Exhibit 99.14
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Xxxxxx Brothers Bank, FSB,
Purchaser
and
National City Mortgage Co.,
Company
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SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of August 1, 2001
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Conventional Residential Fixed Rate Mortgage Loans
Group No. 2001-1
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
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..................................... 11
Section 2.02 Books and Records; Transfers of Mortgage Loans....................... 12
Section 2.03 Delivery of Documents................................................ 13
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 Review of Mortgage Loans............................................. 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........................................ 30
Section 4.03 Collection of Mortgage Loan Payments................................. 31
Section 4.04 Establishment of and Deposits to Custodial Account................... 31
Section 4.05 Permitted Withdrawals From Custodial Account......................... 33
Section 4.06 Establishment of and Deposits to Escrow Account...................... 34
Section 4.07 Permitted Withdrawals From Escrow Account............................ 35
Section 4.08 Payment of Taxes, Insurance and Other Charges........................ 35
Section 4.09 Protection of Accounts............................................... 36
Section 4.10 Maintenance of Hazard Insurance...................................... 36
Section 4.11 Maintenance of Mortgage Impairment Insurance......................... 38
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance...... 38
Section 4.13 Inspections.......................................................... 39
Section 4.14 Restoration of Mortgaged Property.................................... 39
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Section 4.15 Maintenance of PMI and LPMI Policy; Claims........................... 39
Section 4.16 Title, Management and Disposition of REO Property.................... 41
Section 4.17 Real Estate Owned Reports............................................ 42
Section 4.18 Liquidation Reports.................................................. 42
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property....... 42
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.......................................................... 43
Section 5.02 Statements to Purchaser.............................................. 43
Section 5.03 Monthly Advances by Company.......................................... 44
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property...................................... 44
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.............. 45
Section 6.03 Servicing Compensation............................................... 45
Section 6.04 Annual Statement as to Compliance.................................... 46
Section 6.05 Annual Independent Public Accountants' Servicing Report.............. 46
Section 6.06 Right to Examine Company Records..................................... 46
Section 6.07 Appointment and Designation of Master Servicer....................... 46
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, Whole-Loan Transfer or a
Pass-Through Transfer on One or More Reconstitution Dates......... 47
Section 7.02 Purchaser's Repurchase and Indemnification Obligations............... 48
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information............................................. 49
Section 8.02 Financial Statements; Servicing Facility............................. 49
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.................................. 50
Section 9.02 Merger or Consolidation of the Company............................... 51
Section 9.03 Limitation on Liability of Company and Others........................ 51
Section 9.04 Limitation on Resignation and Assignment by Company.................. 51
ARTICLE X
DEFAULT
Section 10.01 Events of Default.................................................... 52
Section 10.02 Waiver of Defaults................................................... 54
ARTICLE XI
TERMINATION
Section 11.01 Termination.......................................................... 54
Section 11.02 Termination Without Cause............................................ 54
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company................................................. 55
Section 12.02 Amendment............................................................ 56
Section 12.03 Governing Law........................................................ 56
Section 12.04 Duration of Agreement................................................ 56
Section 12.05 Notices.............................................................. 56
Section 12.06 Severability of Provisions........................................... 57
Section 12.07 Relationship of Parties.............................................. 57
Section 12.08 Execution; Successors and Assigns.................................... 57
Section 12.09 Recordation of Assignments of Mortgage............................... 57
Section 12.10 Assignment by Purchaser.............................................. 57
Section 12.11 No Personal Solicitation............................................. 58
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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
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I ACKNOWLEDGMENT AGREEMENT
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This is a Seller's Warranties and Servicing Agreement for
conventional fixed rate residential first lien mortgage loans, dated and
effective as of August 1, 2001, and is executed between Xxxxxx Brothers Bank,
FSB, as purchaser (the "Purchaser"), and National City Mortgage Co., as seller
and servicer (the "Company").
WITNESSETH:
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:
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.
Ancillary Income: All fees derived from the Mortgage Loans, other
than Servicing Fees and prepayment fees, including but not limited to, late
charges, , fees received with respect to checks or bank drafts returned by the
related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges. The Company shall
retain all Ancillary Income as part of the Servicing Fee to the extent not
required to be deposited into the Custodial Account.
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.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Approved Flood Policy Insurer: Any of the following insurers: Flood
Data Services, Inc., Flood Zone, Inc., GEOTrac, or Transamerica Flood Hazard
Certification.
Approved Tax Service Contract Provider: Any of the following
providers: First American, TransAmerica, Lereta or Fidelity
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.
BPO: A broker's price opinion with respect to a Mortgaged Property.
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: The date or dates set forth on the related Purchase
Price and Terms Letter on which the Purchaser from time to time shall purchase
and the Company from time to time shall sell, the Mortgage Loans listed on the
related Mortgage Loan Schedule.
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: National City Mortgage Co., 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.
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Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: That certain Custodial Agreement, dated as of
September 1, 1999 by and between the Purchaser and U.S. Bank Trust National
Association.
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 provided therein.
Cut-off Date: The date set forth on the related Purchase Price and
Terms Letter.
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.
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.
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
Moody's
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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.
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.
Fidelity Bond: A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
First Remittance Date: August 18, 2001.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
GEMICO: General Electric Mortgage Insurance Corporation or any
successor thereto.
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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.
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 related
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.
LPMI Loan:A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance issued
by another Qualified Insurer pursuant to which the related premium is to be paid
by the Servicer of the related Mortgage Loan from payments of interest made by
the Mortgagor in an amount as is set forth in the related Trade Confirmation
Letter and Mortgage Loan Schedule.
LPMI Fee: With respect to each LPMI Loan, the portion of the
Mortgage Interest Rate as set forth on the related Mortgage Loan Schedule (which
shall be payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
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 or leasehold estate 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.
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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 related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, 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-1 hereto.
Mortgage Loan Package: A pool of Mortgage Loans sold to the
Purchaser by the Company on a Closing Date.
