AMENDMENT NO. 1
EXECUTION
COPY
AMENDMENT
XX. 0
XXXXXXXXX
XX. 0, dated as of July 24, 2006 (“Amendment”),
to
the Second Amended and Restated Flow Seller’s Warranties and Servicing
Agreement, dated as of January 1, 2006, and as further amended, modified and
supplemented from time to time (the “Purchase
and Servicing Agreement”),
between XXXXXXX XXXXX MORTGAGE COMPANY (the “Purchaser”)
and
NATIONAL CITY MORTGAGE CO. (the “Company”).
RECITALS
WHEREAS,
the parties hereto have entered into the Purchase and Servicing
Agreement;
WHEREAS,
the parties hereto desire to modify the Purchase and Servicing Agreement as
set
forth in this Amendment;
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
1. Defined
Terms. Unless otherwise defined herein, terms defined in the Purchase and
Servicing Agreement are used herein as therein defined.
2. Amendments.
(a) Amendment
of the Definition of High Cost Loan.
Section
1 of the Purchase and Servicing Agreement is hereby amended by deleting the
definition of “High Cost Loan” therein in its entirety and replacing it with the
following definition:
“High
Cost Loan:
A
Mortgage Loan (a) covered by the Home Ownership and Equity Protection Act of
1994 (“HOEPA”), (b) with an “annual percentage rate” or total “points and fees”
payable by the related Mortgagor (as each such term is calculated under HOEPA)
that exceed the thresholds set forth by HOEPA and its implementing regulations,
including 12 C.F.R. § 226.32(a)(1)(i) and (ii), (c) classified as a “high cost
home,” “threshold,” “covered,” “high risk home,” “predatory” or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees) or (d) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor’s
Glossary. For avoidance of doubt, the parties agree that this definition shall
apply to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.”
(b) Amendment
of Compliance with Applicable Laws Representation.
Subsection 3.2(ix) of the Purchase and Servicing Agreement is hereby amended
by
deleting the first sentence thereof in its entirety and replacing it with the
following sentence:
“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, predatory, abusive and fair lending laws, equal credit
opportunity and disclosure laws or unfair and deceptive practices laws
applicable to the Mortgage Loan including, without limitation, any provisions
relating to prepayment penalties, have been complied with, the consummation
of
the transactions contemplated hereby will not involve the violation of any
such
laws or regulations, and the Company 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.”
(c) Amendment
of Location and Type of Property Representation.
Subsection 3.2(x) of the Purchase and Servicing Agreement is hereby amended
by
deleting the third sentence thereof in its entirety and replacing it with the
following sentence:
“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, (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 Company as mortgagee, (iii) the related
Mortgaged Property is not located in the state of New Jersey and (iv) as of
the
origination date of the related Mortgage Loan, the related manufactured housing
unit that secures such Mortgage Loan either: (x) was the principal residence
of
the Mortgagor or (y) was classified as real property under applicable state
law.”
(d) Amendment
of Prepayment Penalty Representation.
Subsection 3.2(xliii) of the Purchase and Servicing Agreement is hereby amended
by deleting it in its entirety and replacing it with the following:
“Prepayment
Penalties.
The
Mortgage Loan is subject to a prepayment penalty as provided in the related
Mortgage Note and rider except as set forth on the related Mortgage Loan
Schedule. With respect to each Mortgage Loan that has a prepayment penalty
feature, each such prepayment penalty is enforceable and will be enforced by
the
Company for the benefit of the Purchaser, and each prepayment penalty is
permitted pursuant to federal, state and local law. Each such prepayment penalty
is in an amount not more than the maximum amount permitted under applicable
law
and no such prepayment penalty may provide for a term in excess of five (5)
years with respect to Mortgage Loans originated prior to October, 1, 2002.
With
respect to Mortgage Loans originated on or after October 1, 2002, the duration
of the prepayment period shall not exceed three (3) years from the date of
the
Mortgage Note unless the Mortgage Loan was modified to reduce the prepayment
period to no more than three (3) years from the date of such Mortgage Loan
and the Mortgagor was notified in writing of such reduction in prepayment
penalty period. With respect to any Mortgage Loan that contains a provision
permitting imposition of a penalty upon a prepayment prior to maturity: (i)
the
Mortgage Loan provides some benefit to the Mortgagor (e.g., a rate or fee
reduction) in exchange for accepting such prepayment penalty (ii) prior to
the
Mortgage Loan’s origination the Mortgagor was offered, the option of obtaining a
mortgage loan that did not require payment of such a penalty and (iii) the
prepayment penalty was adequately disclosed to the Mortgagor in the mortgage
loan documents pursuant to applicable state, local and federal law. This
representation and warranty is a Deemed Material Breach
Representation;”
(e) Amendment
of Origination Practices Representation.
