERS
Designated Mortgage), pertaining to each Mortgage Loan.
At least ten (10) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule, and may be replaced by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files or the Credit Files shall not affect
the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Mae or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the
form of microfilm or microfiche so long as the Seller complies with the
requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Purchaser shall pay and initial
setup fee charged by the Custodian. The Seller shall comply with the terms of
the Custodial Agreement and the Purchaser shall pay all fees and expenses of the
Custodian from and after the Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date..
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller in accordance with
industry standards.
SECTION 7. Servicing of the Mortgage Loans.
(a) The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. The Purchaser shall retain the Seller as the
contract servicer of the Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions set forth in this section; provided
that if the Transfer Date has not occurred on or prior to the date which is 60
days after the Closing Date, the Purchaser and the Seller hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. On the Closing Date, the Seller
shall begin, or shall cause the Servicer to begin servicing the Mortgage Loans
on behalf of the Purchaser in accordance with the Accepted Servicing Practices
and the following provisions of this section.
(b) As consideration for servicing the Mortgage Loans during the
period from the Closing Date up to but not including the Transfer Date, the
Seller shall retain the Servicing Fee, which shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Seller pursuant to
this Agreement.
(c) In servicing the Mortgage Loans, the Seller shall comply with
(i) all applicable laws, rules and regulations with respect thereto and (ii)
Accepted Servicing Practices, unless otherwise set forth herein. The Seller
shall take no action with respect to any Mortgage Loan, including entering into
any litigation, or any agreement with the related borrower, without the prior
written consent of the Purchaser. The Seller shall promptly notify the Purchaser
in writing of any action which should be taken with respect to any Mortgage Loan
in accordance with Accepted Servicing Practices. The Seller shall take no
action, and shall not refrain from taking action, which, in either case, (A)
would impair the ability of the Purchaser to realize on or enforce the Mortgage
Note or the lien of the Mortgage or any other document related thereto or (B)
would jeopardize the rights or remedies available to the Purchaser with respect
to any Mortgage Loan or otherwise impair the ability of the Purchaser to realize
on the Mortgaged Property with respect to such Mortgage Loan.
(d) The Seller shall be obligated to make all advances on the
Mortgage Loans with respect to taxes and insurance premiums due and owing (the
"T&I Servicing Advances"). Any other servicing advances shall be made with the
prior written consent of the Purchaser. The Seller shall be required to notify
the Purchaser in writing of all advances required to be made in order to further
protect and preserve the Purchaser's interest in the Mortgage Loans and the
underlying Mortgaged Property (the "Other Servicing Advances," together with the
T&I Servicing Advances, the "Servicing Advances"), and shall make such Other
Servicing Advances in a timely fashion unless otherwise instructed by the
Purchaser. The Seller shall be entitled to reimbursement for all Servicing
Advances from the Purchaser within 15 business days following the Transfer Date.
(e) The Seller shall retain for the benefit of the Purchaser in a
segregated account in a depository institution insured by the FDIC, and shall
remit (or, if the account is held be the Servicer, shall cause the Servicer to
remit) to the Purchaser on the earlier to occur of the Remittance Date of each
month and the Transfer Date (a) all amounts received from any source with
respect to the Mortgage Loans minus (b) the Servicing Fee owed the Seller with
respect to the Mortgage Loans. On or prior to the Remittance Date the Seller
shall deliver to the Purchaser a remittance advice which shall be in the form of
FNMA 2010 (except that such report shall reflect the fact that servicing is on
an "actual" basis) and shall additionally specify the number of days which each
Mortgage Loan is delinquent, and shall contain an explanation of all Servicing
Advances made, the status of all Mortgage Loans in foreclosure or otherwise the
subject of litigation, and the status of all other collection efforts with
respect to each Mortgage Loan.
(f) The Seller agrees to indemnify and hold the Purchaser harmless
from any liability, claim, loss or damage (including, without limitation, any
reasonable legal fees, judgments or expenses relating to such liability, claim,
loss or damage reasonable legal fees incurred in connection with the enforcement
of the Seller's indemnification obligation under this Subsection) to the
Purchaser directly or indirectly resulting from the Seller's or the Servicer's
failure: (i) to observe and perform any or all of Seller's duties, obligations,
covenants, agreements, warranties or representations contained in this Section
7; or (ii) to comply with all applicable requirements with respect to the
servicing of the Mortgage Loans as set forth herein.
(g) The Seller may perform any of its servicing responsibilities
hereunder or may cause the Servicer to perform any such servicing
responsibilities on its behalf, but the use by the Seller of the Servicer shall
not release the Seller from any of its obligations hereunder and the Seller
shall remain responsible hereunder for all acts and omissions of the Servicer as
fully as if such acts and omissions were those of the Seller. The Seller shall
pay all fees and expenses of the Subservicer from its own funds.
(h) Notwithstanding any of the provisions of this Agreement relating
to agreements or arrangements between the Seller and the Servicer or any
reference herein to actions taken through the Servicer or otherwise, the Seller
shall not be relieved of its obligations to the Purchaser and shall be obligated
to the same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans. The Seller shall be entitled to
enter into an agreement with the Servicer for indemnification of the Seller by
the Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
SECTION 8. Transfer of Servicing.
On the Transfer Date, the Purchaser, or its designee, shall assume
all servicing responsibilities related to, and the Seller and the Servicer shall
cease all servicing responsibilities related to the Mortgage Loans.
On or prior to the Transfer Date, the Seller shall, or shall cause
the Servicer to, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall, or shall cause the
Servicer to, mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall, or shall cause the Servicer to, transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall, or shall cause the
Servicer to, provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall, or shall cause
the Servicer to, forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Seller's or Servicer's possession relating
to each related Mortgage Loan including the information enumerated in the
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall, or shall cause the Servicer
to, provide the Purchaser, or its designee, with immediately available funds by
wire transfer in the amount of the net Escrow Payments and suspense balances and
all loss draft balances associated with the related Mortgage Loans. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with an accounting
statement of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall, or shall
cause the Servicer to, wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Seller or the Servicer.
(e) Payoffs and Assumptions. The Seller shall, or shall cause the
Servicer to, provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Seller or the Servicer on the related
Mortgage Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller or the Servicer on each
related Mortgage Loan shall be properly applied by the Seller or the Servicer to
the account of the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller or the Servicer after the
Transfer Date shall be forwarded to the Purchaser by overnight mail on the date
of receipt. The Seller shall, or shall cause the Servicer to, notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller or the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller shall, or shall cause the Servicer to, assume full
responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller or the Servicer after the Transfer Date
with respect to related Mortgage Loans then in foreclosure or bankruptcy;
provided, for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the it
after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the Transfer Date and discovered after the
Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall, or shall cause the Servicer to, reimburse the Purchaser for
the amount of such shortage within thirty (30) days after receipt of
written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller and the Servicer with respect to the related Mortgage
Loans shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, or shall cause the Servicer
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller or the Servicer and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall, or shall cause the Servicer to,
file all IRS Forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall, or shall cause the Servicer to,
provide copies of such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the Purchaser due to the
Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller (subject to bankruptcy and other laws affecting
creditor's rights), regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller (taken as a
whole), or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
(f) No Consent Required. Except for the recording of the Assignments
of Mortgage, no consent, approval, authorization or order of, or registration or
filing with, or notice to any court or governmental agency or body including
HUD, the FHA or the VA is required for the execution, delivery and performance
by the Seller of or compliance by the Seller with this Agreement or the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the Custodian or the
sale of the Mortgage Loans or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior to the
Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit G hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the context in which they were made;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no material change in the business, operations,
financial condition, properties or assets of the Seller since the date of the
Seller's financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement;
(l) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(m) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(n) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(o) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(p) Owner of Record. At the time of the sale of the Mortgage Loans,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note.
(q) Reports. On or prior to the Closing Date, Seller has provided
the Custodian and the Purchaser with a MERS Report listing the Custodian as the
Investor with respect to each MERS Designated Mortgage Loan;
(r) MERS Designations. With respect to each MERS Designated Mortgage
Loan, the Seller has designated the Custodian as the Investor and no Person is
listed as Interim Funder on the MERS(R) System.
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments for which the related due date was not thirty or more days prior
to the Closing Date, have been made and credited. No Mortgage Loan has a
Thirty-day Delinquency nor has the Mortgage Loan had a Thirty-day Delinquency at
any time since the origination of the Mortgage Loan. The first Monthly Payment
shall be made with respect to the Mortgage Loan on its Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any valid right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any valid right of rescission, set-off, counterclaim or defense, including
without limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or Federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in an amount which is at least equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and (ii)
the greater of (a) the outstanding principal balance of the Mortgage Loan and
(b) an amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac in an amount representing coverage not less than the
lesser of (i) the aggregate unpaid principal balance of the Mortgage Loan, (ii)
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, as amended (regardless of whether the area in which such
Mortgaged Property is located is participating in such program), and (iii) the
full replacement value of the improvements which are part of such Mortgaged
Property. All individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any servicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid and
subsisting first lien, with respect to First Lien Loans, or second lien, with
respect to Second Lien Loans, of record on a single parcel of real estate
constituting the Mortgaged Property, including all buildings and improvements on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time,
with respect to the foregoing. In no event shall any Mortgage Loan be in a lien
position more junior than a second lien. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal;
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property; and
(4) with respect to Second Lien Loans, the lien of the
first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to Purchaser. Except as set forth on the Mortgage Loan Schedule,
the Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(subject to bankruptcy and other laws affecting creditor's rights). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission (other than
omissions in accordance with the Seller's Underwriting Guidelines with respect
to Mortgage Loans originated under a Limited Documentation Program),
misrepresentation or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any Person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the underwriting, origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the time of the sale of the Mortgage Loans, the
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note. The Mortgage Loan is not assigned
or pledged, and the Seller has good, indefeasible and marketable title thereto,
and has full right to transfer and sell the Mortgage Loan to the Purchaser free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority subject to
no interest or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement and following the sale of
each Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Seller will
have no right to modify or alter the terms of the sale of the Mortgage Loan and
the Seller will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan that is a Second Lien Loan has a
CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
(with respect to First Lien Loans) or second priority lien (with respect to
Second Lien Loans) of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), (3)
and (4) of paragraph (j) of this Subsection 9.02, and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Seller, its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) as of the Closing Date, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims (except those which have been expressly insured over in the related title
insurance policy) which have been filed for work, labor or material (and no
rights are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Except as set forth on the Mortgage
Loan Schedule, either (a) the Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act, a savings and loan association, a
savings bank, a commercial bank, credit union, insurance company or other
similar institution which is supervised and examined by a federal or state
authority, or (b) the following requirements have been met with respect to the
Mortgage Loan: the Seller meets the requirements set forth in clause (a), and
(i) such Mortgage Loan was underwritten in accordance with standards established
by the Seller, using application forms and related credit documents approved by
the Seller, (ii) the Seller approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until the Seller agreed to fund such Mortgage Loan, (iii)
the closing documents for such Mortgage Loan were prepared on forms approved by
the Seller, and (iv) such Mortgage Loan was actually funded by the Seller and
was purchased by the Seller at closing or soon thereafter. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on
Exhibit I hereto. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments to
the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified on the
description of pool characteristics attached as Exhibit G hereto, the Mortgage
Loan is payable on the first day of each month (subject to a grace period set
forth in the related Mortgage Note). There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (including approved
variances in connection with compensating factors permitted thereunder). The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae
and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(aa) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such Mortgage Loan was originated in
accordance with, and the Mortgaged Property meets the guidelines set forth in
the Seller's Underwriting Guidelines;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(cc) Due-On-Sale. With respect to each Mortgage Loan, the Mortgage
contains an enforceable provision (other than with respect to transfers of the
Mortgaged Property with respect to which applicable law required that
due-on-sale provisions may not be enforced) for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(dd) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to the Seller's knowledge, threatened for the
total or partial condemnation of the Mortgaged Property. The Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not been
any condemnation proceedings with respect to the Mortgaged Property and the
Seller has no knowledge of any such proceedings in the future;
(hh) Collection Practices; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Servicer, the
Seller, and any prior servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ii) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(jj) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(ll) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
originator, who had no interest, direct or indirect in the Mortgaged Property or
in any loan made on the security thereof, and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(mm) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(nn) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(oo) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(pp) No Defense to Insurance Coverage. The Seller has caused to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(including, without limitation, any exclusions, denials or defenses which would
limit or reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured) whether arising out of actions,
representations, errors, omissions, negligence, or fraud of the Seller, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(rr) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such Mortgage. The Seller
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(ss) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(tt) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(uu) Predatory Lending Regulations. No more than 0.25% of the
Mortgage Loans are (i) covered by the Home Ownership and Equity Protection Act
of 1994 or (ii) in violation of, or classified as "high cost", "threshold,",
"predatory" or "covered" loans under, any other applicable state, federal or
local law ("Covered Loans"). With respect to any Covered Loan, the related
Mortgagor has been provided with all disclosure materials required by Section
226.32 of the Federal Reserve Board Regulation Z with respect to any Mortgage
Loans subject to such Section of the Federal Reserve Board Regulation Z, if
applicable, and has complied with the requirements of any federal, state or
local law with respect to `high cost', `threshold', `covered' or `predatory'
loans. No predatory or deceptive lending practices were employed in the
origination of the Mortgage Loan;
(vv) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(ww) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(xx) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(yy) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Xxx guidelines for
such trusts;
(zz) Recordation. Each original Mortgage was recorded and (except
for those Mortgage Loans subject to the MERS identification system) all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been, or are in the process of being, recorded in the
appropriate jurisdictions wherein such recordation is necessary to perfect the
lien thereof as against creditors of the Seller, or is in the process of being
recorded;
(aaa) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(bbb) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, 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 Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (tt), (uu), (vv) or (xx) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price, together with all reasonable and customary out-of-pocket
expenses incurred by the Purchaser as a result of such repurchase. In the event
that a breach shall involve any representation or warranty set forth in
Subsection 9.01, and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Seller of such breach, all of the
Mortgage Loans shall, at the Purchaser's option, be repurchased by the Seller at
the Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Subsection 9.02 (other than the representations and
warranties set forth in clauses (tt), (uu), (vv) or (xx) of such Subsection) and
the Seller discovers or receives notice of any such breach within 120 days of
the Closing Date, the Seller shall, at the Purchaser's option and provided that
the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage
Loan") and substitute in its place a Qualified Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 120
days after the Closing Date. If the Seller has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a
Mortgage Loan or Loans pursuant to the foregoing provisions of this Subsection
9.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall be retained by the Seller. For the month of
substitution, distributions to the Purchaser shall include the Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and Successor
Servicer respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph, "Purchaser" shall mean the Person then acting as
the Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement and "Successor Servicer" shall mean the Person
then acting as the Successor Servicer under this Agreement and any and all
Persons who previously were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement recognizing the servicer designated by the
Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans With Early Payment
Defaults.
If the related Mortgagor fails to make the first Monthly Payment due
to the Purchaser after the Closing Date on or before the date which is
forty-five days after the related Due Date, the Seller, at the Purchaser's
option exercised in its sole discretion, shall repurchase such Mortgage Loan
from the Purchaser at a price equal to the percentage of par as stated in the
Purchase Price and Terms Agreement (subject to adjustment as provided therein)
multiplied by the then outstanding principal balance of such Mortgage Loan, plus
accrued and unpaid interest thereon from the date to which interest was last
paid through the day prior to the repurchase date at the applicable Mortgage
Interest Rate, plus any outstanding advances owed to any servicer in connection
with such Mortgage Loan.
Subsection 9.05 Repurchase of Certain Mortgage Loans That Prepay
in Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan is prepaid in full on or before the date which
is twelve months after the Closing Date, the Seller shall pay the Purchaser,
within three (3) Business Days of such prepayment in full, the product of (a)
the difference between the Purchase Price for such Mortgage Loan and the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date and
(ii) the Premium Adjustment Percentage.
Subsection 9.06 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
review each Mortgage File and Credit File, to conduct property inspections,
obtain appraisal recertifications, drive-by appraisals, brokers price opinions
and otherwise to underwrite the Mortgage Loans and to reject any Mortgage Loan
which in the Purchaser's sole opinion is an unacceptable investment. In
addition, the Purchaser shall have the right to reject any Mortgage Loan which
in the Purchaser's sole determination (i) fails to conform to the Underwriting
Guidelines, (ii) the value of the Mortgaged Property pursuant to any brokers
price opinion is 15% or more below the original appraised value of the Mortgaged
Property; (iii) any Mortgage Loan Document in the related Mortgage File is
missing or defective in whole or in part; or (iv) the Mortgage Loan does not
conform to the terms of this letter agreement or is in breach of the
representations and warranties set forth in Section 9.02.
Notwithstanding the foregoing, the fact that the Purchaser or its
designee has conducted or failed to conduct the review/due diligence procedures
specified above or any other partial or complete examination of the Mortgage
Files or Credit Files shall not impair in any way the Purchaser's or any of its
successors' rights to demand repurchase, substitution or any other remedy
provided under this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with in all material respects; and
(vi) No Material Adverse Change or Market Change Event shall have
occurred since the date of the Purchase Price and Terms
Agreement.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit C hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit D hereto ("Opinion of
Counsel of the Seller") or such other form as is mutually
acceptable to the Purchaser and the Seller;
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
H;
12. Exhibit G to this Agreement; and
13. a MERS Report reflecting the Custodian as Investor and no
Person as Interim Funder for each MERS Designated Mortgage
Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees, any commissions (if
any) due its salesmen, the fees and expenses of its counsel, any initial setup
fee of the Custodian and any costs and expenses of the Custodian for the ongoing
maintenance of the Mortgage Loan files over the lives of the Mortgage Loans, and
all recording fees for transfers, if any, for the assignments of mortgage for
all Mortgage Loans not recorded in the name of MERS, for the assignments of
mortgage to the Purchaser or the Purchaser's assignee (regardless of when
recorded), all fees, if any, for transferring record ownership on the MERS
system of Mortgage Loans recorded in the name of MERS. All servicing fees
incurred prior to the related Closing Date, and all costs and expenses incurred
in connection with the transfer of the Mortgage Loans, fees to transfer files
and prepare assignments/endorsements, including the costs associated with
clearing exceptions, (including costs to record intervening assignments and any
existing assumption and modification agreements), any costs or expenses charged
by the Seller's custodian with respect to the Mortgage Loans and the fees and
expenses of Seller's counsel, shall be payable by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale (each, a "Reconstitution") of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(i) Xxxxxx Mae under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Mae or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(gg), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller as are reasonably believed necessary by the Purchaser or any such other
participant; and (iii) to execute, deliver and satisfy all conditions set forth
in any indemnity agreement required by the Purchaser or any such participant.
The Seller shall not be required to incur any out-of-pocket costs, expenses or
liability, except as contemplated in this section, in connection with the
Seller's obligations pursuant to this section. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller regarding the Seller, the Seller's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. The Seller shall indemnify or cause the Servicer to indemnify
the Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Servicer regarding the Servicer, the servicer's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. For purposes of the previous sentence, "Purchaser" shall mean
the Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall (except with
respect to each MERS Designated Mortgage Loan) execute each assignment of
mortgage, track such Assignments of Mortgage to ensure they have been recorded
and deliver them as required by the prospective purchaser or trustee, as
applicable, upon the Seller's receipt thereof. Additionally, the Seller shall
prepare and execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller;
Third Party Claims.
The Seller shall indemnify the Purchaser and Successor Servicer and
hold it harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees (including (without limitation) legal fees incurred in
connection with the enforcement of the Seller's indemnification obligation under
this Subsection 14.01) and related costs, judgments, and any other costs, fees
and expenses that the Purchaser or the Successor Servicer may sustain in any way
related to the failure of the Seller to perform its duties under this Agreement
and the Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representation, warranties and
covenants set forth in this Agreement (provided that such cost shall not include
any lost profits). The Seller immediately shall notify the Purchaser if a claim
is made by a third party with respect to this Agreement or any Reconstitution
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Seller or Servicer to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
The Purchaser agrees that it shall not disclose the financial
statements of the Seller except to the extent (a) the disclosure is reasonably
believed the Purchaser to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) they are disclosed to
any one or more of the Purchaser's employees, officers, directors, agents,
attorneys or accountants who would have access to the contents of this Agreement
and such data and information in the normal course of the performance of such
person's duties for such party, to the extent such party has procedures in
effect to inform such person of the confidential nature thereof; (c) they are
that is disclosed in a prospectus, prospectus supplement or private placement
memorandum relating to a securitization of the Mortgage Loans by the Purchaser
(or an affiliate assignee thereof) or to any Ratings Agency or other person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement; and
(d) that disclosure is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. As of the closing of the sale of the Mortgage
Loans, the Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the Purchase Price and Terms Agreement, and the Seller
agrees that it shall hold such Mortgage Loans in custody for the Purchaser
subject to the Purchaser's (i) right to reject any Mortgage Loan (or Qualified
Substitute Mortgage Loan) under the terms of this Agreement and to require
another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be substituted
therefor, and (ii) obligation to pay the Purchase Price for the Mortgage Loans.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, sent by
facsimile, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address as follows:
(i) if to the Seller:
WMC Mortgage Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
cc: Xxxxxx X. Xxxxxxxxx, General Counsel
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
Fax: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. After the Closing Date, this Agreement shall not be assigned, pledged
or hypothecated by the Seller to a third party without the prior written consent
of the Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. There shall be no limitation on the
number of assignments or transfers allowable by the Purchaser with respect to
the Mortgage Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and the
Purchaser shall be relieved from any liability to the Seller with respect
thereto. The Successor Servicer shall be an intended third party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process...The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Purchaser's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Confidentiality.
The Seller understands and agrees that the Operative Agreements, any
other agreements executed in connection with the sale contemplated hereunder,
any agreements executed in connection with the securitization of the Mortgage
Loans, and any offering circulars or other disclosure documents produced in
connection with such securitization are confidential and proprietary to the
Purchaser, and the Seller agrees to hold such documents confidential and not to
divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under this letter agreement
or the Operative Agreements, (b) to the extent such information enters into the
public domain other than through the wrongful act of the Seller, or (c) as is
necessary in working with legal counsel, auditors, rating agencies, agents,
taxing authorities or other governmental agencies.
SECTION 31. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST 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 OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 32. Submission To Jurisdiction; Waivers.
Each of the Seller and the Purchaser hereby irrevocably and
unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
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 date first above written.
XXXXXXX SACHS MORTGAGE COMPANY,
a New York limited partnership
(Purchaser)
By: XXXXXXX XXXXX REAL ESTATE FUNDING
CORP., a New York corporation,
as General Partner
By:______________________________
Name:____________________________
Title:___________________________
WMC MORTGAGE CORP.
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, if required;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan in blank, in form and
substance acceptable for recording. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "WMC Mortgage
Corp., successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the Assignment of Mortgage must be by "WMC Mortgage Corp., formerly known as
[previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee (or MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original power of attorney with evidence of recording thereon, if applicable, on
or prior to the Closing Date because of a delay caused by the public recording
office, the Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such power of attorney, together with an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such power of attorney has been dispatched to the
appropriate public recording office for recordation and that the original
recorded power of attorney or a copy of such power of attorney certified by such
public recording office to be a true and complete copy of the original recorded
power of attorney will be promptly delivered to the Custodian upon receipt
thereof by the Seller; and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 180 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the anticipated date the applicable recorded
document will be delivered to the Custodian. An extension of the date specified
in (iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment except for Mortgage Loans originated under a Limited Documentation
Program.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of WMC Mortgage Corp., a state chartered institution organized
under the laws of the state of California (the "Company") and further as
follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage Loan
Purchase and Warranties Agreement, dated as of August 15, 2002, by and
between Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"), and the Custodial Agreement dated as of August
15, 2002 by and among the Company, the Purchaser and Deutsche Bank
National Trust Company (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
8. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of WMC
Mortgage Corp., hereby certify that ____________ is the duly elected, qualified
and acting [Vice] President of the Company and that the signature appearing
above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
__________________________ __________________________ ________________________
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to WMC Mortgage Corp. (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Sachs Mortgage Company (the "Purchaser"), dated as of August
15, 2002 (the "Purchase Agreement") which sale is in the form of whole loans,
delivered pursuant to a Servicing Agreement, dated as of August 15, 2002, by and
between Purchaser and the Company (the "Servicing Agreement") and the Custodial
Agreement dated as of August 15, 2002 among the Purchaser, the Company, and
Deutsche Bank National Trust Company (the "Custodial Agreement" and,
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of Assignment of Mortgage;
5. the form of endorsement of the Mortgage Notes; and
6. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a corporation, duly organized, validly existing
and in good standing under the laws of California and is
qualified to transact business in, and is in good standing
under, the laws of California.
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Agreements and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that WMC Mortgage Corp. a corporation,
organized pursuant to the laws of California] (the "Company") has committed to
sell to Xxxxxxx Xxxxx Mortgage Company ("Purchaser") under a Mortgage Loan
Purchase and Warranties Agreement, dated as of August 15, 2002, certain mortgage
loans originated by the Association. The Company warrants that the mortgage
loans to be sold to Purchaser are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Purchaser shall not be used as additional or substitute collateral for advances
made by the Association. Purchaser understands that the balance of the Company's
mortgage loan portfolio may be used as collateral or additional collateral for
advances made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to __________________
_________________.
Very truly yours,
WMC MORTGAGE CORP.
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Acknowledged and approved:
_________________________
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by Xxxxxxx Sachs Mortgage Company ("Purchaser") from the Company named below
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement, dated
as of August 15, 2002, and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees, as of the
date and time of the sale of such Mortgage Loans to Purchaser.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to Xxxxxxx Xxxxx Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loan, the security interests in the Mortgage Loans released by the
above-named financial institution comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Company warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
WMC MORTGAGE CORP.
By:__________________________
Title:_________________________
Date:_________________________
EXHIBIT G
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than ___%
are secured by real property improved by individual condominium units, (c) no
more than ___% are secured by real property improved by an individual unit in a
planned unit development, and (d) at least ___% are secured by real property
with a detached one family residence erected thereon. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (a) no more than ____%
are "cash-out" refinance mortgage loans, (b) no more than ____% are rate and
term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, the weighted average
FICO Score shall be at least _______. No Mortgage Loan shall have a FICO Score
less than ___. With respect to the aggregate unpaid principal balance of the
Mortgage Loans, (i) no more than __% of the Mortgage Loans were originated under
the Seller's `stated documentation' program, (ii) no more than __% of the
Mortgage Loans were originated under a documentation program which is lacking
ratio verification, (iii) no more than __% of the Mortgage Loans have no
documentation and (iv) at least _________% of the Mortgage Loan were originated
under the Seller's `full documentation' program. The maximum Mortgage Interest
Rate on the Mortgage Loans as of the Cut-off Date was ____%. The minimum
Mortgage Interest Rate on the Mortgage Loans as of the Cut-off Date was ____%.
The Mortgage Loans have a weighted average remaining term of ___ months. The
maximum original principal balance of the Mortgage Loans is $_______________.
The minimum original principal balance of the Mortgage Loans is $______________.
The average original principal balance of the Mortgage Loans is $
_______________. With respect to the aggregate unpaid principal balance of the
Mortgage Loans: (a) __% of the Mortgaged Properties will be located in
[_______]; (b) __% of the Mortgaged Properties will be located in [______] and
(c) not more than __% of the Mortgaged Properties will be located in any other
single state. The Mortgage Loan, as of the date of its origination, has an LTV
equal to or less than ___%. The weighted average LTV of all the Mortgage Loans
as of their respective dates of origination was not greater than ____%
EXHIBIT H
SELLER'S UNDERWRITING GUIDELINES
--------------------------------
EXHIBIT I
MORTGAGE LOAN SCHEDULE
----------------------
EXHIBIT J
MORTGAGE LOAN SCHEDULE FIELDS
-----------------------------
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but based
on the actual amortization schedule;
(7) with respect to First Lien Loans, the LTV and with respect to
Second Lien Loans, the CLTV, each at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien, Second Lien);
(22) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e. full,
alternative or reduced);
(24) the loan credit classification (as described in the
Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(27) a description of the Prepayment Penalty, if applicable;
(28) the Mortgage Interest Rate as of origination;
(29) the credit risk score (FICO score) at origination;
(30) the date of origination;
(31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(35) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan;
(36) a code indicating whether the Mortgage Loan is assumable;
(37) a code indicating whether the Mortgage Loan has been modified;
(38) the Current CLTV;
(39) the one year payment history, if applicable;
(40) the Due Date for the first Monthly Payment;
(41) the original Monthly Payment due;
(42) with respect to the related Mortgagor, the debt-to-income
ratio;
(43) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien;
(44) the Appraised Value of the Mortgaged Property;
(45) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(46) the MERS Identification Number.
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
EXHIBIT K
PREMIUM ADJUSTMENT PERCENTAGE
-----------------------------
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For the period from the Closing Date to, but excluding the 12/12
date which is one month after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is one month after the 11/12
Closing Date to, but excluding the date which is two month
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is two months after the 5/6
Closing Date to, but excluding the date which is three months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is three months after the 3/4
Closing Date to, but excluding the date which is four months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is four months after the 2/3
Closing Date to, but excluding the date which is five months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is five months after the 7/12
Closing Date to, but excluding the date which is six months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is six months after the 1/2
Closing Date to, but excluding the date which is seven months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is seven months after the 5/12
Closing Date to, but excluding the date which is eight months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is eight months after the 1/3
Closing Date to, but excluding the date which is nine months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is nine months after the 1/4
Closing Date to, but excluding the date which is ten months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is ten months after the 1/6
Closing Date to, but excluding the date which is eleven months
after the Closing Date:
--------------------------------------------------------------------------------
For the period from the date which is eleven months after the 1/12
Closing Date to, but excluding the date which is twelve months
after the Closing Date:
--------------------------------------------------------------------------------