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 (i) the Servicing Fee Rate and (ii) with
respect to LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package,
a schedule of Mortgage Loans annexed hereto as Exhibit A, such schedule setting
forth the following information with respect to each Mortgage Loan: (1) the
Company's Mortgage Loan identifying number; (2) the Mortgagor's and
Co-Mortgagor's name; (3) the street address of the Mortgaged Property including
the city, state, county, and the zip code; (4) the lot, block, and section
numbers of the Mortgaged Property; (5) a code indicating whether the loan was
originated through a correspondent, retail, or wholesale channel; (6) the broker
identification number; (7) a code indicating whether the Mortgaged Property is a
single family residence, a 2-4 family dwelling, a PUD, a townhouse or a unit in
a high-rise or low-rise condominium project; (8) the year in which the Mortgaged
Property was built; (9) the number of units for all Mortgaged Properties; (10)
the number of bedrooms and rents by unit; (11) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule, and if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (12)
a code indicating the lien status of the Mortgage Loan; (13) the Loan to Value
Ratio at origination; (14) the Combined Loan to Value Ratio at origination, if
applicable; (15) the Appraised Value and purchase price, if applicable, of the
Mortgaged Property; (16) the Mortgage Interest Rate at the time of origination;
(17) the Mortgage Interest Rate as of the related Cut-off Date; (18) the
application date of the Mortgage Loan; (19) the Mortgage Loan
approval/commitment date; (20) the origination date of the Mortgage Loan; (21)
the first payment date of the Mortgage Loan; (22) the stated maturity date of
the Mortgage Loan; (23) the amount of the Monthly Payment as of the related
Cut-off Date; (24) the amount of the Monthly Payment at the time of origination;
(25) the next Due Date of the Mortgage Loan; (26) a twelve month history for the
Mortgage Loan and the number of times thirty, sixty, and ninety days delinquent
in the past twelve months; (27) a code indicating the payment status of the
Mortgage Loan (i.e. bankruptcy, foreclosure, REO); (28) a twelve month history
for the prior Mortgage Loan and the number of times thirty, sixty, and ninety
days delinquent in the past twelve months; (29) the original principal amount of
the Mortgage Loan; (30) the original principal amount of any senior Mortgage
Loans; (31) the actual principal balance of the Mortgage Loan as of the close of
business on the related Cut-off Date, after deduction of payments of principal
actually collected on or before the related Cut-off Date; (32) the scheduled
principal balance of the Mortgage Loan as of the close of business on the
related
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Cut-off Date; after deduction of payments of principal due on or before
the related Cut-off Date, whether or not collected, if applicable; (33) the
Mortgage Loan purpose type; (34) the occupancy status of the Mortgaged Property
at the time of origination; (35) the Mortgagor's and Co-Mortgagor's FICO score;
(36) a code indicating the mortgage insurance provider (PMI or LPMI) and percent
of coverage, if applicable; (37) the mortgage insurance certificate number; a
code indicating the method of payment for mortgage insurance premiums and cost
(LPMI), if applicable; (38) the loan documentation type; (39) the back-end debt
to income ratio; (40) number of Mortgagors; (41) Mortgagor Social Security
Number; (42) co-Mortgagor Social Security Number; (43) Mortgagor date of birth;
(44) co-Mortgagor date of birth; (45) Mortgagor gender; (46) co-Mortgagor
gender; (47) Mortgagor race; (48) co-Mortgagor race; (49) combined annual
income; (50) a code indicating first time buyer; (51) a code indicating whether
the Mortgage Loan has a prepayment penalty; (52) a code indicating the
prepayment penalty term and the prepayment penalty amount of the Mortgage Loan,
if any; (53) the monthly Servicing Fee, if provided; (54) the tax service
contract provider; (55) the flood insurance certification contract provider;
(56) the monthly tax and insurance payment; and (57) the escrow balance as of
the Cut-Off Date;. With respect to the Mortgage Loans in each Mortgage Loan
Package in the aggregate, the related Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor 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.
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.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI: PMI Mortgage Insurance Co., or any successor thereto.
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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.
Pool Insurer: Any of GEMICO, PMI or UGI.
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 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 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; and (v)
comply with each representation and warranty set forth in Sections 3.01 and
3.02.
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Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's 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, Whole-Loan
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 Xxx with respect to a Xxxxxx Mae 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 Mae or Xxxxxxx Mac, if applicable, at least equal to the Servicing
Fee and Ancillary Income 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 or Whole-Loan 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, Whole Loan 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.
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.
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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 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: 0.25% 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-1 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 related 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
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Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Subservicer: Any Subservicer which is subservicing the Mortgage
Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Company and a
Subservicer for the servicing of the Mortgage Loans.
Underwriting Guidelines: The underwriting guidelines of the Company
with respect to jumbo prime Mortgage Loans, attached hereto as Exhibit H.
UGI: United Guaranty Residential Insurance Company or any successor
thereto.
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, on each Closing Date 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 in the related Mortgage Loan Package. Pursuant to
Section 2.03, the Company has delivered the Mortgage Loan Documents for each
Mortgage Loan in the Mortgage Loan Package to the Custodian.
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,
3.06, or 6.02.
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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 in a Mortgage Loan Package including
but not limited to all funds received on or in connection with the Mortgage
Loans, shall be received and held by the Company in trust for the benefit of the
Purchaser as owner of such 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 in a Mortgage Loan Package 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 Xxx 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.
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) with respect to
each Mortgage Loan Package, in no event shall there be more than three 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
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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 before the date which is seven Business Days prior to the
related Closing Date, the Company shall deliver and release to the Custodian
those Mortgage Loan Documents as required by this Agreement with respect to each
Mortgage Loan in the related Mortgage Loan Package a list of which is attached
to the related Assignment and Conveyance.
On or prior to the related Closing Date, the Custodian shall certify
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 Company
shall be responsible for maintaining the Custodial Agreement for the benefit of
the Purchaser. Purchaser 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 three Business Days prior to the
related Closing Date, the Seller shall deliver to the Purchaser the related
Mortgage Loan Schedule.
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 each
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 New York 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
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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;
(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;
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(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the best of the Company's knowledge threatened
against the Company which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, properties or assets of the 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 related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding fixed rate one- to four-family mortgage loans in the Company's
portfolio at the related Closing Date as to which the representations and
warranties set forth in Section 3.02 could be made and such selection was not
made in a manner so as to affect adversely the interests of the Purchaser;
(j) Pool Characteristics. With respect to each Mortgage Loan
Package, the Mortgage Loan characteristics set forth on Exhibit 2 to the related
Assignment and Conveyance are true and complete;
(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 as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position at the end of each such period of the Company 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. In addition, the Company has delivered
information as to its mortgage loan payment delinquency experience for the
immediately preceding three-year period, in each case with respect to mortgage
loans owned by it during such period, and all such information so delivered is
true and correct in all material respects. The Company has delivered a comfort
letter from its auditors with respect to such delinquency information. There has
been no change in the
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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.
The Company has completed any forms requested by the Purchaser in a timely
manner and in accordance with the provided instructions;
(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;
(o) Origination. The Company's decision to originate 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;
(p) 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
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 related Closing Date:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related 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 has
been 30 or more days delinquent at any time in the 12 months preceding the
related 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;
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(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 related 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 related Mortgage Loan
Schedule;
(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 or any Subservicer'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, unlawful commission, unlawful
kickback or other unlawful compensation or value of any kind has been or will be
received,
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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;
(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 or leasehold property located in the state identified in the
related 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 regarding such dwellings, and no residence or dwelling
is a mobile home or a manufactured dwelling. No portion of the Mortgaged
Property is used 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 and improvements on the Mortgaged Property, 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
- 18 -
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;
(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;
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(o) LTV, PMI Policy. No Mortgage Loan has a LTV equal to or 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 or LPMI 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; provided, that, with respect to LPMI Loans, the related Servicer is
obligated thereunder to maintain the LPMI Policy and to pay all premiums and
charges in connection therewith.. The Mortgage Interest Rate for the Mortgage
Loan as set forth on the related Mortgage Loan Schedule is net of any such
insurance premium;
(p) Title Insurance. The Mortgage Loan is covered by either (i) an
attorney's opinion of title and abstract of title the form and substance of
which is acceptable to mortgage lending institutions making mortgage loans in
the area where the Mortgaged Property is located or (ii) 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 (or to the extent that a Mortgage Note provides for
negative amortization, the maximum amount of negative amortization in accordance
with the Mortgage), 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;
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(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 which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note. The Mortgage Note is payable each month in equal monthly
installments of principal and interest, 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. There is no negative amortization;
(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 in effect
at the time the Mortgage Loan was originated. The Mortgage Loan is in conformity
with the standards of Xxxxxxx Mac or Xxxxxx Mae under one of their respective
home mortgage purchase programs (except that the principal balance of certain
Mortgage Loans may have exceeded the limits of Xxxxxx Xxx and Xxxxxxx Mac) and
the Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Xxx;
(w) Occupancy of the Mortgaged Property. As of the related 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;
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(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 Purchaser 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;
(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 Mae eligibility requirements for sale to Xxxxxx Xxx or is
located in a condominium or planned unit development project which has received
Xxxxxx Mae project approval and the representations and warranties required by
Xxxxxx Xxx 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;
(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 Mortgagor 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
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"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 related 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 Mae 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;
and
(hh) Collection Practices; Escrow Deposits. The origination and
collection practices used with respect to the Mortgage Loan have been in
accordance with Accepted Servicing Practices, and have been 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 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 in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable. No escrow deposits or Escrow
Payments or other charges or payments due the Company have been capitalized
under the Mortgage or the Mortgage Note;
(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, duly appointed by the Company, who had no
interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof; and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy
the requirements of 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;
(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. To the best of
the Company's knowledge, there is no
- 23 -
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) 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;
(mm) Insurance. The Company has caused or will cause to be performed
any and all acts required to preserve the rights and remedies of the Purchaser
in any insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser; No action, inaction, or event has
occurred and no state of fact 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;
(nn) 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.
(oo) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as (a) "high cost" loans under the Home Ownership
and Equity Protection Act of 1994 or (b) "high cost," "threshold," or
"predatory" loans under any other applicable state, federal or local law.
(pp) Simple Interest Mortgage Loans. None of the Mortgage Loans are
simple interest Mortgage Loans.
(qq) Single Premium Credit Life Insurance. None of the proceeds of
the Mortgage Loan were used to finance single-premium credit life insurance
policies.
(rr) Tax Service Contract The Company has obtained a life of loan,
transferable real estate Tax Service Contract on each Mortgage Loan with an
Approved Tax Servicer Contract Provider and such contract is assignable without
penalty, premium or cost to the Purchaser;
(ss) Flood Certification Contract. The Company has obtained a life
of loan, transferable flood certification contract with an Approved Flood Policy
Insurer acceptable to Purchaser in its sole discretion for each Mortgage Loan
and such contract is assignable without penalty, premium or cost to the
Purchaser;
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(tt) FICO Scores. Each Mortgage Loan has a non-zero FICO score;
(uu) Prepayment Fee. With respect to each Mortgage Loan that has a
prepayment fee feature, each such prepayment fee is enforceable and will be
enforced by the Company, and each prepayment penalty in permitted pursuant to
federal, state and local law. No Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such Mortgage Loan was
originated. Except as otherwise set forth in the related Mortgage Loan Schedule,
with respect to each Mortgage Loan that contains a prepayment fee, such
prepayment fee is at least equal to the lesser of (A) the maximum amount
permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan; and
(vv) Recordation. Each original Mortgage was recorded and 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.
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
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.
- 25 -
With respect to those representations and warranties which are made
to the best of the Company's knowledge, if it is discovered by the Company or
the Purchaser that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest of the Purchaser (or which materially and
adversely affects the value of a Mortgage Loan or the interests of the Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan), notwithstanding the Company's lack of
knowledge with respect to the substance of such representation and warranty,
such inaccuracy shall be deemed a breach of the applicable representation and
warranty.
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,
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 be repurchased by the Company at the Repurchase
Price; provided, that if such Breach may be cured by the repurchase of one or
more individual Mortgage Loans, the Company may repurchase only those Mortgage
Loans necessary to cure the Breach. 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 related 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 related 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 or substitution, 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 or substitution, the Company shall, simultaneously with
such reassignment, give written notice to the Purchaser that such repurchase or
substitution has taken place, amend the related Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and, in
the case of substitution, identify a Qualified Substitute Mortgage Loan and
amend the related Mortgage Loan Schedule to reflect the addition of such
Qualified Substitute Mortgage Loan to this Agreement. In connection with any
such substitution, the Company shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution. The Company
shall effect such substitution by delivering to the Custodian for
- 26 -
such Qualified Substitute Mortgage Loan the documents required by Section 2.03,
with the Mortgage Note endorsed as required by Section 2.03. No substitution
will be made in any calendar month after the Determination Date for such month.
The Company shall deposit in the Custodial Account the Monthly Payment less the
Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the
month following the date of such substitution. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Company. For the month of substitution, distributions to
Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan in
the month of substitution, and the Company shall thereafter be entitled to
retain all amounts subsequently received by the Company in respect of such
Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, the Company shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Company in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
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.
With respect to any Mortgage Loan, if the related Mortgagor is 30 or
more days delinquent with respect to the Mortgage Loan's first or second Monthly
Payment due to the Purchaser after the related Closing Date, the Company shall,
upon receipt of notice from the Purchaser, promptly repurchase such Mortgage
Loan from the Purchaser in accordance with this Section 3.03; provided, that no
right to cure set forth therein shall apply.
Section 3.04 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 Underwriting Guidelines, (ii) is underwritten without verification of the
Mortgagor's income and assets and there is no credit report or FICO Score, (iii)
the Purchaser deems the Mortgage Loan to not be an acceptable credit risk, or
(iv) the value of the Mortgaged Property pursuant to any BPO varies by more than
plus or minus 15% from the lesser of (A) the original appraised value of the
Mortgaged Property or (B) the purchase price of the Mortgaged Property as of the
date of origination. In the event that the Purchaser so rejects any Mortgage
Loan, the Company shall
- 27 -
repurchase the rejected Mortgage Loan at the Repurchase Price in the manner
prescribed in Section 8(a) 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. To the extent that during the course of the Purchaser's
initial review, the Purchaser discovers that the Mortgage Loans do not otherwise
meet the Seller's Underwriting Guidelines or the terms of the Purchase
Transaction, the Purchase shall have the right to carry out additional due
diligence reviews, which additional due diligence shall be at the expense of the
Company. Purchaser's decision to increase its due diligence review or obtain
additional BPO's or other property evaluations is at its sole discretion. The
additional review may be for any reason including but not limited to credit
quality, property valuations, and data integrity. 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.
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
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
- 28 -
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.
The Mortgage Loans may be subserviced by the Subservicer on behalf
of the Company provided that the Subservicer is a Xxxxxx Xxx-approved lender or
a Xxxxxxx Mac seller/servicer in good standing, and no event has occurred,
including but not limited to a change in insurance coverage, which would make it
unable to comply with the eligibility requirements for lenders imposed by Xxxxxx
Xxx or for seller/servicers imposed by Xxxxxxx Mac, or which would require
notification to Xxxxxx Xxx or Xxxxxxx Mac. The Company may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Company of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the Subservicer from its
own funds, and the Subservicer's fee shall not exceed the Servicing Fee.
At the cost and expense of the Company, without any right of
reimbursement from the Custodial Account, the Company shall be entitled to
terminate the rights and responsibilities of the Subservicer and arrange for any
servicing responsibilities to be performed by a successor Subservicer meeting
the requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at the
Company's option, from electing to service the related Mortgage Loans itself. In
the event that the Company's responsibilities and duties under this Agreement
are terminated pursuant to Section 9.04, 10.01 or 11.02, and if requested to do
so by the Purchaser, the Company shall at its own cost and expense terminate the
rights and responsibilities of the Subservicer as soon as is reasonably
possible. The Company shall pay all fees, expenses or penalties necessary in
order to terminate the rights and responsibilities of the Subservicer from the
Company's own funds without reimbursement from the Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Company and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Company shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Company shall be
entitled to enter into an agreement with the Subservicer for indemnification of
the Company by the Subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
- 29 -
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the Subservicer and Company alone, and the Purchaser shall have no
obligations, duties or liabilities with respect to the Subservicer including no
obligation, duty or liability of Purchaser to pay the Subservicer's fees and
expenses. For purposes of distributions and advances by the Company pursuant to
this Agreement, the Company shall be deemed to have received a payment on a
Mortgage Loan when the Subservicer has received such payment.
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, provided that, prior
to commencing foreclosure proceedings, the Company shall notify the Purchaser in
writing of the Company's intention to do so, and the Company shall not commence
foreclosure proceedings if the Purchaser objects to such action within 10
Business Days of receiving such notice. 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.
After reviewing the environmental inspection report, the Purchaser
shall determine how the Company shall proceed with respect to the Mortgaged
Property. In the event
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(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 "National City
Mortgage Corp in trust for the Purchaser of Conventional Residential
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1 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.
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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 related Cut-off Date, (other than
payments of principal and interest due on or before the related Cut-off Date, or
received by the Company prior to the related Cut-off Date but allocable to a
period subsequent thereto, or with respect to each LPMI Loan, in the amount of
the LPMI Fee):
(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 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 up to a maximum amount per month of the
Servicing Fee actually received for such month for the Mortgage Loans;
(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 Ancillary Income,
including 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.
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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.
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, 3.06 or 6.02, the Company's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase
Price pursuant to such sections and all other amounts required to be paid
to the Purchaser 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, 3.06 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;
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(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
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, "National City Mortgage Corp., in trust for the Purchaser of
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1 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.
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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;
(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.
- 35 -
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.
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
- 36 -
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.
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 Mae 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
- 37 -
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.
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 acceptable to Xxxxxx Xxx or Xxxxxxx Mac.
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.
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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.
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 and LPMI Policy; Claims.
(a) With respect to each Mortgage Loan with a LTV in excess of 80%,
the Company shall:
(i) with respect to Mortgage Loans which are not LPMI Loans, in
accordance with state and federal laws and
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% (or such other percentage as stated in the related
Acknowledgment Agreement) 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, at substantially the same fee level. If the insurer shall cease to
be a Qualified Insurer, the Company shall determine whether recoveries under the
PMI Policy are
- 39 -
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 4.01, 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.
(ii) with respect to LPMI Loans, maintain in full force and effect
an LPMI Policy insuring that portion of the Mortgage Loan in excess of 75% (or
such other percentage as stated in the related Acknowledgment Agreement) of
value, and from time to time, withdraw the LPMI Fee with respect to such LPMI
Loan from the Custodial Account in order to pay the premium thereon on a timely
basis, until the LTV of such Mortgage Loan is reduced to 80%. In the event that
the interest payments made with respect to any LPMI Loan are less than the LPMI
Fee, the Company shall advance from its own funds the amount of any such
shortfall in the LPMI Fee, in payment of the premium on the related LPMI Policy.
Any such advance shall be a Servicing Advance subject to reimbursement pursuant
to the provisions on Section 2.05. In the event that such LPMI 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 LPMI Policy, at substantially the same fee level. If the insurer
shall cease to be a Qualified Insurer, the Company shall determine whether
recoveries under the LPMI 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 LPMI 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 LPMI 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 LPMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such LPMI 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 LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
LPMI Policy as provided above.
(b) 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 or LPMI Policy in a timely fashion in
accordance with the terms of such PMI Policy or LPMI Policy and, in this regard,
to take such action as shall be necessary to permit recovery under any PMI
Policy or LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section
4.04, any
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amounts collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
(c) Purchaser, in its sole discretion, at any time, may (i)
either obtain an additional PMI Policy on any Mortgage Loan which already has a
PMI Policy in place, or (ii) obtain a PMI Policy for any Mortgage Loan which
does not already have a PMI Policy in place. In any event, the Company agrees to
administer such PMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
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 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.
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
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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, a Subservicer, 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.
Section 4.19 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.
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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 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 10th calendar day of each month (or if such 10th
day is not a Business Day, the Business Day immediately preceding such 10th
day), the Company shall furnish to the Purchaser in electronic form monthly
reports in the form of standard ALLTEL reports with respect to the Mortgage
Loans and the period from but including the first day of the preceding calendar
month through but excluding the first day of such month.
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.
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In addition, the Company shall provide each Purchaser with such
information as any Purchaser may reasonably request from time to time concerning
the Mortgage Loans as is necessary for such Purchaser to prepare its federal
income tax return and any and all other 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.
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
will continue through the last Monthly Payment due prior to the payment in full
of the Mortgage Loan, or through 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.
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 or LPMI 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. If an assumption fee is collected by the Company
for entering
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into an assumption agreement, a portion of such fee, up to an amount equal to
one-half of one percent (.5%) of the outstanding principal balance of the
related Mortgage Loan, will be retained by the Company as additional servicing
compensation, and any portion thereof in excess of one-half of one percent (.5%)
shall be deposited in the Custodial Account for the benefit of the Purchaser. 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 Xxx 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.
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.
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Additional servicing compensation in the form of assumption fees, to
the extent provided in Section 6.01, and Ancillary Income 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, upon the Purchaser's
request, 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.
Section 6.05 Annual Independent Public Accountants' Servicing
Report.
On or before May 31st of each year beginning May 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.
Section 6.07 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.
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ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, Whole-Loan
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, but with respect to the Mortgage Loans
in each Mortgage Loan Package, not more than once in each twelve month period,
the Purchaser shall:
(1) Effect an Agency Transfer, and/or
(2) Effect a Whole Loan Transfer, and/or
(3) 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 Purchaser shall give the Company 60 days notice of any Agency
Transfer, Whole Loan Transfer or Pass-Through Transfer. The Company shall
cooperate with the Purchaser in connection with any Agency Transfer, Whole Loan
Transfer or Pass-Through Transfer contemplated by the Purchaser pursuant to this
Section 7.01. In that connection, the Company shall (a) execute any
Reconstitution Agreement within a reasonable 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
Mae, 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; and (ii) such additional
representations, warranties, covenants, 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.
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, Whole
Loan 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
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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, Whole Loan 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,
a third party purchaser 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, to a third party purchaser pursuant to a Whole
Loan 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, the third party
purchaser, or the trustee related to such deficiencies of the related Mortgage
Loans transferred to Xxxxxx Mae, Xxxxxxx Mac, or the trustee.
The Purchaser shall repurchase from the Company any Mortgage Loan
transferred to Xxxxxx Mae or Xxxxxxx Mac pursuant to an Agency Transfer, to a
third party purchaser pursuant to a Whole Loan 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, the third party purchaser 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, a third party purchaser 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, the third party
purchaser 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, a third party
purchaser 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, a third party purchaser 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 related 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
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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 the Purchaser, 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. Any special reports or
information delivered shall be at the Purchaser's expense.
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.
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 the Company for the most recently completed five 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. Purchaser shall not make such statement available to any prospective
Purchaser unless such prospective Purchaser has signed a confidentiality
agreement with respect to the information provided with respect to Company. The
Company also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Company
(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 or those of any Subservicer for the
purpose of satisfying such prospective Purchaser that the Company and any
Subservicer have the ability to service the Mortgage Loans as provided in this
Agreement.
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.
(a) Breaches of Representations and Warranties.. The Company agrees
to indemnify the Purchaser and hold it harmless from and against any and all
claims, losses, damages, penalties, fines, forfeitures, legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related any assertion based on, grounded upon resulting from
a Breach of any of the Company's representations and warranties contained
herein. The Company shall immediately notify the Purchaser if a claim is made by
a third party with respect to this Agreement or the Mortgage Loans, assume (with
the consent of the Purchaser and with counsel reasonably satisfactory to 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 but failure to so notify the Purchaser shall not limit its
obligations hereunder. The Company agrees that it will not enter into any
settlement of any such claim without the consent of the Purchaser unless such
settlement includes an unconditional release of the Purchaser from all liability
that is the subject matter of such claim. In addition to the obligations of the
Company set forth in this Section 9.01(a), the Purchaser may pursue any and all
remedies otherwise available at law or in equity, including, but not limited to,
the right to seek damages. The provisions of this Section 9.01(a) shall survive
termination of this Agreement.
It is understood and agreed that the obligations of the Company set
forth in Sections 3.03 and 9.01(a) to cure, substitute for or repurchase a
defective Mortgage Loan and to indemnify the Purchaser constitute the sole
remedies of the Purchaser respecting a Breach of the representations and
warranties set forth in Section 3.01 and 3.02.
(b) Servicing. 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
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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.
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
in the event that such successor servicer is not acceptable to the Purchaser in
its sole discretion, the Purchaser shall have the right to terminate the
successor servicer's rights under this servicing agreement without payment of
any Termination Fee.
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
- 51 -
or delegate its rights or duties hereunder or any portion hereof (to other than
a Subservicer) 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 not be unreasonably withheld.
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 (to other than a Subservicer) 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
- 52 -
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
(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 thereof (to other than a Subservicer) 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.
- 53 -
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.
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, upon thirty days notice or 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. The Purchaser and the Servicer shall comply with the termination
procedures set forth in Section 12.01 hereof.
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 the product of (a)
1.25% and (b) the outstanding principal balance of each such Mortgage Loan.
Notwithstanding and in addition to the foregoing, in the event that
(i) a Mortgage Loan becomes delinquent for a period of 91 days or more (a
"Delinquent Mortgage Loan") or (ii) a Mortgage Loan becomes an REO Property, the
Purchaser may at its election terminate this Agreement with respect to such
Delinquent Mortgage Loan or REO Property without payment of a termination fee
therefor, upon 15 days' written notice to the Company, provided, that upon
termination of the Agreement with respect to such Delinquent Mortgage Loan or
REO Property, the Purchaser shall reimburse the Company for all outstanding
Servicing Advances or Servicing Fees.
- 54 -
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
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, and 3.06, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03, 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.
- 55 -
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.
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:
National City Mortgage Co.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxxx
with a copy to:
National City Mortgage Co.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
National City Mortgage Co.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: X. Xxxxxxx Case
- 56 -
or such other address as may hereafter be furnished to the Purchaser in
writing by the Company;
(ii) if to Purchaser:
Xxxxxx Brothers Bank.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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.
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 Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
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
- 57 -
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 related Closing Date, the Company hereby agrees
that it will not take any action or permit or cause any action to be taken by
any of its agents or affiliates, or by any independent contractors on the
Company's behalf, to personally, by telephone or mail, solicit the borrower or
obligor under any Mortgage Loan for any purpose whatsoever, including to
refinance a Mortgage Loan, in whole or in part, without the prior written
consent of the Purchaser. It is understood and agreed that all rights and
benefits relating to the solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the related Closing Date and the
Company shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by the Company or any affiliate of the Company which are directed to
the general public at large, including, without limitation, mass mailings based
on commercially acquired mailing lists, or the Company's customer portfolio, and
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 12.11.
- 58 -
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: _______________________________
NATIONAL CITY MORTGAGE CO.
By: __________________________________
Name: ________________________________
Title: _______________________________
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 federal savings association 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
National City Mortgage Co. 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"):
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: "National City Mortgage Co.,
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: "National City Mortgage Co., formerly known as
[previous name]").
The original of any guarantee executed in connection with the Mortgage
Note (if any).
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 related 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.
The originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
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
B-1
by the Company in a merger, the Assignment of Mortgage must be made
by "National City Mortgage Co., 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 "National City Mortgage Co., formerly known
as [previous name]."
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.
The original PMI Policy, LPMI Policy or certificate of insurance, where
required pursuant to the Agreement.
The original mortgagee policy of title insurance or attorney's opinion of
title and abstract of title.
Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
Residential loan application.
Mortgage Loan closing statement.
Verification of employment and income.
Verification of acceptable evidence of source and amount of downpayment.
Credit report on the Mortgagor.
B-2
Residential appraisal report.
Photograph of the Mortgaged Property.
Survey of the Mortgaged Property.
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.
All required disclosure statements.
If available, termite report, structural engineer's report, water
potability and septic certification.
Sales contract.
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 related 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"):
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 "National City
Mortgage Co., 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 "National City Mortgage Co., formerly
known as [previous name]";
the original of any guarantee executed in connection with the
Mortgage Note;
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;
the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon;
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 "National City Mortgage Co., 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 "National
City Mortgage Co., formerly known as [previous name];"
the originals of all intervening assignments of mortgage with
evidence of recording thereon, including warehousing assignments, if any;
the original PMI or LPMI Policy or certificate, if private mortgage
guaranty insurance is required pursuant to the Agreement;
the original mortgagee title insurance policy;
C-4-1
the original of any security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage; and
such other documents as the Purchaser may require.
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
National City Mortgage Co. 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 August 1, 2001,
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1.
Title of Account: National City Mortgage Co. in trust for the Purchaser,
Group No. 2001-1
Account Number: _________________
Address of office or branch
of the Company at
which Account is maintained: ________________________________________
________________________________________
________________________________________
________________________________________
NATIONAL CITY MORTGAGE CO.
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 August 1, 2001, Conventional Residential Fixed Rate Mortgage Loans,
Group No. 2001-1(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 "National City Mortgage Co., in trust for the
Purchaser - Conventional Residential Fixed Rate Mortgage Loans - Group No.
2001-1." 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.
NATIONAL CITY MORTGAGE CO.
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_
National City Mortgage Co. 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 August 1, 2001,
Conventional Residential Fixed Rate Mortgage Loans, Group No. 2001-1.
Title of Account: "National City Mortgage Co. in trust for the Purchaser,
Group No. 2001-1, and various Mortgagors."
Account Number: _____________________
Address of office or branch
of the Company at
which Account is maintained: ________________________________________
________________________________________
________________________________________
________________________________________
NATIONAL CITY MORTGAGE CO.
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 May 1, 2001, Conventional Residential Fixed Rate Mortgage Loans,
Group No. 2001-1 (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 "National City Mortgage Co., in trust for the
Purchaser - Conventional Residential Fixed Rate Mortgage Loans - Group No.
2001-1." 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.
NATIONAL CITY MORTGAGE CO.
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:
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
Fixed Rate Mortgage Loans, Group No. 2001-1 (the "Seller's Warranties and
Servicing Agreement"), dated as of August 1, 2001, by and between Xxxxxx
Brothers Bank, FSB (the "Purchaser"), and National City Mortgage Co. (the
"Company"), and the Mortgage Loans Group No. 2001-1 delivered thereunder by the
Company to the Assignor.
The Assignor warrants and represents to, and covenants with, the
Assignee that:
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;
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;
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, the Custodial 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
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
G-1
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.
The Assignee warrants and represents to, and covenants with, the
Assignor and the Company that:
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 the Custodial Agreement, 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;
The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
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;
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;
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;
The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Company;
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
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.
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
UNDERWRITING GUIDELINES
[INTETIONALLY OMMITED]
G-1
EXHIBIT I
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Xxxxxx Brothers Bank FSB,
(the "Purchaser") as the Purchaser under that --------- certain Seller's
Warranties and Servicing Agreement dated as of August 1, 2001, (the
"Agreement"), does hereby contract with National City Mortgage Co. (the
"Company") as Company under the Agreement, for the servicing responsibilities
related to the Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto. The Company hereby accepts the servicing responsibilities transferred
hereby and on the date hereof assumes all servicing responsibilities related to
the Mortgage Loans identified on the attached Mortgage Loan Schedule all in
accordance with the Agreement. The contents of each Servicing File required to
be delivered to service the Mortgage Loans pursuant to the Agreement have been
or shall be delivered to the Company by the Purchaser in accordance with the
terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement
hereby, the related Closing Date shall be _________________.
All other terms and conditions of this transaction shall be governed
by the Agreement.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
G-1
This Acknowledgment Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Purchaser and the Company have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
PURCHASER:
XXXXXX BROTHERS BANK FSB
By:_____________________________________
Name:___________________________________
Title:__________________________________
SELLER:
NATIONAL CITY MORTGAGE CO.
By:_____________________________________
Name:___________________________________
Title:__________________________________
AMENDMENT NO. 1
TO THE SELLERS WARRANTIES AND SERVICING AGREEMENT
This is Amendment Xx. 0 (xxx "Xxxxxxxxx Xx. 0"), dated as November
21, 2001 (the "Amendment Date"), by and between Xxxxxx Brothers Bank, FSB (the
"Purchaser"), and National City Mortgage Co. (the "Seller") to that certain
Sellers Warranties and Servicing Agreement dated as of August 1, 2001 by and
between the Seller and the Purchaser (the "Existing Servicing Agreement", as
amended by this Amendment 1, the "Servicing Agreement").
WITNESSETH
WHEREAS, the Seller and the Purchaser have agreed, subject to the
terms and conditions of this Amendment No. 1 that the Existing Servicing
Agreement be amended to reflect certain agreed upon revisions to the terms of
the Existing Servicing Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Servicing Agreement is hereby amended as follows:
(1) The front cover of the Existing Servicing Agreement is hereby amended by
deleting the next to last line thereof in its entirety and replacing it
with the following:
Conventional Residential Fixed and Adjustable Rate Mortgage
Loans
(2) The first paragraph of the test of the Existing Servicing Agreement is
hereby amended by deleting the existing paragraph in its entirety and
replacing it with the following:
This is a Seller's Warranties and Servicing Agreement for
conventional fixed and adjustable rate residential first lien
mortgage loans, dated and effective as of August 1, 2001, and is
executed between Xxxxxx Brothers Bank, FSB, as purchaser (the
"Purchaser"), and National City Mortgage Co., as seller and servicer
(the "Company").
(3) Article I of the Existing Servicing Agreement is hereby amended by adding
the following definitions:
ARM Mortgage Loan: A Mortgage Loan pursuant to which the
interest rate shall be adjusted from time to time in accordance with
the related Mortgage Note.
Gross Margin: With respect to each ARM Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage which
amount is added to the Index in accordance with the terms of the
related Mortgage Note to determine, on each Interest Rate Adjustment
Date, the Mortgage Interest Rate for such Mortgage Loan.
Index: With respect to ARM Mortgage Loans on each Interest
Rate Adjustment Date the applicable index shall be either six month
LIBOR or one year Constant Maturity Index, as set forth in the
related Mortgage Note.
Interest Rate Adjustment Date: With respect to each ARM
Mortgage Loan the date on which an adjustment to the Mortgage
Interest Rate on a Mortgage Note becomes effective.
Lifetime Rate Cap: With respect to each ARM Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute
maximum Mortgage Interest Rate thereunder.
Periodic Rate Cap: With respect to each ARM Mortgage Loan, 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.
Pool 1 Mortgage Loans: Fixed and adjustable rate first lien
Mortgage Loans.
Pool 1a Mortgage Loans: Fixed rate Pool 1 Mortgage Loans.
Pool 1b Mortgage Loans: Adjustable rate Pool 1 Mortgage Loans.
Pool 2 Mortgage Loans: Fixed rate second lien Mortgage Loans.
(4) Article I of the Existing Servicing Agreement is hereby amended by
deleting the existing definitions of Mortgage Interest Rate, Mortgage Loan
Schedule and Qualified Substitute Mortgage Loan in their entirety, and
replacing them with the following language:
Mortgage Interest Rate: With respect to an ARM Mortgage Loan,
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.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Exhibit A, such schedule setting forth the following
information with respect to each Mortgage Loan: (1) the Seller's
Mortgage Loan identifying number; (2) the Mortgagor's and
Co-Mortgagor's name; (3) the street address of the Mortgaged
Property including the city, state, county, and the zip code; (4)
the lot, block, and section numbers of the Mortgaged Property; (5) a
code indicating whether the loan was originated through a
correspondent, retail, or wholesale channel; (6) the broker
identification number; (7) a code indicating whether the Mortgaged
Property is a single family residence, a 2-4 family dwelling, a PUD,
a townhouse or a unit in a high-rise or low-rise condominium
project; (8) the year in which the Mortgaged Property was built; (9)
a code indicating whether the Mortgage Loan is a 3/1, 5/1 or 7/1 ARM
Mortgage Loan; (36) with respect to each ARM Mortgage Loan, the
Index and payment and interest rate adjustment frequencies; (37)
with respect to each ARM Mortgage Loan, the initial Interest Rate
Adjustment Date; (38) with respect to each ARM Mortgage Loan, the
initial payment adjustment date; (39) the next Interest Rate
Adjustment Date; (40) with respect to each ARM Mortgage Loan, the
next payment adjustment date; (41) with respect to each ARM Mortgage
Loan, the Gross Margin; (42) with respect to each ARM Mortgage Loan,
the minimum Mortgage Interest Rate under the terms of the Mortgage
Note; (43) with respect to each ARM Mortgage Loan, the maximum
Mortgage Interest Rate under the terms of the Mortgage Note; (44)
with respect to each ARM Mortgage Loan, the Mortgage Interest Rate
adjustment cap at the initial Interest Rate Adjustment Date; (45)
with respect to each ARM Mortgage Loan, the Mortgage Interest Rate
adjustment cap at all subsequent Interest Rate Adjustment Dates;
(46) with respect to each ARM Mortgage Loan, the Lifetime Mortgage
Interest Rate Cap; (47) the rounding provisions under the terms of
the Mortgage Note; (48) the lookback provisions (# of days) under
the terms of the Mortgage Note; (9) the number of units for all
Mortgaged Properties; (10) the number of bedrooms and rents by unit;
(11) the original months to maturity or the remaining months to
maturity from the Cut-off Date, in any case based on the original
amortization schedule, and if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (14)
a code indicating the lien status of the Mortgage Loan; (15) the
Loan to Value Ratio at origination; (16) the Combined Loan to Value
Ratio at origination, if applicable; (17) the Appraised Value and
purchase price, if applicable, of the Mortgaged Property; (18) the
Mortgage Interest Rate at the time of origination; (19) the Mortgage
Interest Rate as of the Cut-off Date; (20) the application date of
the Mortgage Loan; (21) the loan approval/commitment date; (21) the
origination date of the Mortgage Loan; (22) the first payment date
of the Mortgage Loan; (23) the stated maturity date of the Mortgage
Loan; (24) the amount of the Monthly Payment as of the Cut-off Date;
(25) the amount of the Monthly Payment at the time of origination;
(26) the next due date of the Mortgage Loan; (27) a twelve month
history for the Mortgage Loan and the number of times thirty, sixty,
and ninety days delinquent in the past twelve months; (28) a code
indicating the payment status of the Mortgage Loan (i.e. bankruptcy,
foreclosure, REO); (29) a twelve month history for the prior
Mortgage Loan and the number of times thirty, sixty, and ninety days
delinquent in the past twelve months; (30) the original principal
amount of the Mortgage Loan; (31) the original principal amount of
any senior Mortgage Loans; (32) the actual principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date, after
deduction of payments of principal actually collected on or before
the Cut-off Date; (33) the scheduled principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date; after
deduction of payments of principal due on or before the Cut-off
Date, whether or not collected, if applicable; (34) the Mortgage
Loan purpose type; (35) the occupancy status of the Mortgaged
Property at the time of origination (49) the Mortgagor's and
Co-Mortgagor's FICO score; (50) a code indicating the mortgage
insurance provider and percent of coverage, if applicable; (51) the
mortgage insurance certificate number; a code indicating the method
of payment for mortgage insurance premiums and cost (Lender Paid
MI), if applicable; (52) the loan documentation type; (53) the
back-end debt to income ratio; (54) number of Mortgagors; (55)
Mortgagor Social Security Number; (56) co-Mortgagor Social Security
Number; (57) Mortgagor date of birth; (58) co-Mortgagor date of
birth; (59) Mortgagor gender; (60) co-Mortgagor gender; (61)
Mortgagor race; (62) co-Mortgagor race; (63) combined annual income;
(64) a code indicating first time buyer; (65) a code indicating
whether the Mortgage Loan has a prepayment penalty; (66) a code
indicating the prepayment penalty term and the prepayment penalty
amount of the Mortgage Loan, if any; (67) the monthly Servicing Fee,
if provided; (68) the tax service contract provider; (69) the flood
insurance service contract provider; (70) the monthly tax and
insurance payment; (71) the escrow balance as of the Cut-Off Date;
and (72) MIN #, if applicable;. With respect to the Mortgage Loans
in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal
balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
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) be of the same type as the Deleted
Mortgage Loan (e.g. fixed rate Mortgage Loan vs. ARM Mortgage Loan);
(iii) have a Mortgage Interest Rate not less than and not more than
2% greater than the Mortgage Interest Rate of the Deleted Mortgage
Loan; (iv) have a remaining term to maturity not greater than and
not more than one year less than that of the Deleted Mortgage Loan;
(v) with respect to ARM Mortgage Loans, have a Gross Margin not less
than that of the Deleted Mortgage Loan; (vi) with respect to ARM
Mortgage Loans, have a Lifetime Rate Cap not less than that of the
Deleted Mortgage Loan; (vii) with respect to ARM Mortgage Loans,
have a Periodic Rate Cap not less than that of the Deleted Mortgage
Loan; (viii) with respect to ARM Mortgage Loans, have the same Index
as the Deleted Mortgage Loan; (ix) with respect to ARM Mortgage
Loans, have the same Mortgage Interest Rate adjustment frequency as
the Deleted Mortgage Loan; (x) have a Credit Grade not less than
that of the Deleted Mortgage Loans; (xi) comply with each
representation and warranty set forth in Sections 3.01 and 3.02; and
(xii) be a REMIC Eligible Mortgage Loan.