Subsection 3.2(xlvi) of the Purchase and Servicing Agreement is hereby amended
by deleting it in its entirety and replacing it with the following:
“Origination
Practices.
The
Mortgagor was not encouraged or required to select a Mortgage Loan product
offered by the Mortgage Loan’s originator which is a higher cost product
designed for less creditworthy borrowers, unless at the time of the Mortgage
Loan’s origination, such Mortgagor did not qualify taking into account such
facts as, without limitation, the Mortgage Loan’s requirements and the
Mortgagor’s credit history, income, assets, and liabilities and debt-to-income
ratios for a lower-cost credit product then offered by the Mortgage Loan’s
originator or any affiliate of the Mortgage Loan’s originator. If, at the time
of loan application, the Mortgagor may have qualified for a lower-cost credit
product then offered by any mortgage lending affiliate of the Mortgage Loan’s
originator, the Mortgage Loan’s originator referred the Mortgagor’s application
to such affiliate for underwriting consideration. This representation and
warranty is a Deemed Material Breach Representation;”
(f) Amendment
of Underwriting Methodology Representation.
Subsection 3.2(xlvii) of the Purchase and Servicing Agreement is hereby amended
by deleting it in its entirety and replacing it with the following:
“Underwriting
Methodology
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
does not rely solely on the extent of the Mortgagor’s equity in the collateral
as the principal determining factor in approving such extension of credit.
The
methodology employed objective criteria such as the Mortgagor’s income, assets
and liabilities, to the proposed mortgage payment and, based on such
methodology, the Mortgage Loan’s originator made a reasonable determination that
at the time of origination the Mortgagor had the ability to make timely payments
on the Mortgage Loan. Such underwriting methodology confirmed that at the time
of origination (application/approval) the Mortgagor had a reasonable ability
to
make timely payments on the Mortgage Loan. This representation and warranty
is a
Deemed Material Breach Representation;”
(g) Amendment
of Points and Fees Representation.
Subsection 3.2(xlviii) of the Purchase and Servicing Agreement is hereby amended
by deleting it in its entirety and replacing it with the following:
“Points
and Fees
No
Mortgagor was charged “points and fees” (whether or not financed) in an amount
greater than 5% of the principal amount of such Mortgage Loan. For purposes
of
this representation, such 5% limitation is calculated in accordance with Xxxxxx
Mae’s anti-predatory lending requirements as set forth in the Xxxxxx Xxx Guides
and “points and fees” (x) include origination, underwriting, broker and finder
fees and charges that the mortgagee imposed as a condition of making the
Mortgage Loan, whether they are paid to the mortgagee or a third party, and
(y)
exclude bona fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys’ fees,
notaries fees and fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price adjustments,
the costs of title, hazard, and flood insurance policies, state and local
transfer taxes or fees, escrow deposits for the future payment of taxes and
insurance premiums, and other miscellaneous fees and charges which miscellaneous
fees and charges, in total, do not exceed 0.25% of the principal amount of
such
Mortgage Loan. This representation and warranty is a Deemed Material Breach
Representation;”
(h) Amendment
of Second Lien Mortgage Loan Representation.
Subsection 3.2(l) of the Purchase and Servicing Agreement is hereby amended
by
deleting clause (5) of the first sentence thereof in its entirety and replacing
it with the following clause:
“(5)
the
related Mortgaged Property was the Mortgagor’s principal
residence.”
3. Governing
Law.THIS
AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW WITHOUT REFERENCE TO CHOICE OF
LAW
DOCTRINE.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.
COMPANY:
NATIONAL
CITY MORTGAGE CO.
By:
_____________________________________________
Name:
Title:
PURCHASER:
XXXXXXX
SACHS MORTGAGE COMPANY, a
New
York limited partnership
By:
Xxxxxxx Xxxxx Real Estate Funding Corp., a
New
York corporation, its General Partner
By:
_____________________________________________
Name:
Title:
