EX 99.10
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Xxxxxx Brothers Bank, FSB,
Purchaser
and
ABN AMRO Mortgage Group, Inc.,
Company
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SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of February 1, 2002
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Conventional Residential Adjustable Rate Mortgage Loans
Group No. 2002-1
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TABLE OF CONTENTS
Page
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ARTICLE
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS;
DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing Files...10
Section 2.02 Books and Records; Transfers of Mortgage Loans...............................................11
Section 2.03 Delivery of Documents........................................................................12
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.......................................................13
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans...........................16
Section 3.03 Remedies for Breach of Representations and Warranties........................................25
Section 3.04 Restrictions and Requirements Applicable in the Event
that a Mortgage Loan is Acquired by a REMIC................................................26
Section 3.05 Early Payment Default........................................................................27
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer...................................................................28
Section 4.02 Liquidation of Mortgage Loans................................................................29
Section 4.03 Collection of Mortgage Loan Payments.........................................................30
Section 4.04 Establishment of and Deposits to Custodial Account...........................................30
Section 4.05 Permitted Withdrawals From Custodial Account.................................................32
Section 4.06 Establishment of and Deposits to Escrow Account..............................................33
Section 4.07 Permitted Withdrawals From Escrow Account....................................................33
Section 4.08 Payment of Taxes, Insurance and Other Charges................................................34
Section 4.09 Protection of Accounts.......................................................................34
Section 4.10 Maintenance of Hazard Insurance..............................................................35
Section 4.11 Maintenance of Mortgage Impairment Insurance.................................................37
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................37
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Section 4.13 Inspections..................................................................................37
Section 4.14 Restoration of Mortgaged Property............................................................38
Section 4.15 Maintenance of PMI Policy; Claims............................................................38
Section 4.16 Title, Management and Disposition of REO Property............................................39
Section 4.17 Real Estate Owned Reports....................................................................40
Section 4.18 Liquidation Reports..........................................................................40
Section 4.19 Notification of Adjustments..................................................................41
Section 4.20 Reports of Foreclosures and Abandonments of Mortgaged Property...............................41
Section 4.21 Appointment and Designation of Master Servicer...............................................41
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances..................................................................................41
Section 5.02 Statements to Purchaser......................................................................42
Section 5.03 Monthly Advances by Company..................................................................42
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property..............................................................43
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files......................................44
Section 6.03 Servicing Compensation.......................................................................44
Section 6.04 Annual Statement as to Compliance............................................................44
Section 6.05 Annual Independent Public Accountants' Servicing Report......................................45
Section 6.06 Right to Examine Company Records.............................................................45
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this Agreement Upon an Agency
Transfer, or a Pass-Through Transfer on One or More Reconstitution Dates...................45
Section 7.02 Purchaser's Repurchase and Indemnification Obligations.......................................46
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.....................................................................47
Section 8.02 Financial Statements; Servicing Facility.....................................................48
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims..........................................................48
Section 9.02 Merger or Consolidation of the Company.......................................................49
Section 9.03 Limitation on Liability of Company and Others................................................49
Section 9.04 Limitation on Resignation and Assignment by Company..........................................49
ARTICLE X
DEFAULT
Section 10.01 Events of Default............................................................................50
Section 10.02 Waiver of Defaults...........................................................................51
ARTICLE XI
TERMINATION
Section 11.01 Termination..................................................................................52
Section 11.02 Termination Without Cause....................................................................52
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.........................................................................52
Section 12.02 Amendment....................................................................................53
Section 12.03 Governing Law................................................................................53
Section 12.04 Duration of Agreement........................................................................53
Section 12.05 Notices......................................................................................54
Section 12.06 Severability of Provisions...................................................................54
Section 12.07 Relationship of Parties......................................................................54
Section 12.08 Execution; Successors and Assigns............................................................55
Section 12.09 Recordation of Assignments of Mortgage.......................................................55
Section 12.10 Assignment by Purchaser......................................................................55
Section 12.11 No Personal Solicitation.....................................................................55
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EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C MORTGAGE LOAN DOCUMENTS
EXHIBIT D-1 FORM OF CUSTODIAL ACCOUNT
CERTIFICATION
EXHIBIT D-2 FORM OF CUSTODIAL ACCOUNT
LETTER AGREEMENT
EXHIBIT E-1 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT E-2 FORM OF ESCROW ACCOUNT
LETTER AGREEMENT
EXHIBIT F FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION
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This is a Seller's Warranties and Servicing Agreement for
conventional adjustable rate residential first mortgage loans, dated and
effective as of February 1, 2002, and is executed between Xxxxxx Brothers Bank,
FSB, as purchaser (the "Purchaser"), and ABN AMRO Mortgage Group, Inc., as
seller and servicer (the "Company").
W I T N E S S E T H:
WHEREAS, the Purchaser has agreed to purchase from the Company
and the Company has agreed to sell to the Purchaser certain Mortgage Loans;
WHEREAS, each of the Mortgage Loans is secured by a mortgage,
deed of trust or other security instrument creating a first lien on a
residential dwelling located in the jurisdiction indicated on the Mortgage Loan
Schedule, which is annexed hereto as Exhibit A; and
WHEREAS, the Purchaser and the Company wish to prescribe the
manner of purchase of the Mortgage Loans and the management, servicing and
control of the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser and the
Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
ABN Parent: ABN AMRO North America Inc. or any successor
thereto.
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.
Agency Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans to Xxxxxx Xxx under its Cash Purchase Program or its
MBS Swap Program (Special Servicing Option) or to Xxxxxxx Mac under its Xxxxxxx
Xxx Xxxx Program or Gold PC Program, retaining the Company as "servicer
thereunder".
Agreement: This Seller's Warranties and Servicing Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Approved Flood Policy Insurer: A flood insurer acceptable to
Xxxxxx Xxx or Xxxxxxx Mac.
Approved Tax Service Contract Provider: Any of the following
providers: First America or Transamerica.
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.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions in the State of
New York are authorized or obligated by law or executive order to be closed.
Closing Date: February 20, 2002.
Code: The Internal Revenue Code of 1986, as it may be amended
from time to time or any successor statute thereto, and applicable U.S.
Department of the Treasury regulations issued pursuant thereto.
Company: ABN AMRO Mortgage Group, Inc., or its successor in
interest or assigns, or any successor to the Company under this Agreement
appointed as herein provided.
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.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 4.04.
Custodial Agreement: That certain Custodial Agreement, by and
between the Purchaser and US Bank Trust National Association dated as of
September 1, 1999, as amended from time to time.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided.
Cut-off Date: February 1, 2002.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by
the Company in accordance with the terms of this Agreement and which is, in the
case of a substitution pursuant to Section 3.03, replaced or to be replaced with
a Qualified Substitute Mortgage Loan.
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Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Remittance Date.
Disqualified Organization: An organization defined as such in
Section 860E(e) of the Code.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace. With respect to the
Mortgage Loans for which payment from the Mortgagor is due on a day other than
the first day of the month, such Mortgage Loans will be treated as if the
Monthly Payment is due on the first day of the month of such Due Date.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending in the first day of the month of the Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated "P-1" by Xxxxx'x Investors Service, Inc. and the long-term debt
obligations of such holding company) are rated "P-1" by Xxxxx'x
Investors Service, Inc. and the long-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by Xxxxx'x Investors Service,
Inc.;
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
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Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 4.06.
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 related
document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01.
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.
FICO Score: The statistical credit score, calculated as the
non-zero minimum of the lower of two or the median of three credit scores,
obtained by mortgage lenders in connection with the loan application to help
assess a potential mortgagor's credit worthiness.
Fidelity Bond: A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
First Remittance Date: March 18, 2002.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or
any successor thereto.
Gross Margin: With respect to each Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note.
Index: A rate per annum equal to the weekly average of the
closing market bid yields on actively traded U.S. Treasury securities adjusted
to a constant maturity of one year, as published by the Board of Governors of
the Federal Reserve System in Statistical Release No. H.15 or any similar
publication or, if not published, as reported by any Federal Reserve Bank or by
any U.S. Government department or agency, as of the date 45 days prior to the
Interest Rate Adjustment Date.
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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: The date on which an adjustment
to the Mortgage Interest Rate on a Mortgage Note becomes effective.
Lifetime Rate Cap: The provision of each Mortgage Note which
provides for an absolute maximum Mortgage Interest Rate thereunder.
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 of the Stated Principal Balance 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 and (b) if the Mortgage Loan was made to finance the
acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
Monthly Advance: The portion of Monthly Payment delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal
and interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument
securing a Mortgage Note, which creates a first lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note.
Mortgage 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 Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note, as adjusted from time to time in accordance with the provisions
of the Mortgage Note. The Mortgage Interest Rate, as determined on each Interest
Rate Adjustment Date, is equal to the sum of the Index and the Gross Margin,
adjusted, if necessary, to comply with the Periodic Rate Cap and Lifetime Rate
Cap.
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 Monthly Payments,
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Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in Exhibit C
hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the annual rate of interest remitted to the Purchaser, which shall be
equal to the Mortgage Interest Rate minus the Servicing Fee Rate .
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Exhibit A, such schedule setting forth the information with respect to
each Mortgage Loan set forth in the Purchase Price and Terms Letter:
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property: The real property 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 the President or a Vice President
or an assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Company, and delivered
to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
an employee of the Company, reasonably acceptable to the Purchaser, provided
that any Opinion of Counsel relating to (a) qualification of the Mortgage Loans
in a REMIC or (b) compliance with the REMIC Provisions, must be an opinion of
counsel who (i) is in fact independent of the Company and any master servicer of
the Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Company or any master servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Company or any master
servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Pass-Through Transfer: The sale or transfer of some or all of
the Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction, retaining
the Company as "servicer" (with or without a master servicer) thereunder.
Periodic Rate Cap: The provision of each Mortgage Note which
provides for an absolute maximum amount by which the Mortgage Interest Rate
therein may increase on an Interest Rate Adjustment Date above the Mortgage
Interest Rate previously in effect.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof.
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PMI Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer, as required by this Agreement with respect to
certain Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any
Mortgage Loan that was subject to a Principal Prepayment in full or in part
during any Due Period, which Principal Prepayment was applied to such Mortgage
Loan prior to such Mortgage Loan's Due Date in such Due Period, the amount of
interest (net the related Servicing Fee) that would have accrued on the amount
of such Principal Prepayment during the period commencing on the date as of
which such Principal Prepayment was applied to such Mortgage Loan and ending on
the day immediately preceding such Due Date, inclusive.
Prime Rate: The prime rate announced to be in effect from time
to time, as published as the average rate in the "Money Rates" section of The
Wall Street Journal.
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.
Principal Prepayment Period: The month preceding the month in
which the related Remittance Date occurs.
Purchaser: Xxxxxx Brothers Bank, FSB or its successor in
interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser: An appraiser, duly appointed by the
Company or the originator of the Mortgage Loan, 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 Federal 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 Depository: A depository the accounts of which are
insured by the FDIC through the BIF or the SAIF and the debt obligations of
which are rated AA or better by Standard & Poor's Corporation.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible
to be substituted by the Company 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 Stated Principal
Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate
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not less than and not more than 2% greater than the Mortgage Loan Remittance
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) have a Gross Margin not less than that of the Deleted Mortgage Loan;
(v) have a Lifetime Rate Cap not less than that of the Deleted Mortgage Loan;
(vi) have a maximum Periodic Rate Cap not less than that of the Deleted Mortgage
Loan; (vii) comply with each representation and warranty set forth in Sections
3.01 and 3.02; and (viii) be a REMIC Eligible Mortgage Loan.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's,
Duff & Xxxxxx or their respective successors designed by the Purchaser.
Reconstitution Agreements: The agreement or agreements entered
into by the Purchaser, the Company, Xxxxxx Mae or Xxxxxxx Mac or certain third
parties on the Reconstitution Date(s) with respect to any or all of the Mortgage
Loans serviced hereunder, in connection with a Pass-Through Transfer or an
Agency Transfer as set forth in Section 7.01, including, but not limited to, (i)
a Xxxxxx Mae Mortgage Selling and Servicing Contract, a Pool Purchase Contract,
and any and all servicing agreements and tri-party agreements reasonably
required by Xxxxxx Mae with respect to a Xxxxxx Xxx Transfer, (ii) a Purchase
Contract and all purchase documents associated therewith as set forth in the
Xxxxxxx Xxx Xxxxxxx' & Servicers' Guide, and any and all servicing agreements
and tri-party agreements reasonably required by Xxxxxxx Mac with respect to a
Xxxxxxx Mac Transfer, and (iii) a Pooling and Servicing Agreement and/or a
subservicing/master servicing agreement and related custodial/trust agreement
and related documents with respect to a Pass-Through Transfer. Such agreement or
agreements shall prescribe the rights and obligations of the Company in
servicing the related Mortgage Loans and shall provide for servicing
compensation to the Company (calculated on a weighted average basis for all the
related Mortgage Loans as of the Reconstitution Date), net of any guarantee fees
due Xxxxxx Xxx or Xxxxxxx Mac, if applicable, at least equal to the Servicing
Fee due the Company in accordance with this Agreement or the servicing fee
required pursuant to the Reconstitution Agreement, whichever is less. The form
of relevant Reconstitution Agreement to be entered into by the Purchaser and/or
master servicer or trustee and the Company with respect to Pass-Through
Transfers shall be reasonably satisfactory in form and substance to the
Purchaser and the Company (giving due regard to any rating or master servicing
requirements) and the representations and warranties and servicing provisions
contained therein shall be substantially similar to those contained in this
Agreement, unless otherwise mutually agreed by the parties.
Reconstitution Date: The date or dates on which any or all of
the Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of an Agency Transfer or a Pass-Through
Transfer pursuant to Section 7.01 hereof. On such date or dates, the Mortgage
Loans transferred shall cease to be covered by this Agreement and the Company's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.
Record Date: The close of business of the last Business Day of
the month preceding the month of the related Remittance Date.
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REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Documents: The document or documents creating and
governing the administration of a REMIC.
REMIC Eligible Mortgage Loan: A Mortgage Loan held by a REMIC
which satisfies and/or complies with all applicable REMIC Provisions.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 86OG 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 18th day (or if such 18th day is not a
Business Day, the first Business Day immediately following) of any month,
beginning with the First Remittance Date.
REO Disposition: The final sale by the Company of any REO
Property.
REO Disposition Proceeds: All amounts received with respect to
an REO Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on
behalf of the Purchasers through foreclosure or by deed in lieu of foreclosure,
as described in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate
from the date on which interest has last been paid and distributed to the
Purchaser to the date of repurchase, less amounts received or advanced in
respect of such repurchased Mortgage Loan which are being held in the Custodial
Account for distribution in the month of repurchase.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Securities Act of 1933 or the 1933 Act: The Securities Act of
1933, as amended.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses other than Monthly Advances (including
reasonable attorneys' fees and disbursements) incurred in the performance by the
Company of its servicing obligations, including, but not limited to, the cost of
(a) the preservation, restoration and protection of the Mortgaged Property, (b)
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount
of the annual fee the Purchaser shall pay to the Company, which shall, for a
period of one full month, be 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, computed on the basis of the same
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principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. 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, to the extent permitted by Section 4.05) of such Monthly Payment
collected by the Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: 0.375% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Company consisting of originals of all documents in the Mortgage
File which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in Exhibit C the originals of which are delivered to the
Custodian pursuant to Section 2.01.
Servicing Officer: Any officer of the Company involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Purchaser upon request, as such list may from time to time be amended.
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, whether or not received,
minus (ii) all amounts previously distributed to the Purchaser with respect to
the related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Tax Returns: The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of any REMIC under the REMIC Provisions, together with any
and all other information, reports or returns that may be required to be
furnished to the certificate holders under a REMIC or filed with the Internal
Revenue Service or any other governmental taxing authority under any applicable
provisions of federal, state or local tax laws.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS;
DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of
Mortgage Files; Maintenance of Servicing Files.
The Company, 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 the
right, title and interest of the Company in and to the Mortgage Loans. Pursuant
to Section 2.03, the Company has delivered the Mortgage Loan Documents to the
Custodian.
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The contents of each Mortgage File not delivered to the
Custodian are and shall be held in trust by the Company for the benefit of the
Purchaser as the owner thereof. The Company shall maintain a Servicing File
consisting of a copy of the contents of each Mortgage File and the originals of
the documents in each Mortgage File not delivered to the Custodian. The
possession of each Servicing File by the Company is at the will of the Purchaser
for the sole purpose of servicing the related Mortgage Loan, and such retention
and possession by the Company is in a custodial capacity only. Upon the sale of
the Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and
the related Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only in
such custodial capacity. Each Servicing File shall be segregated from the other
books and records of the Company and shall be marked appropriately to reflect
clearly the sale of the related Mortgage Loan to the Purchaser. The Company
shall release its custody of the contents of any Servicing File only in
accordance with written instructions from the Purchaser, unless such release is
required as incidental to the Company's servicing of the Mortgage Loans or is in
connection with a repurchase of any Mortgage Loan pursuant to Section 3.03 ,
3.05, 3.06 or 6.02.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser
all rights arising out of the Mortgage Loans including but not limited to all
funds received on or in connection with the Mortgage Loan, shall be received and
held by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the
Company's balance sheet and other financial statements as a sale of assets by
the Company. The Company 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 Company shall maintain in its possession,
available for inspection by the Purchaser, or its designee 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 Flood Disaster Protection
Act of 1973, as amended, to the Mortgaged Property, documentation evidencing
insurance coverage and eligibility of any condominium project for approval by
Xxxxxx Mae and periodic inspection reports as required by Section 4.13. To the
extent that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Company
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Company complies with the requirements of the Xxxxxx
Xxx Selling and Servicing Guide, as amended from time to time.
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The Company shall maintain with respect to each Mortgage Loan
and shall make available for inspection by any Purchaser or its designee the
related Servicing File during the time the Purchaser retains Ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and regulations.
The Company shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Company shall note transfers of Mortgage Loans. No transfer of a Mortgage
Loan may be made unless such transfer is in compliance with the terms hereof.
For the purposes of this Agreement, the Company shall be under no obligation to
deal with any person with respect to this agreement or the Mortgage Loans unless
the books and records show such person as the owner of the Mortgage Loan. The
Purchaser may, subject to the terms of this Agreement, sell and transfer one or
more of the Mortgage Loans, provided, however, that (i) the transferee will not
be deemed to be a Purchaser hereunder binding upon the Company unless such
transferee shall agree in writing to be bound by the terms of this Agreement and
an original counterpart of the instrument of transfer and an assignment and
assumption of this Agreement in the form of Exhibit G hereto executed by the
transferee shall have been delivered to the Company, and (ii) in no event shall
there be more than four Persons at any given time having the status of
"Purchaser" hereunder. The Purchaser also shall advise the Company of the
transfer. Upon receipt of notice of the transfer, the Company shall xxxx its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.03 Delivery of Documents.
On or prior to the date which is five Business Days prior to
the Closing Date, Company has delivered and released to the Custodian those
Mortgage Loan Documents as required by this Agreement with respect to each
Mortgage Loan a list of which is attached as Exhibit C hereto.
The Custodian has certified its receipt of all such Mortgage
Loan Documents required to be delivered pursuant to the Custodial Agreement, as
evidenced by the Initial Certification of the Custodian in the form annexed to
the Custodial Agreement. The Purchaser shall be responsible for maintaining the
Custodial Agreement for the benefit of the Purchaser and shall pay all fees and
expenses of the Custodian.
The Company shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within one
week of their execution, provided, however, that the Company shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within one week of its execution, and shall 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 sixty days of its submission for recordation.
On or prior to the date which is two Business Days prior to
the Closing Date, the Company shall deliver to the Purchaser the related
Mortgage Loan Schedule.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company represents and warrants to the Purchaser that as
of the Closing Date:
(a) Due Organization and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware 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 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 Company, and in any event the Company is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement; the Company has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Company; and all requisite corporate action has been taken by
the Company to make this Agreement valid and binding upon the Company in
accordance with its terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Company, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Company 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 of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser or 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 Company's charter or by-laws or any legal restriction or any
agreement or instrument to which the Company 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 Company or its property is subject, or impair
the ability of the Purchaser to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Ability to Service. The Company is an approved
seller/servicer of conventional residential mortgage loans for Xxxxxx Xxx or
Xxxxxxx Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans. The Company is in good standing to sell mortgage loans to and
service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred,
including but not limited to a change in insurance coverage, which would make
the Company unable to comply with Xxxxxx Mae or Xxxxxxx Mac eligibility
requirements or which would require notification to either Xxxxxx Mae or Xxxxxxx
Mac;
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(e) Reasonable Servicing Fee. The Company acknowledges and
agrees that the Servicing Fee, as calculated at the Servicing Fee Rate,
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Company, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement.
(f) Ability to Perform. The Company 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 Company is solvent and the sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of the
Company's creditors;
(g) No Litigation Pending. There is no action, suit,
proceeding or investigation pending or threatened against the Company which,
either in any one instance or in the aggregate, will likely 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 this Agreement or the Mortgage Loans or
of any action taken or to be taken in connection with the obligations of the
Company contemplated herein, or which would be likely to impair materially the
ability of the Company to perform under the terms of this Agreement;
(h) No Consent Required. 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 this Agreement or the sale of the Mortgage Loans as evidenced by
the consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;
(i) Selection Process. The Mortgage Loans were not
intentionally selected in a manner so as to affect adversely the interests of
the Purchaser;
(j) Pool Characteristics. With respect to the aggregate
outstanding principal balance of all the Mortgage Loans, (a) approximately
_____% of the Mortgage Loans are secured by real property improved by two- to
four- family dwellings, (b) approximately ____% are secured by real property
improved by individual condominium units, (c) approximately ____% are secured by
real property improved by an individual unit in a planned unit development, (d)
approximately ___% are secured by real property improved by a townhouse and (e)
approximately _____% are secured by real property with an attached or detached
one family residence erected thereon. With respect to the aggregate outstanding
principal balance of all the Mortgage Loans, approximately (a) _____% of the
Mortgaged Properties are owner occupied primary residences; and (b) ____% are
owner occupied secondary residences. Approximately _____% of the Mortgage Loans
have a Loan-to-Value Ratio in excess of 80%. No Mortgage Loan had a
loan-to-value ratio in excess of 95%. The Mortgage Loans had a weighted average
loan-to-value ratio, at origination, of _____%. With respect to the aggregate
unpaid principal balance of the Mortgage Loans, (a) approximately _______% are
"cash-out" refinance mortgage loans, (b) approximately _____% are rate and term
refinance mortgage loans, (c) approximately ____% are purchase mortgage loans
and (d) approximately ___% are construction-to-permanent mortgage loans. The
Mortgage Loans have a weighted average remaining term of _____ months The
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weighted average age of the Mortgage Loans is less than one month. Each of the
Mortgage Loans has an initial interest rate adjustment cap of _____% and a
Periodic Rate Cap of ____%. The weighted average gross Lifetime Rate Cap on the
Mortgage Loans as of the Cut-off Date is _______%. 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 ____%.
With respect to the aggregate unpaid principal balance of the Mortgage Loans,
(i) approximately _____% of the Mortgaged Properties securing the Mortgage Loans
are located in California, (ii) approximately _____% of the Mortgaged Properties
securing the Mortgage Loans are located in Washington, (iii) approximately ____%
are located in Illinois and (iv) not more than ____% are located in any one
state. The mortgage loans have a net weighted average margin of _____%. The
weighted average FICO score with respect to the Mortgage Loans is ____. No
Mortgage Loan shall have a FICO score of less than ____. The maximum original
principal balance of any Mortgage Loan was $________. The minimum original
principal balance of any Mortgage Loan was $___________. The average original
principal balance of the Mortgage Loans is $_______. All the Mortgage Loans were
underwritten under the Company's "Full/ALT" documentation program.
(k) No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(l) Sale Treatment. The Company has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(m) Financial Statements. The Company has delivered to the
Purchaser financial statements of ABN Parent as to its last two 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 at the end of each such
period of ABN Parent 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 change in the business, operations, financial condition, properties or assets
of the Company since the date of the Company's financial statements that would
have a material adverse effect on its ability to perform its obligations under
this Agreement;
(n) No Brokers' Fees. The Company 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;
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(o) Fair Consideration. The consideration received by the
Company upon the sale of the Mortgage Loans under this Agreement constitutes
fair consideration and reasonably equivalent value for the Mortgage Loans; and
(p) Seller's Origination. The Company's decision to originate,
fund or purchase any mortgage loan or to deny any mortgage loan application is
an independent decision based upon Company'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.
Section 3.02 Representations and Warranties Regarding
Individual Mortgage Loans.
As to each Mortgage Loan, the Company hereby represents and
warrants to the Purchaser that as of the Closing Date:
(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 have
been made and credited. No payment required under the Mortgage Loan is
delinquent more than 30 days nor has any payment under the Mortgage Loan been
delinquent for 30 days or more in the 12 months preceding the Closing Date. 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 Mortgages, 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 Company 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 greater, 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,
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.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related PMI Policy and the title insurer, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the issuer of any related
PMI Policy and 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 and the terms of which are reflected in the Mortgage Loan Schedule;
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(e) No Defenses. The Mortgage Loan is not subject to any 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 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 customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Section 4.10. If upon origination of the Mortgage Loan, the Mortgaged Property
was in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Flood Insurance Administration is in effect
which policy conforms to the requirements of Section 4.10. All individual
insurance policies contain a standard mortgagee clause naming the Company 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 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 Company has not engaged in, and has no
knowledge of the Mortgagor'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 either, 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 Company;
(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 or disclosure laws applicable to the Mortgage Loan have
been complied with, 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;
- 17 -
(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 Company 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
Company waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a parcel 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, provided, however, that any
condominium project or planned unit development shall conform with the Company's
underwriting guidelines, and no residence or dwelling is a mobile home or a
manufactured dwelling. No Mortgaged Property is used principally for commercial
purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first lien on the Mortgaged Property, including all
buildings 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. 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 mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and (i) referred to or
to otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (ii) which do not adversely affect the Appraised Value
of the Mortgaged Property set forth in such appraisal; and
(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.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein and the Company has full right to sell and assign
the same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secured debt or other security instrument creating a lien subordinate to the
lien of the Mortgage;
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(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage have been duly and properly executed by such parties. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No fraud was committed in connection with
the origination of the Mortgage Loan. The Company 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. The Company is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Company has good and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan therein 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;
(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) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;
(o) LTV, PMI Policy. No Mortgage Loan has a LTV greater than
95%. The original LTV of the Mortgage Loan either was not more than 80% or the
excess over 75% is and will be insured as to payment defaults by a PMI Policy
until the LTV of such Mortgage Loan is reduced to 80%. All provisions of such
PMI Policy have been and are being complied with, such policy is in full force
and effect, and all premiums due thereunder have been paid. No action, inaction,
or event has occurred and no state of facts exists that has, or will result in
the exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject
to a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy
and to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the Mortgage Loan Schedule
is net of any such insurance premium;
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(p) Title Insurance. The Mortgage Loan is covered by either an
ALTA lender's title insurance policy or other generally acceptable form of
policy of insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, 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 Company,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, and against any loss by reason
of the invalidity or unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment in the Mortgage Interest Rate and
Monthly Payment, subject only to the exceptions contained in clauses (1), (2)
and (3) of paragraph (j) of this Section 3.02. 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
Company is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is 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 Mortgage, including the Company, 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
Company;
(q) No Defaults. There is no default, breach, violation or
event of 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 of
acceleration, and neither the Company nor its predecessors have waived any
default, breach, violation or event of acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the 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. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution or licensed mortgage broker or lender which is
supervised and examined by a Federal or State authority. The Mortgage Interest
Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus
the Gross Margin, rounded up or down to the nearest 0.125%, subject to the
Periodic Rate Cap and the Lifetime Rate Cap. The Mortgage Note is payable each
month in equal monthly installments of principal and interest, which
installments of interest 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. The Mortgage Loan does not provide for
negative amortization;
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(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;
(v) Conformance with Underwriting Guidelines. The Mortgage
Loan was underwritten in accordance with the Company's underwriting guidelines
under its "Full/ALT" documentation program in effect at the time the Mortgage
Loan was originated, a copy of which underwriting guidelines are attached as
Exhibit H hereto. The Mortgage Note and Mortgage are on forms acceptable to
Xxxxxxx Mac or Xxxxxx Mae;
(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. The Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor's primary residence;
(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 (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a
deed of trust, a trustee, 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 Purchasers
to the trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(z) Acceptable Investment. The Company has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;
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(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered for the Mortgage Loan by the Company under this Agreement as set forth
in Exhibit C attached hereto have been delivered to the Custodian. The Company
is in possession of a complete, true and accurate Mortgage File in compliance
with Exhibit B, except for such documents the originals of which have been
delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Xxxxxx Xxx eligibility requirements for sale to Xxxxxx Mae or is
located in a condominium or planned unit development project which has received
Xxxxxx Xxx project approval and the representations and warranties required by
Xxxxxx Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located so long as it is
accurately completed;
(dd) Due on Sale. The Mortgage contains an enforceable
provision 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 Mortgage thereunder;
(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 Company, 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 currently in effect 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 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 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. There is no proceeding
pending or, to the best of the Company'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;
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(hh) Collection Practices; Escrow Deposits; ARM Adjustments.
The origination and collection practices used with respect to the Mortgage Loan
have been in accordance with Accepted Servicing Practices and in all respects in
compliance with all applicable laws and regulations. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of the
Company and, as of the latest analysis date, there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law. An escrow of funds is not prohibited by applicable law
and has been established and maintained in accordance with RESPA. No escrow
deposits or Escrow Payments or other charges or payments due the Company have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;
(ii) Appraisal. The Mortgage File contains an appraisal of the
related Mortgage Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser;
(jj) Soldiers' and Sailors' Relief Act. The Mortgagor has not
notified the Company, and the Company has no knowledge of any relief requested
or allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(kk) Environmental Matters. 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 any Mortgaged Property of which
the Company is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Company's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;
(ll) Conversion to Fixed Interest Rate. The Mortgage Loan does
not contain a provision permitting or requiring conversion to a fixed interest
rate Mortgage Loan;
(mm) No Construction Loans. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;
(nn) No Denial of Insurance. No action, inaction, or event has
occurred and no state of exists or has existed that has resulted or will result
in the exclusion from, denial of, or defense to coverage under any applicable
pool insurance policy, special hazard insurance policy, PMI 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 Company or any designee of the Company or
any corporation in which the Company or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
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(oo) Mortgagor Acknowledgment. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Company shall maintain such statement in the Mortgage File;
and
(pp) 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.
(qq) Xxxxxx Act. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;
(rr) Texas Home Equity Loans. No Mortgage Loan constitutes a
Texas Home Equity Loan;
(ss) Simple Interest Mortgage Loans. None of the Mortgage
Loans are simple interest Mortgage Loans.
(tt) Single Premium Credit Life Insurance. None of the
proceeds of the Mortgage Loan were used to finance single-premium credit life
insurance policies.
(uu) Tax Service Contract The Company has obtained a life of
loan, transferable real estate Tax Service Contract with an Approved Tax Service
Contract Provider on each Mortgage Loan. Such Tax Service Contract contains
complete and accurate information with respect to the related Mortgage Loan and
Mortgaged Property. In the event that, upon the occurrence of an Event of
Default, the Purchaser assigns the Tax Servicing Contract with respect to any
Mortgage Loan, the Company shall pay any penalty, premium or cost with respect
to such assignment.
(vv) Flood Certification Contract. The Company has obtained a
life of loan, transferable flood certification contract for each Mortgage Loan.
In the event that, upon the occurrence of an Event of Default, the Purchaser
assigns the flood certification contract with respect to any Mortgage Loan, the
Company shall pay any penalty, premium or cost with respect to such assignment.
(ww) 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 recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Company, or is in the process of being recorded.
(xx) Prepayment Fee. No Mortgage Loan provides for a
prepayment penalty;
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(yy) Predatory Lending Regulations; High Cost Loans. None of
the Mortgage Loans are classified as "high cost" loans under the Home Ownership
and Equity Protection Act of 1994.
Section 3.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.02 shall survive the sale of the
Mortgage Loans to the Purchaser and the delivery of the Mortgage Loan Documents
to the Custodian 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 Company or the Purchaser of a breach of any
of the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser, or
which materially and adversely affects the interests of Purchaser in the related
Mortgage Loan in the case of a representation and warranty relating to a
particular Mortgage Loan (in the case of any of the foregoing, a "Breach"), 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 Company of any Breach of a representation or warranty, the Company shall
use its best efforts promptly to cure such Breach in all material respects and,
if such Breach cannot be cured, the Company shall, at the Purchaser's option and
subject to Section 3.04, repurchase such Mortgage Loan at the Repurchase Price.
In the event that a Breach shall involve any representation or warranty set
forth in Section 3.01, and such Breach cannot be cured within 60 days of the
earlier of either discovery by or notice to the Company of such Breach, all of
the Mortgage Loans shall, at the Purchaser's option and subject to Section 3.04,
be repurchased by the Company at the Repurchase Price. However, if the Breach
shall involve a representation or warranty set forth in Section 3.02 and the
Company discovers or receives notice of any such Breach within 120 days of the
Closing Date, the Company shall, at the Purchaser's option and provided that the
Company 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 Company 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 Section 3.03
shall be accomplished by deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to Purchaser on the next scheduled Remittance
Date, after deducting therefrom any amount received in respect of such
repurchased Mortgage Loan or Loans and being held in the Custodial Account for
future distribution.
At the time of repurchase, the Purchaser and the Company shall
arrange for the reassignment of the Deleted Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to the
Deleted Mortgage Loan. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the Deleted Mortgage Loan from this Agreement.
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In addition to such repurchase obligation, the Company shall
indemnify the Purchaser 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 Company representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 3.03 constitute the sole
remedies of the Purchaser respecting a Breach of the foregoing representations
and warranties.
Any cause of action against the Company relating to or arising
out of the Breach of any representations and warranties made in Sections 3.01
and 3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such Breach
by the Purchaser or notice thereof by the Company to the Purchaser, (ii)
failures by the Company to cure such Breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
Section 3.04 Restrictions and Requirements Applicable in the
Event that a Mortgage Loan is Acquired by a
REMIC.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, the following
provisions shall be applicable to such Mortgage Loan:
(A) Repurchase of Mortgage Loans.
With respect to any Mortgage Loan that is not in default or as
to which no default is imminent, no repurchase or substitution pursuant to
Subsection 3.03 ,3.05, 3.06 or 7.02 shall be made, unless, if so required by the
applicable REMIC Documents the Company has obtained an Opinion of Counsel to the
effect that such repurchase will not (i) result in the imposition of taxes on
"prohibited transactions" of such REMIC (as defined in Section 860F of the Code)
or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to
qualify as a REMIC at any time.
(B) General Servicing Obligations.
The Company shall sell any REO Property within two years after
its acquisition by the REMIC unless (i) the Company applies for an extension of
such two-year 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 Company obtains for the
Purchaser an Opinion of Counsel, addressed to the Purchaser and the Company, to
the effect that the holding by the REMIC of such REO Property subsequent to such
two year period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause the REMIC to fail
to qualify as a REMIC under the REMIC Provisions or comparable provisions of
relevant state laws at any time. The Company shall manage, conserve, protect and
operate each REO Property for the Purchaser solely for the purpose of its prompt
disposition and sale in a manner which does not cause such REO Property to fail
- 26 -
to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) or
result in the receipt by the 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 Company shall
either itself or through an agent selected by the Company 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 Purchaser, rent the same, or
any part thereof, as the Company deems to be in the best interest of the Company
and the Purchaser 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.
(C) Additional Covenants.
In addition to the provision set forth in this Section 3.04,
if a REMIC election is made with respect to the arrangement under which any of
the Mortgage Loans or REO Properties are held, then, with respect to such
Mortgage Loans and/or REO Properties, and notwithstanding the terms of this
Agreement, the Company shall not take any action, cause the REMIC to take any
action or fail to take (or fail to cause to be taken) any action that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of the REMIC as a REMIC or (ii) result in the imposition of a tax
upon the REMIC (including but not limited to the tax on "prohibited
transactions" as defined in Section 860F(a)(2) of the Code and the tax on
"contributions" to a REMIC set forth in Section 860G(d) of the Code) unless the
Company has received an Opinion of Counsel (at the expense of the party seeking
to take such action) to the effect that the contemplated action will not
endanger such REMIC status or result in the imposition of any such tax.
Section 3.05 First Payment Default.
With respect to any Mortgage Loan, if the first Monthly
Payment due after the Closing Date is not made within 30 days of its Due Date,
the Company shall, upon receipt of notice from the Purchaser, promptly
repurchase such Mortgage Loan from the Purchaser in accordance with Section 3.03
hereof; provided, that no right to cure set forth therein shall apply to this
section 3.05.
Section 3.06 Review of Mortgage Loans.
From the related Closing Date until the date 30 days after the
related Closing Date, the Purchaser shall have the right to review the Mortgage
Files and obtain BPOs on the Mortgaged Properties relating to the Mortgage Loans
purchased on the related Closing Date, with the results of such BPO reviews to
be communicated to the Company for a period up to 30 days after the related
Closing Date. 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 Company's Underwriting Guidelines, (ii) the value of the Mortgaged Property
pursuant to any BPO varies by more than plus or minus 15% from the original
Appraised Value of the Mortgaged Property, (iii) was underwritten without
verification of the Mortgagor's income and assets and there is no credit report
or credit score or (iv) after giving due consideration to all characteristics of
the Mortgage Loan and the Mortgagor's credit history, the Purchaser deems to be
- 27 -
an unacceptable credit risk. In the event that the Purchaser so rejects any
Mortgage Loan, the Company shall repurchase the rejected Mortgage Loan at the
Repurchase Price in the manner prescribed in Section 3.03 upon receipt of notice
from the Purchaser of the rejection of such Mortgage Loan. Any rejected Mortgage
Loan shall be removed from the terms of this Agreement. The Company shall make
available all files required by Purchaser in order to complete its review,
including all CRA/HMDA required data fields. Any review performed by the
Purchaser prior to the Closing Date does not limit the Purchaser's rights or the
Company's obligations under this section. To the extent that during the course
of the Purchaser's review pursuant to this paragraph, the Purchaser discovers
that the Mortgage Loans do not meet the Company's Underwriting Guidelines or the
terms of the purchase transaction, the Company agrees that the Purchaser may
carry out additional due diligence, the expenses of which shall be paid by the
Company. Purchaser's decision to perform increased due diligence or obtain
additional BPO's or property evaluations shall be at the Purchaser's sole
discretion.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and
administer the Mortgage Loans and shall have full power and authority, acting
alone, to do any and all things in connection with such servicing and
administration which the Company may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Company may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Company's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchasers, provided, however, that the Company shall
not make any future advances with respect to a Mortgage Loan and (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Company, imminent and the Company has obtained the prior
written consent of the Purchaser) the Company shall not permit any modification
of any material term of any Mortgage Loan including any modifications that would
change the Mortgage Interest Rate, defer or forgive the payment of principal or
interest, reduce or increase the outstanding principal balance (except for
actual payments of principal) or change the final maturity date on such Mortgage
Loan. In the event of any such modification which permits the deferral of
interest or principal payments on any Mortgage Loan, the Company shall, on the
Business Day immediately preceding the Remittance Date in any month in which any
such principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
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on behalf of itself and the Purchasers, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser shall
furnish the Company with any powers of attorney and other documents necessary or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company
shall employ procedures (including collection procedures) and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and
not postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy. In the
event that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of 90 days or any other default
continues for a period of 90 days beyond the expiration of any grace or cure
period, the Company shall commence foreclosure proceedings, it deems shall be in
the best interest of the Purchaser. In the event the Purchaser objects to such
foreclosure action, the Company shall not be required to make Monthly Advances
with respect to such Mortgage Loan, pursuant to Section 5.03, and the Company's
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Company shall from its own funds make
all necessary and proper Servicing Advances, provided, however, that the Company
shall not be required to expend its own funds in connection with any foreclosure
or towards the restoration or preservation of any Mortgaged Property, unless it
shall determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
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 Company has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property to be conducted by a qualified inspector. Upon completion of the
inspection, the Company shall promptly provide the Purchaser with a written
report of the environmental inspection.
- 29 -
After reviewing the environmental inspection report, the
Purchaser shall determine how the Company 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 Purchaser directs the Company to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company 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 Company, the
Company shall be entitled to be reimbursed from amounts in the Custodial Account
pursuant to Section 4.05 hereof. In the event the Purchaser directs the Company
not to proceed with foreclosure or acceptance of a deed in lieu of foreclosure,
the Company shall be reimbursed for all Servicing Advances made with respect to
the related Mortgaged Property from the Custodial Account pursuant to Section
4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and
interest on all Mortgage Loans are paid in full, the Company shall proceed
diligently to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable and shall take special care in ascertaining
and estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial
Account.
The Company shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "ABN AMRO
Mortgage Group, Inc. in trust for the Purchaser of Conventional Residential
Adjustable Rate Mortgage Loans, Group No. 2002-1 and various Mortgagors". The
Custodial Account shall be established with a Qualified Depository acceptable to
the Purchaser. Any funds deposited in the Custodial Account shall at all times
be fully insured to the full extent permitted under applicable law. Funds
deposited in the Custodial Account may be drawn on by the Company in accordance
with Section 4.05. The creation of any Custodial Account shall be evidenced by a
certification in the form of Exhibit D-1 hereto, in the case of an account
established with the Company, or by a letter agreement in the form of Exhibit
D-2 hereto, in the case of an account held by a depository other than the
Company. A copy of such certification or letter agreement shall be furnished to
the Purchaser and, upon request, to any subsequent Purchaser.
- 30 -
The Company shall deposit in the Custodial Account on a daily
basis, and retain therein, the following collections received by the Company and
payments made by the Company after the Cut-off Date, other than payments of
principal and interest due on or before the Cut-off Date, or received by the
Company prior to the Cut-off Date but allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage
Loans, including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.10 (other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 4.01, 4.09, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of
any Mortgage Loan pursuant to Section 3.03, 3.05 or 3.06 and all
amounts required to be deposited by the Company in connection with a
shortfall in principal amount of any Qualified Substitute Mortgage Loan
pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month
of distribution. Such deposit shall be made from the Company's own
funds, without reimbursement therefor;
(ix) any amounts required to be deposited by the Company
pursuant to Section 4.11 in connection with the deductible clause in
any blanket hazard insurance policy; and
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 4.16.
The foregoing requirements for deposit into the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late payment
charges and assumption fees, to the extent permitted by Section 6.01, need not
be deposited by the Company into the Custodial Account. Any interest paid on
funds deposited in the Custodial Account by the depository institution shall
accrue to the benefit of the Company and the Company shall be entitled to retain
and withdraw such interest from the Custodial Account pursuant to Section 4.05.
- 31 -
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in
the manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's
funds made pursuant to Section 5.03, the Company's right to reimburse
itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late payments of
principal and/or interest respecting which any such advance was made,
it being understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser,
except that, where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03, 3.05, 3.06 or 6.02, the Company's right
to such reimbursement shall be subsequent to the payment to the
Purchasers of the Repurchase Price pursuant to such sections and all
other amounts required to be paid to the Purchasers with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances,
and for any unpaid Servicing Fees, the Company's right to reimburse
itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected
by the Company from the Mortgagor or otherwise relating to the Mortgage
Loan, it being understood that, in the case of any such reimbursement,
the Company's right thereto shall be prior to the rights of Purchaser
except where the Company is required to repurchase a Mortgage Loan
pursuant to Section 3.03, 3.05, 3.06 or 6.02, in which case the
Company's right to such reimbursement shall be subsequent to the
payment to the Purchasers of the Repurchase Price pursuant to such
sections and all other amounts required to be paid to the Purchasers
with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the
Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable
to it pursuant to Section 9.01;
(vi) to pay any amount required to be paid pursuant to Section
4.16 related to any REO Property, it being understood that in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
- 32 -
In the event that the Custodial Account is interest bearing,
on each Remittance Date, the Company shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Company is
not obligated to remit on such Remittance Date. The Company may use such
withdrawn funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, "ABN AMRO Mortgage Group, Inc., in trust for the Purchaser of
Conventional Residential Adjustable Rate Mortgage Loans, Group No. 2002-1, and
various Mortgagors". The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the Company
in accordance with Section 4.07. The creation of any Escrow Account shall be
evidenced by a certification in the form of Exhibit E-1 hereto, in the case of
an account established with the Company, or by a letter agreement in the form of
Exhibit E-2 hereto, in the case of an account held by a depository other than
the Company. A copy of such certification shall be furnished to the Purchaser
and, upon request, to any subsequent Purchaser.
The Company shall deposit in the Escrow Account or Accounts on
a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Company shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, as set forth
in Section 4.07. The Company shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by
the Company only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
- 33 -
(ii) to reimburse the Company for any Servicing Advances made
by the Company pursuant to Section 4.08 with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage
Loan which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in
excess of the amounts required under the terms of the related Mortgage
Loan;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with
the terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and other charges which are or may become a lien upon
the Mortgaged Property and the status of PMI Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date, employing for such
purpose deposits of the Mortgagor in the Escrow Account which shall have been
estimated and accumulated by the Company in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage. To the extent that a
Mortgage does not provide for Escrow Payments, the Company shall determine that
any such payments are made by the Mortgagor at the time they first become due.
The Company assumes full responsibility for the timely payment of all such bills
and shall effect timely payment of all such charges irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments, and the Company shall make advances from its own funds to
effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow
Account to a different Qualified Depository from time to time. Such transfer
shall be made only upon obtaining the consent of the Purchaser, which consent
shall not be withheld unreasonably.
- 34 -
The Company shall bear any expenses, losses or damages
sustained by the Purchaser because the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow
Account may at the option of the Company be invested in Eligible Investments;
provided that in the event that amounts on deposit in the Custodial Account or
the Escrow Account exceed the amount fully insured by the FDIC (the "Insured
Amount") the Company shall be obligated to invest the excess amount over the
Insured Amount in Eligible Investments on the same Business Day as such excess
amount becomes present in the Custodial Account or the Escrow Account. Any such
Eligible Investment shall mature no later than the Determination Date next
following the date of such Eligible Investment, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Company) that maintains the Custodial Account or the Escrow Account, then such
Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Company in trust for the benefit of
the Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Company and may be withdrawn at any time by the
Company. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Company out of
its own funds immediately as realized.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage
Loan hazard insurance such that all buildings upon the Mortgaged Property are
insured by a generally acceptable insurer rated A:VI or better in the current
Best's Key Rating Guide ("Best's") against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, in an amount which is at least equal to the lesser of (i)
the replacement 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 upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier rated A:VI or better
in Best's in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with applicable
law and pursuant to the Xxxxxx Xxx Guides that a Mortgaged Property is located
in a special flood hazard area and is not covered by flood insurance or is
covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Company shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within
forty-five (45) days after such notification, the Company shall immediately
force place the required flood insurance on the Mortgagor's behalf.
- 35 -
If a Mortgage is secured by a unit in a condominium project,
the Company shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current Xxxxxx Xxx requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
The Company shall cause to be maintained on each Mortgaged
Property earthquake or such other or additional insurance as may be required
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required to
conform with Accepted Servicing Practices.
In the event that any Purchaser or the Company shall determine
that the Mortgaged Property should be insured against loss or damage by hazards
and risks not covered by the insurance required to be maintained by the
Mortgagor pursuant to the terms of the Mortgage, the Company shall communicate
and consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the desirability of protection of the
Mortgaged Property.
All policies required hereunder shall name the Company as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom
of choice in selecting either his insurance carrier or agent, provided, however,
that the Company shall not accept any such insurance policies from insurance
companies unless such companies are rated A:VI or better in Best's and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address. The Company shall furnish to the
Mortgagor a formal notice of expiration of any such insurance in sufficient time
for the Mortgagor to arrange for renewal coverage by the expiration date.
Pursuant to Section 4.04, any amounts collected by the Company
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Company's normal servicing
procedures as specified in Section 4.14) shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 4.05.
- 36 -
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a
blanket policy insuring against losses arising from fire and hazards covered
under extended coverage on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section 4.10,
it shall conclusively be deemed to have satisfied its obligations as set forth
in Section 4.10. Any amounts collected by the Company under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to deposited from the Company's funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Company shall maintain with responsible companies, at its
own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans ("Company Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall be in the form of the
Mortgage Banker's Blanket Bond and shall protect and insure the Company against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 4.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by Xxxxxx Mae in the Xxxxxx Xxx Mortgage-Backed Securities
Selling and Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx Xxx Xxxxxxx' &
Servicers' Guide. Upon the request of any Purchaser, the Company shall cause to
be delivered to such Purchaser a certified true copy of such fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond and insurance policy shall in no event be terminated or materially
modified without 30 days' prior written notice to the Purchaser.
Section 4.13 Inspections.
The Company shall inspect the Mortgaged Property as often as
deemed necessary by the Company to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 60
days delinquent, the Company immediately shall inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
Company shall keep a written report of each such inspection.
- 37 -
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser
prior to releasing any Insurance Proceeds or Condemnation Proceeds to the
Mortgagor to be applied to the restoration or repair of the Mortgaged Property
if such release is in accordance with Accepted Servicing Practices. At a
minimum, the Company shall comply with the following conditions in connection
with any such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Company shall take all steps necessary to preserve
the priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not
in default; and
(iv) pending repairs or restoration, the Company shall place
the Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the
Company is hereby empowered to endorse any loss draft issued in respect of such
a claim in the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
With respect to each Mortgage Loan with a LTV in excess of
80%, the Company shall, without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a PMI Policy insuring that
portion of the Mortgage Loan in excess of 75% of value, and shall pay or shall
cause the Mortgagor to pay the premium thereon on a timely basis, until the LTV
of such Mortgage Loan is reduced to 80%. In the event that such PMI Policy shall
be terminated, the Company shall obtain from another Qualified Insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy. If the insurer shall cease to be a
Qualified Insurer, the Company shall determine whether recoveries under the PMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Company shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy for
such reason. If the Company determines that recoveries are so jeopardized, it
shall notify the Purchaser and the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. The Company shall not
take any action which would result in noncoverage under any applicable PMI
Policy of any loss which, but for the actions of the Company would have been
covered thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 6.01, the Company shall
promptly notify the insurer under the related PMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such PMI
Policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under such PMI Policy. If such PMI
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement PMI Policy as provided above.
- 38 -
In connection with its activities as servicer, the Company
agrees to prepare and present, on behalf of itself and the Purchaser, claims to
the insurer under any PMI Policy in a timely fashion in accordance with the
terms of such PMI Policy and, in this regard, to take such action as shall be
necessary to permit recovery under any PMI Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Company
under any PMI Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.
Section 4.16 Title, Management and Disposition of REO
Property.
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be taken in the name of the Purchaser, or in the event the Purchaser
is not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Company shall manage, conserve, protect and operate each
REO Property for the Purchaser solely for the purpose of its prompt disposition
and sale. The Company, either itself or through an agent selected by the
Company, 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 Company 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 Company deems to be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless (i) (A)
a REMIC election has not been made with respect to the arrangement under which
the Mortgage Loans and the REO Property are held, and (ii) the Company
determines, and gives an appropriate notice to the Purchaser 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, (i) the Company shall report
monthly to the Purchaser as to the progress being made in selling such REO
Property and (ii) if, with the written consent of the Purchaser, a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Company as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Company and Purchaser shall be entered into
with respect to such purchase money mortgage.
- 39 -
The Company shall also maintain on each REO Property fire and
hazard insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the
Company at such price, and upon such terms and conditions, as the Company deems
to be in the best interests of the Purchaser. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. As soon as
practical thereafter the expenses of such sale shall be paid and the Company
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03, and on
the Remittance Date immediately following the Principal Prepayment Period in
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw the Custodial Account funds
necessary for the proper operation, management and maintenance of the REO
Property, including the cost of maintaining any hazard insurance pursuant to
Section 4.10 and the fees of any managing agent of the Company, or the Company
itself. The REO management fee shall be an amount that is reasonable and
customary in the area where the Mortgaged Property is located. The Company shall
make monthly distributions on each Remittance Date to the Purchasers of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Notwithstanding the foregoing, at any time and from time to
time, the Purchaser may at its election terminate this Agreement with respect to
one or more REO Properties as provided by Section 11.02.
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section
5.02, the Company shall furnish to the Purchaser on or before the Remittance
Date each month a statement with respect to any REO Property covering the
operation of such REO Property for the previous month and the Company's efforts
in connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Purchaser shall reasonably
request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of foreclosure,
the Company shall submit to the Purchaser a liquidation report with respect to
such Mortgaged Property.
- 40 -
Section 4.19 Notification of Adjustments.
With respect to each Mortgage Loan, the Company shall adjust
the Mortgage Interest Rate on the related Interest Rate Adjustment Date in
compliance with the requirements of applicable law and the related Mortgage and
Mortgage Note. The Company 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 adjustments. The Company shall
promptly, upon written request therefor, deliver to the Purchaser 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 Company or the receipt of notice from the Purchaser that the Company has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the Company shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Purchaser thereby.
Section 4.20 Reports of Foreclosures and Abandonments of
Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Company shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code.
Section 4.21 Appointment and Designation of Master Servicer.
The Purchaser hereby appoints and designates Aurora Loan
Services, Inc. as its master servicer (the "Master Servicer") for the Mortgage
Loans subject to this Agreement. The Company is hereby authorized and instructed
to take any and all instructions with respect to servicing the Mortgage Loans
hereunder as if the Master Servicer were the Purchaser hereunder. The
authorization and instruction set forth herein shall remain in effect until such
time as the Company shall receive written instruction from the Purchaser that
such authorization and instruction is terminated.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire
transfer of immediately available funds to the Purchaser (a) all amounts
deposited in the Custodial Account as of the close of business on the
Determination Date (net of charges against or withdrawals from the Custodial
Account pursuant to Section 4.05), plus (b) all amounts, if any, which the
Company is obligated to distribute pursuant to Section 5.03, minus (c) any
amounts attributable to Principal Prepayments received after the applicable
Principal Prepayment Period which amounts shall be remitted on the following
Remittance Date, together with any additional interest required to be deposited
in the Custodial Account in connection with such Principal Prepayment in
accordance with Section 4.04(viii), and minus (d) any amounts attributable to
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Monthly Payments collected but due on a Due Date or Dates subsequent to the
first day of the month of the Remittance Date, which amounts shall be remitted
on the Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after
the second Business Day following the Business Day on which such payment was
due, the Company shall pay to the Purchaser interest on any such late payment at
an annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the Remittance Date, the Company shall furnish
to the Purchaser a Monthly Remittance Advice, with a trial balance report
attached thereto, in the form of Exhibit F annexed hereto in hard copy and
electronic medium mutually acceptable to the parties as to the preceding
remittance and the period ending on the preceding Determination Date. All
monthly reports shall be generated pursuant to an `Alltel' servicing system.
In addition, not more than 60 days after the end of each
calendar year, the Company shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Such obligation of the Company shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Company pursuant to any requirements of the Internal Revenue
Code as from time to time are in force.
The Company shall prepare and file any and all tax returns,
information statements or other filings required to be delivered to any
governmental taxing authority or to any Purchaser pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Company shall provide each Purchaser with such information
concerning the Mortgage Loans as is necessary for such Purchaser to prepare its
federal income tax return as any Purchaser may reasonably request from time to
time.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance
Date, the Company shall deposit in the Custodial Account from its own funds an
amount equal to all Monthly Payments (with interest adjusted to the Mortgage
Loan Remittance Rate) which were due on the Mortgage Loans during the applicable
Due Period and which were delinquent at the close of business on the immediately
preceding Determination Date or which were deferred pursuant to Section 4.01.
The Company's obligation to make such Monthly Advances as to any Mortgage Loan
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will continue through the earliest of (a) the last Monthly Payment due prior to
the payment in full of the Mortgage Loan, or (b) the last Remittance Date prior
to the Remittance Date for the distribution of all Liquidation Proceeds and
other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan or (c) the date on which the Company
demonstrates to the Purchaser that any such Monthly Advances shall be
non-recoverable.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any
"due-on-sale" provision contained in any Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about to
be sold whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Company shall enter
into (i) an assumption and modification agreement with the person to whom such
property has been conveyed, pursuant to which such person becomes liable under
the Mortgage Note and the original Mortgagor remains liable thereon or (ii) in
the event the Company is unable under applicable law to require that the
original Mortgagor remain liable under the Mortgage Note and the Company has the
prior consent of the primary mortgage guaranty insurer, a substitution of
liability agreement with the purchaser of the Mortgaged Property pursuant to
which the original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. Assumption fees and any other ancillary fees collected by the
Company will be retained by the Company as additional servicing compensation. In
connection with any such assumption, neither the Mortgage Interest Rate borne by
the related Mortgage Note, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Company
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by Xxxxxx Mae with respect to underwriting mortgage
loans of the same type as the Mortgage Loans. If the credit of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
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Section 6.02 Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Company of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Company shall notify the Purchaser in
the Monthly Remittance Advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents. In connection with any such prepayment
in full, the Company shall comply with all applicable laws regarding
satisfaction, release or reconveyance with respect to the Mortgage.
If the Company satisfies or releases a Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage or
should the Company otherwise prejudice any rights the Purchaser may have under
the mortgage instruments, upon written demand of the Purchaser, the Company
shall repurchase the related Mortgage Loan at the Repurchase Price by deposit
thereof in the Custodial Account within 2 Business Days of receipt of such
demand by the Purchaser. The Company shall maintain the Fidelity Bond and Errors
and Omissions Insurance Policy as provided for in Section 4.12 insuring the
Company against any loss it may sustain with respect to any Mortgage Loan not
satisfied in accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall
be entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which
payment is in fact made of the entire amount of the Monthly Payment. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion of such Monthly Payments collected by the
Company.
Additional servicing compensation in the form of assumption
fees, to the extent provided in Section 6.01, and late payment charges shall be
retained by the Company to the extent not required to be deposited in the
Custodial Account. The Company shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
The Company shall deliver to the Purchaser, on or before March
31 each year beginning March 31, 2002, an Officer's Certificate, stating that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement has been made under such officer's
supervision, and (ii) the Company has complied fully with the provisions of
Article II and Article IV, and (iii) to the best of such officer's knowledge,
based on such review, the Company has fulfilled all 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
officer and the nature and status thereof and the action being taken by the
Company to cure such default.
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Section 6.05 Annual Independent Public Accountants'
Servicing Report.
On or before March 31st of each year beginning March 31, 2002,
the Company, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to each Purchaser to the effect that such
firm has examined certain documents and records relating to the servicing of the
Mortgage Loans and this Agreement and that such firm is of the opinion that the
provisions of Article II and Article IV have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Single Attestation Program for Mortgage Bankers, nothing has come to their
attention which would indicate that such servicing has not been conducted in
compliance therewith, except for (i) such exceptions as such firm shall believe
to be immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section 6.06 Right to Examine Company Records.
The Purchaser shall have the right to examine and audit any
and all of the books, records, or other information of the Company, whether held
by the Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance
notice.
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under
this Agreement Upon an Agency Transfer, or a
Pass-Through Transfer on One or More
Reconstitution Dates.
The Purchaser and the Company agree that with respect to some
or all of the Mortgage Loans, from time to time the Purchaser shall:
(1) Effect an Agency Transfer, and/or
(2) Effect a Pass-Through Transfer,
in each case retaining the Company as the servicer thereof, or as applicable the
"seller/servicer". On the related Reconstitution Date, the Mortgage Loans
transferred shall cease to be covered by this Agreement.
The Company shall cooperate with the Purchaser in connection
with any Agency Transfer or Pass-Through Transfer contemplated by the Purchaser
pursuant to this Section 7.01; provided that Company shall service for no more
than four transferees of the Purchaser at any one time. In that connection, the
Company shall (a) execute any Reconstitution Agreement within a reasonable
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period of time after receipt of any Reconstitution Agreement which time shall be
sufficient for the Company and Company's counsel to review such Reconstitution
Agreement, but such time shall not exceed ten (10) Business Days after such
receipt, and (b) provide to Xxxxxx Xxx, Xxxxxxx Mac, the trustee or a third
party purchaser, as the case may be, subject to any Reconstitution Agreement
and/or the Purchaser: (i) any and all information and appropriate verification
of information which may be reasonably available to the Company, whether through
letters of its auditors and counsel or otherwise, as the Purchaser shall
reasonably request; (ii) such additional opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Company as are
reasonably believed necessary by Xxxxxx Mae, Xxxxxxx Mac, the trustee, such
third party purchaser, any master servicer, any rating agency or the Purchaser,
as the case may be, in connection with such transactions and (iii) bring each of
the Mortgage Loan representations and warranties set forth in the Agreement
current as of the date the Mortgage Loans are being transferred pursuant to an
Agency Transfer or Pass-Through Transfer, provided, that if the date of such
Agency Transfer or Pass-Through Transfer is later than March 29, 2002, Seller
shall only be required to bring current the representations and warranties set
forth in Section 3.01(a), (b), (c), (d), (f), (g), (h) and (k). Notwithstanding
the foregoing, Seller shall, at the time of reconstitution, be entitled to state
certain exception to the Mortgage Loan representations and warranties necessary
to make same true and correct as of the time of the Pass-Through Transfer.
In the event the Purchaser has elected to have the Company
hold record title to the Mortgages, prior to a Reconstitution Date the Company
or its designee shall prepare an Assignment of Mortgage in blank from the
Company , acceptable to Xxxxxx Mae, Xxxxxxx Mac, the trustee or such third
party, as the case may be, for each Mortgage Loan that is part of an Agency
Transfer, or Pass-Through Transfer and shall pay all preparation and recording
costs associated therewith. The Company shall execute each Assignment of
Mortgage, track such Assignments of Mortgage to ensure they have been recorded
and deliver them as required by Xxxxxx Mae, Xxxxxxx Mac, the trustee or such
third party, as the case may be, upon the Company's receipt thereof.
Additionally, the Company shall prepare and execute, at the direction of the
Purchaser, any note endorsements in connection with any and all Reconstitution
Agreements.
All Mortgage Loans not sold or transferred pursuant to an
Agency Transfer or Pass-Through Transfer and any Mortgage Loans repurchased by
the Purchaser pursuant to Section 7.02 hereof, shall be subject to this
Agreement and shall continue to be serviced in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full force and
effect.
Section 7.02 Purchaser's Repurchase and Indemnification
Obligations.
Upon receipt by the Company of notice from Xxxxxx Mae, Xxxxxxx
Mac or the trustee of a breach of any Purchaser representation or warranty
contained in any Reconstitution Agreement or a request by Xxxxxx Mae, Xxxxxxx
Mac or the trustee, as the case may be, for the repurchase of any Mortgage Loan
transferred to Xxxxxx Mae or Xxxxxxx Mac pursuant to an Agency Transfer or to a
trustee pursuant to a Pass-Through Transfer, the Company shall promptly notify
the Purchaser of same and shall, at the direction of the Purchaser, use its best
efforts to cure and correct any such breach and to satisfy the requests or
concerns of Xxxxxx Mae, Xxxxxxx Mac, or the trustee related to such deficiencies
of the related Mortgage Loans transferred to Xxxxxx Mae, Xxxxxxx Mac, or the
trustee.
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The Purchaser shall repurchase from the Company any Mortgage
Loan transferred to Xxxxxx Mae or Xxxxxxx Mac pursuant to an Agency Transfer or
to a trustee pursuant to a Pass-Through Transfer with respect to which the
Company has been required by Xxxxxx Mae, Xxxxxxx Mac, or the trustee to
repurchase due to a breach of a representation or warranty made by the Purchaser
with respect to the Mortgage Loans, or the servicing thereof prior to the
transfer date to Xxxxxx Mae, Xxxxxxx Mac, or the trustee in any Reconstitution
Agreement and not due to a breach of the Company's representations or
obligations thereunder or pursuant to this Agreement. The repurchase price to be
paid by the Purchaser to the Company shall equal that repurchase price paid by
the Company to Xxxxxx Mae, Xxxxxxx Mac, or the third party purchaser plus all
reasonable costs and expenses borne by the Company in connection with the cure
of said breach of a representation or warranty made by the Purchaser and in
connection with the repurchase of such Mortgage Loan from Xxxxxx Mae, Xxxxxxx
Mac, or the trustee, including, but not limited to, reasonable and necessary
attorneys' fees.
At the time of repurchase, the Custodian and the Company shall
arrange for the reassignment of the repurchased Mortgage Loan to the Purchaser
according to the Purchaser's instructions and the delivery to the Custodian of
any documents held by Xxxxxx Mae, Xxxxxxx Mac, or the trustee with respect to
the repurchased Mortgage Loan pursuant to the related Reconstitution Agreement.
In the event of a repurchase, the Company shall, simultaneously with such
reassignment, give written notice to the Purchaser that such repurchase has
taken place, and amend the Mortgage Loan Schedule to reflect the addition of the
repurchased Mortgage Loan to this Agreement. In connection with any such
addition, the Company and the Purchaser shall be deemed to have made as to such
repurchased 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 repurchase.
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.
During the term of this Agreement, the Company shall furnish
to the Purchaser such periodic, special, or other reports or information and
copies or originals of any documents contained in the Servicing File for each
Mortgage Loan, whether or not provided for herein, as shall be necessary,
reasonable, or appropriate with respect to any regulatory requirement pertaining
to the Purchaser or the purposes of this Agreement. All such reports, documents
or information shall be provided by and in accordance with all reasonable
instructions and directions which the Purchaser may give.
The Company shall execute and deliver all such instruments and
take all such action as the Purchaser may reasonably request from time to time,
in order to effectuate the purposes and to carry out the terms of this
Agreement.
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Section 8.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser
may make available to a prospective Purchaser a Consolidated Statement of
Operations of ABN Parent for the most recently completed two fiscal years for
which such a statement is available, as well as a Consolidated Statement of
Condition at the end of the last two fiscal years covered by such Consolidated
Statement of Operations. The Company also shall make available any comparable
interim statements to the extent any such statements have been prepared by or on
behalf of ABN Parent (and are available upon request to members or stockholders
of the Company or to the public at large). If it has not already done so, the
Company shall furnish promptly to the Purchaser copies of the statement
specified above.
The Company also shall make available to Purchaser or
prospective Purchaser a knowledgeable financial or accounting officer for the
purpose of answering questions respecting recent developments affecting the
Company or the financial statements of the Company, and to permit any
prospective Purchaser to inspect the Company's servicing facilities for the
purpose of satisfying such prospective Purchaser that the Company has the
ability to service the Mortgage Loans as provided in this Agreement.
ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, and forfeitures,
including, but not limited to reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related to the failure of the Company to (a) perform its
duties and service the Mortgage Loans in strict compliance with the terms of
this Agreement or any Reconstitution Agreement entered into pursuant to Section
7.01, and/or (b) comply with applicable law. The Company 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, shall promptly
notify Xxxxxx Mae, Xxxxxxx Mac, or the trustee with respect to any claim made by
a third party with respect to any Reconstitution Agreement, 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 Company shall follow any written
instructions received from the Purchaser in connection with such claim. The
Purchaser promptly shall reimburse the Company for all amounts advanced by it
pursuant to the preceding sentence except when the claim is in any way related
to the Company's indemnification pursuant to Section 3.03, or the failure of the
Company to (a) service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement or any Reconstitution Agreement, and/or (b)
comply with applicable law.
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Section 9.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights
and franchises as a corporation, and shall 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 Company may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Company shall be a party, or any Person succeeding to
the business of the Company, shall be the successor of the Company 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 be an
institution having a net worth of not less than $25,000,000.
Section 9.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers,
employees or agents of the Company shall be under any liability to the Purchaser
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 Company or any such person against any
Breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Company and any
director, officer, employee or agent of the Company 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 Company shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Company may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the Company shall be entitled to reimbursement from the Purchaser of the
reasonable legal expenses and costs of such action.
Section 9.04 Limitation on Resignation and Assignment by
Company.
The Purchaser has entered into this Agreement with the Company
and subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Company shall neither assign this Agreement or the servicing
hereunder or delegate its rights or duties hereunder or any portion hereof or
sell or otherwise dispose of all or substantially all of its property or assets
without the prior written consent of the Purchaser, which consent shall be
granted or withheld in the sole discretion of the Purchaser.
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The Company shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Company and the Purchaser
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company. Any
such determination permitting the resignation of the Company shall be evidenced
by an Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section
9.04, in the event that the Company either shall assign this Agreement or the
servicing responsibilities hereunder or delegate its duties hereunder or any
portion thereof or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written consent of the Purchaser, then the
Purchaser shall have the right to terminate this Agreement upon notice given as
set forth in Section 10.01, without any payment of any penalty or damages and
without any liability whatsoever to the Company or any third party.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on
the part of the Company:
(i) any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this Agreement which
continues unremedied for a period of five days after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Company set forth in this Agreement which continues unremedied
for a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Company by the Purchaser; or
(iii) failure by the Company to maintain its license to do
business in any jurisdiction where the Mortgage Property is located; or
(iv) 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, readjustment of debt,
including bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Company and such decree or order shall
have remained in force undischarged or unstayed for a period of 60
days; or
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(v) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to the Company or of or relating to all or substantially
all of its property; or
(vi) the Company 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, bankruptcy or reorganization
statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations or cease its normal
business operations for three Business Days; or
(vii) the Company ceases to meet the qualifications of a
Xxxxxx Xxx lender; or
(viii) the Company fails to maintain a minimum net worth of
$25,000,000; or
(ix) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts, without the consent of
the Purchaser, to sell or otherwise dispose of all or substantially all
of its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereto in violation of Section 9.04.
In each and every such case, so long as an Event of Default
shall not have been remedied, in addition to whatsoever rights the Purchaser may
have at law or equity to damages, including injunctive relief and specific
performance, the Purchaser, by notice in writing to the Company, may terminate
all the rights and obligations of the Company under this Agreement and in and to
the Mortgage Loans and the proceeds thereof.
Upon receipt by the Company of such written notice, all
authority and power of the Company under this Agreement, whether with respect to
the Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 12.01. Upon written request from any Purchaser,
the Company shall prepare, execute and deliver to the successor entity
designated by the Purchaser any and all documents and other instruments, place
in such successor's possession all Mortgage Files, and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by
the Company in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
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ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of
the final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or the disposition of any REO Property with respect to
the last Mortgage Loan and the remittance of all funds due hereunder; or (ii)
mutual consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights
the Company may have hereunder, without cause, as provided in this Section
11.02. Any such notice of termination shall be in writing and delivered to the
Company by registered mail as provided in Section 12.05.
In the event the Purchaser terminates the Company without
cause with respect to some or all of the Mortgage Loans, the Purchaser shall be
required to pay to the Company a Termination Fee in an amount equal to 2.00% of
the outstanding principal balance of the terminated Mortgage Loans as of the
date of such termination.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and
duties under this Agreement pursuant to Sections 9.04, 10.01, 11.01 (ii) or
pursuant to Section 11.02 after the 90 day period has expired, the Purchaser
shall, (i) succeed to and assume all of the Company's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor having
the characteristics set forth in clauses (i) through (iii) of Section 9.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Company shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
- 52 -
of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Sections 3.03, 3.05 and 3.06, it being understood and agreed
that the provisions of such Sections 3.01, 3.02, 3.03, 3.05 and 3.06 shall be
applicable to the Company notwithstanding any such sale, assignment, resignation
or termination of the Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Company and to the Purchaser an instrument
accepting such appointment, wherein the successor shall make the representations
and warranties set forth in Section 3.01, except for subsections (f), (h), (i)
and (k) thereof, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Company or termination of this Agreement
pursuant to Section 9.04, 10.01, 11.01 or 11.02 shall not affect any claims that
any Purchaser may have against the Company arising out of the Company's actions
or failure to act prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer
the Funds in the Custodial Account and Escrow Account and all Mortgage Files and
related documents and statements held by it hereunder and the Company shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the
Company shall notify by mail the Purchaser of such appointment in accordance
with the procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by the Company
and the Purchaser by written agreement signed by the Company and the Purchaser.
Section 12.03 Governing Law.
This 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 such laws.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until
terminated as herein provided. This Agreement shall continue notwithstanding
transfers of the Mortgage Loans by the Purchaser.
- 53 -
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Company:
ABN AMRO Mortgage Group Inc.
0000 Xxxx Xxx Xxxxxx Xxxx
Xxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxxx
Fax: 000-000-0000
with copies to:
ABN AMRO Mortgage Group Inc.
Legal Department- M 0900380
0000 X. Xxx Xxxxxx Xxxx
Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
(ii) if to Purchaser:
Xxxxxx Brothers Bank, FSB
3 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Contract Finance
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be held invalid for any reason whatsoever, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to
create a partnership or joint venture between the parties hereto and the
services of the Company shall be rendered as an independent contractor and not
as agent for the Purchaser.
- 54 -
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.
Section 12.09 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 other 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.
The Purchaser shall indemnify the Company 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 an assignment of mortgage being improperly completed
with respect to the assignee's name, or completed in an untimely manner;
provided, that the Purchaser shall not indemnify the Company for any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from an
Assignment of Mortgage being improperly completed, improperly recorded, or
recorded in an untimely manner, where such resulted from the Company's having
provided incorrect information to the Purchaser with respect to the Assignment
of Mortgage.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the
Company but subject to the limit set forth in Section 2.02 hereof, to assign, in
whole or in part, its interest under this Agreement with respect to some or all
of the Mortgage Loans, and designate any person to exercise any rights of the
Purchaser hereunder, by executing an Assignment and Assumption Agreement
substantially in the form of Exhibit G hereto. Upon such assignment of rights
and assumption of obligations, the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such Mortgage
Loans and the Purchaser as assignor shall be released from all obligations
hereunder with respect to such Mortgage Loans from and after the date of such
assignment and assumption. All references to the Purchaser in this Agreement
shall be deemed to include its assignee or designee.
Section 12.11 No Personal Solicitation.
From and after the Closing Date, the Company shall not take
any action to solicit the refinancing of any Mortgage Loan or provide
information to any other entity to solicit the refinancing of any Mortgage Loan;
provided that, the foregoing shall not preclude such Company or any of its
affiliates from (a) engaging in general solicitations to its customer base,
- 55 -
including by mass mailing or as part of monthly or periodic statements mailed to
its borrowers or to holders of deposit or other accounts, (b) engaging in
solicitations to the general public, including without limitation by mass
mailing, newspaper, radio, television or other media which are not specifically
directed toward the Mortgagors or (c) refinancing the Mortgage Loan of any
Mortgagor who, without solicitation, contacts a Company to request the
refinancing of the related Mortgage Loan. From and after the Closing Date, the
Purchaser shall not take any action to solicit the refinancing of any Mortgage
Loan or provide information to any other entity to solicit the refinancing of
any Mortgage Loan.
IN WITNESS WHEREOF, the Company and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
XXXXXX BROTHERS BANK, FSB
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
ABN AMRO MORTGAGE GROUP, INC.
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
- 56 -
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the __ day of ________, 200_ before me, a Notary Public in
and for said State, personally appeared ________, known to me to be Vice
President of Xxxxxx Brothers Bank, FSB, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my
office seal the day and year in this certificate first above written.
___________________________________________
Notary Public
My Commission expires _____________________
STATE OF )
) ss.:
COUNTY OF )
On the __ day of _______, 200_ before me, a Notary Public in
and for said State, personally appeared __________, known to me to be
______________ of __________________, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my
office seal the day and year in this certificate first above written.
___________________________________________
Notary Public
My Commission expires _____________________
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[INTENTIONALLY OMITTED]
A-1
EXHIBIT B
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 retained by the
Company in the Servicing File or delivered to the Custodian pursuant to Section
2.01 and 2.03 of the Seller's Warranties and Servicing Agreement to which this
Exhibit is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________ without
recourse" and signed in the name of the Company by an
authorized officer (in the event that the Mortgage Loan was
acquired by the Company in a merger, the signature must be in
the following form: "ABN AMRO Mortgage Group, Inc., successor
by merger to [name of predecessor]"; and in the event that the
Mortgage Loan was acquired or originated by the Company while
doing business under another name, the signature must be in
the following form: "ABN AMRO Mortgage Group, Inc., formerly
known as [previous name]").
2. The original of any guarantee executed in connection with the
Mortgage Note (if any).
3. The original Mortgage, with evidence of recording thereon. If
in connection with any Mortgage Loan, the Company 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 Company
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 Company 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 Company; 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 or by the
title insurance company that issued the title policy to be a
true and complete copy of the original recorded Mortgage.
4. The originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon.
B-1
5. The original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording, delivered in
blank. If the Mortgage Loan was acquired by the Company in a
merger, the Assignment of Mortgage must be made by "ABN AMRO
Mortgage Group, Inc., successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or originated
by the Company while doing business under another name, the
Assignment of Mortgage must be by "ABN AMRO Mortgage Group,
Inc., formerly known as [previous name]."
6. Originals of all intervening assignments of the Mortgage 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
Company 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 Company
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 or by the title insurance company that issued
the title policy 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 Company; 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.
7. The original PMI Policy or certificate of insurance, where
required pursuant to the Agreement.
8. The original mortgagee policy of title insurance or attorney's
opinion of title and abstract of title.
9. Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
10. The original hazard insurance policy and, if required by law,
flood insurance policy, in accordance with Section 4.10 of the
Agreement.
11. Residential loan application.
12. Mortgage Loan closing statement.
13. Verification of employment and income.
14. Verification of acceptable evidence of source and amount of
downpayment.
B-2
15. Credit report on the Mortgagor.
16. Residential appraisal report.
17. Photograph of the Mortgaged Property.
18. Survey of the Mortgaged Property.
19. 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.
20. All required disclosure statements.
21. If available, termite report, structural engineer's report,
water potability and septic certification.
22. Sales contract.
23. 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.
In the event an Officer's Certificate of the Company is
delivered to the Custodian because of a delay caused by the public recording
office in returning any recorded document, the Company shall deliver to the
Custodian, within 60 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 date the applicable recorded document will be
delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv) above.
An extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
B-3
EXHIBIT C-1
MORTGAGE LOAN DOCUMENTS
The Mortgage Loan Documents for each Mortgage Loan shall
include each of the following items, which shall be delivered to the Custodian
pursuant to Section 2.01 of the Seller's Warranties and Servicing Agreement to
which this Exhibit is annexed (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 Company by an authorized officer. To the extent that
there is no room on the face of the Mortgage Note for endorsements, the
endorsement may be contained on an allonge, if state law so allows. If the
Mortgage Loan was acquired by the Company in a merger, the endorsement must be
by "ABN AMRO Mortgage Group, Inc., successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or originated by the Company
while doing business under another name, the endorsement must be by "ABN AMRO
Mortgage Group, Inc., 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,
and the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon;
(d) the originals of all assumption, modification,
consolidation or extension agreements, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording, delivered in blank. If the
Mortgage Loan was acquired by the Company in a merger, the Assignment of
Mortgage must be made by "ABN AMRO Mortgage Group, Inc., successor by merger to
[name of predecessor]." If the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the Assignment of Mortgage must
be by "ABN AMRO Mortgage Group, Inc., formerly known as [previous name];"
(f) the originals of all intervening assignments of mortgage
with evidence of recording thereon, including warehousing assignments, if any;
(g) the original PMI Policy or certificate, if private
mortgage guaranty insurance is required pursuant to the Agreement;
(h) the original mortgagee title insurance policy or
attorney's opinion of title and abstract of title;
C-1-1
(i) the original of any security agreement, chattel mortgage
or equivalent executed in connection with the Mortgage; and
(j) such other documents as the Purchaser may require.
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
ABN AMRO Mortgage Group, Inc. hereby certifies that it has
established the account described below as a Custodial Account pursuant to
Section 4.04 of the Seller's Warranties and Servicing Agreement, dated as of
February 1, 2002, Conventional Residential Adjustable Rate Mortgage Loans, Group
No. 2002-1.
Title of Account: ABN AMRO Mortgage Group, Inc. in trust for the Purchaser,
Group No. 2002-1.
Account Number:__________________
Address of office or branch
of the Company at
which Account is maintained:
___________________________________
___________________________________
___________________________________
___________________________________
ABN AMRO MORTGAGE GROUP, INC.
Company
By: _______________________________
Name: _____________________________
Title: ____________________________
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing
Agreement, dated as of February 1, 2002, Conventional Residential Adjustable
Rate Mortgage Loans, Group No. 2002-1 (the "Agreement"), we hereby authorize and
request you to establish an account, as a Custodial Account pursuant to Section
4.04 of the Agreement, to be designated as "ABN AMRO Mortgage Group, Inc., in
trust for the Purchaser - Conventional Residential Adjustable Rate Mortgage
Loans - Group No. 2002-1." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
ABN AMRO MORTGAGE GROUP, INC.
Company
By: _________________________________
Name: _______________________________
Title: ______________________________
Date:________________________________
D-2-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number __________, at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
______________________________________
Depository
By: __________________________________
Name: ________________________________
Title: _______________________________
Date:_________________________________
D-2-2
EXHIBIT E-1
ESCROW ACCOUNT CERTIFICATION
__________________, 200_
ABN AMRO Mortgage Group, Inc. hereby certifies that it has
established the account described below as an Escrow Account pursuant to Section
4.06 of the Seller's Warranties and Servicing Agreement, dated as of February 1,
2002, Conventional Residential Adjustable Rate Mortgage Loans, Group No. 2002-1.
Title of Account: "ABN AMRO Mortgage Group, Inc. in trust for the Purchaser,
Group No. 2002-1, and various Mortgagors."
Account Number:__________________
Address of office or branch
of the Company at
which Account is maintained:
__________________________________
__________________________________
__________________________________
__________________________________
ABN AMRO MORTGAGE GROUP, INC.
Company
By: ______________________________
Name: ____________________________
Title: ___________________________
X-0-0
XXXXXXX X-0
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To: _________________________________
_________________________________
_________________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing
Agreement, dated as of February 1, 2002, Conventional Residential Adjustable
Rate Mortgage Loans, Group No. 2002-1 (the "Agreement"), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
4.07 of the Agreement, to be designated as "ABN AMRO Mortgage Group, Inc., in
trust for the Purchaser - Conventional Residential Adjustable Rate Mortgage
Loans - Group No. 2002-1." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
ABN AMRO MORTGAGE GROUP, INC.
Company
By: ____________________________________
Name: __________________________________
Title: _________________________________
Date:___________________________________
E-2-1
The undersigned, as Depository, hereby certifies that the
above described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
____________________________________________
Depository
By: ________________________________________
Name: ______________________________________
Title: _____________________________________
Date:_______________________________________
E-2-2
EXHIBIT F
MONTHLY REMITTANCE ADVICE
[INTENTIONALLY OMITTED]
F-1
EXHIBIT G
ASSIGNMENT AND ASSUMPTION
_________________, 200_
ASSIGNMENT AND ASSUMPTION, dated __________, between
__________________________________, a ___________________ corporation having an
office at __________________ ("Assignor") and _________________________________,
a __________________ corporation having an office at __________________
("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to
Assignee all of the right, title and interest of Assignor, as purchaser, in, to
and under that certain Seller's Warranties and Servicing Agreement, Conventional
Residential Adjustable Rate Mortgage Loans, Group No. 2002-1 (the "Seller's
Warranties and Servicing Agreement"), dated as of February 1, 2002, by and
between Xxxxxx Brothers Bank, FSB (the "Purchaser"), and ABN AMRO Mortgage
Group, Inc. (the "Company"), and the Mortgage Loans Group No. 2002-1 delivered
thereunder by the Company to the Assignor.
2. The Assignor warrants and represents to, and covenants
with, the Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Company with respect to the Seller's Warranties and Servicing Agreement or the
Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing obligations under the Seller's Warranties and
Servicing Agreement. The Assignor has no knowledge of, and has not received
notice of, any waivers under or amendments or other modifications of, or
assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans 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 which
would constitute a distribution of the Mortgage Loans under the Securities Act
of 1933 (the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration pursuant
thereto.
G-1
3. The Assignee warrants and represents to, and covenants
with, the Assignor and the Company that:
a. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Seller's Warranties and Servicing
Agreement, the Mortgage Loans, and from and after the date hereof, the Assignee
assumes for the benefit of each of the Company and the Assignor all of the
Assignor's obligations as Purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not
been registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the
Mortgage Loans are in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this connection,
neither the Assignee nor any Person authorized to act therefor has offered the
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of U.S. Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
e. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Company;
g. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner which would constitute a distribution of the
Mortgage Loans under the 33 Act or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans; and
h. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
i. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreement is:
_____________________________
_____________________________
_____________________________
Attention:___________________
The Assignee's wire transfer instructions for purposes of all
remittances and payments related to the Mortgage Loans and the Seller's
Warranties and Servicing Agreement are:
_____________________________
_____________________________
_____________________________
IN WITNESS WHEREOF, the parties have caused this Assignment
and Assumption to be executed by their duly authorized officers as of the date
first above written.
_____________________________________________________ _____________________________________________________
Assignor Assignee
By:__________________________________________________ By: _________________________________________________
Its:_________________________________________________ Its: ________________________________________________
EXHIBIT H
COMPANY'S UNDERWRITING GUIDELINES
[INTENTIONALLY OMITTED]
G-1