(5) Section 3.02(i) of the Existing Servicing Agreement is hereby amended by
deleting the existing language in its entirety, and replacing it with the
following language:
(i) Selection Process. The Mortgage Loans were selected from
among the outstanding fixed and adjustable rate one- to four-family
mortgage loans in the Company's portfolio at the related Closing
Date as to which the representations and warranties set forth in
Section 3.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(6) Section 3.02(p) of the Existing Servicing Agreement is hereby amended by
deleting the existing language in its entirety, and replacing it with the
following language:
(p) Title Insurance. The Mortgage Loan is covered by 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, as applicable, of the
Mortgage and, with respect to ARM Mortgage Loans, against any loss
by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage providing for
adjustment in the Mortgage Interest Rate and Monthly Payment, in
each case, in the original principal amount of the Mortgage Loan,
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;
(7) Section 3.02(t) of the Existing Servicing Agreement is hereby amended by
deleting the existing language in its entirety, and replacing it with the
following language:
(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 which is supervised and examined by a Federal or State
authority. The Mortgage Interest Rate is (a) with respect to fixed
rate Mortgage Loans, the fixed interest rate set forth in the
Mortgage Note and (b) with respect to ARM Mortgage Loans adjusted
semi-annually on each Interest Rate Adjustment Date to equal the
Index plus the Gross Margin, subject to the Mortgage Interest 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, and except for any
balloon Mortgage Loan, 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.
(8) Section 3.02(hh) of the Existing Servicing Agreement is hereby amended by
deleting the existing language in its entirety, and replacing it with the
following language:
(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
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 in an amount sufficient to pay for
every item which remains unpaid and which has been assessed but is
not yet due and payable. 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.;
(9) Section 3.02(xx) of the Existing Servicing Agreement is hereby amended by
deleting the existing language in its entirety, and replacing it with the
following language:
(xx) Conversion to Fixed Interest Rate. With respect to each
ARM Mortgage Loan; the Mortgage Loan does not contain a provision
permitting or requiring conversion to a fixed interest rate Mortgage
Loan.
(10) The Existing Servicing Agreement is hereby amended by adding the following
language as a new Section 4.20:
Section 4.20 Notification of Adjustments.
With respect to each ARM 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.
(11) The first sentence of Section 7.01 of the Existing Servicing Agreement is
hereby amended by deleting the existing language in its entirety, and
replacing it with the following language:
The Purchaser and the Company agree that with respect to some
or all of the Mortgage Loans, from time to time, the Purchaser
shall:
(12) Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions precedent
shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have received
the following, each of which shall be satisfactory to the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in
compliance with all the representations and warranties set forth in
Section 3.01 of the Servicing Agreement, as amended by this
Amendment No. 1, on its part to be observed or performed, (ii) no
default shall have occurred and be continuing on such date.
(13) Except as expressly amended and modified by this Amendment, the Existing
Servicing Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
(14) This Amendment No. 1 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.
(15) This Amendment No. 1 may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement.
(16) This Amendment No. 1 shall inure to the benefit of and be binding upon the
Purchaser and the Sellers under the Existing Servicing Agreement, and
their respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties 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
Purchaser
By:______________________________
Name:____________________________
Title:___________________________
NATIONAL CITY MORTGAGE CO.
Seller
By:______________________________
Name:____________________________
Title:___________________________
AMENDMENT NO. 2
TO THE SELLERS WARRANTIES AND SERVICING AGREEMENT
This is Amendment No. 2 (the "Amendment No. 2"), dated as of October
25, 2002 (the "Amendment Date"), by and between Xxxxxx Brothers Bank, FSB (the
"Purchaser"), and National City Mortgage Co. (the "Seller") to that certain Flow
Sellers Warranties and Servicing Agreement dated as of August 1, 2001 by and
between the Seller and the Purchaser as amended by Amendment No. 1 to the
Sellers Warranties and Servicing Agreement dated as of November 21, 2001 (the
"Existing Servicing Agreement", as amended by this Amendment 2, the "Servicing
Agreement").
WITNESSETH
WHEREAS, the Seller and the Purchaser have agreed, subject to the
terms and conditions of this Amendment No. 2 that the Existing Servicing
Agreement be amended to reflect certain agreed upon revisions to the terms of
the Existing Servicing Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Servicing Agreement is hereby amended as follows:
(17) Section 3.02(oo) of the Existing Purchase Agreement is hereby amended by
deleting the section in its entirety and replacing it with the following
language:
(oo) Predatory Lending Regulations; High Cost Loans. None of
the Mortgage Loans are classified as (a) "high cost" loans under the
Home Ownership and Equity Protection Act of 1994 or (b) "high cost,"
"threshold," "covered" or "predatory" loans under any applicable
state, federal or local law.
(18) Section 3.02 of the Existing Purchase Agreement is hereby amended by
adding the following language as a new Section 3.02(xx):
(xx) Credit Reporting. For each Mortgage Loan, the Company or
its designee has accurately and fully furnished, in accordance with
the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information on its borrower credit files to
each of the following credit repositories: Equifax Credit
Information Services, Inc., Trans Union, LLC and Experian
Information Solution, Inc., on a monthly basis
(19) The Existing Servicing Agreement is hereby amended by adding the following
language as a new Section 4.20:
Section 4.20 Credit Reporting For each Mortgage Loan, the Company
shall accurately and fully furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and
complete information on its borrower credit files to each of the
following credit repositories: Equifax Credit
Information Services, Inc., TransUnion, LLC and Experian Information
Solution, Inc. on a monthly basis.
(20) Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions precedent
shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have received
the following, each of which shall be satisfactory to the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in
compliance with all the representations and warranties set forth in
Section 3.01 of the Servicing Agreement, as amended by this
Amendment No. 2, on its part to be observed or performed, (ii) no
default shall have occurred and be continuing on such date.
(21) Except as expressly amended and modified by this Amendment, the Existing
Servicing Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
(22) This Amendment No. 2 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.
(23) This Amendment No. 2 may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement.
(24) This Amendment No. 2 shall inure to the benefit of and be binding upon the
Purchaser and the Seller under the Existing Servicing Agreement, and their
respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties 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
Purchaser
By:______________________________
Name:____________________________
Title:___________________________
NATIONAL CITY MORTGAGE CO.
Seller
By:______________________________
Name:____________________________
Title:___________________________
AMENDMENT NO. 3
TO THE SELLERS WARRANTIES AND SERVICING AGREEMENT
This is Amendment No. 3 (the "Amendment No. 3"), dated as of January
13, 2003 (the "Amendment Date"), by and between Xxxxxx Brothers Bank, FSB (the
"Purchaser"), and National City Mortgage Co. (the "Seller") to that certain Flow
Sellers Warranties and Servicing Agreement dated as of August 1, 2001 by and
between the Seller and the Purchaser as amended by Amendment No. 2 to the
Sellers Warranties and Servicing Agreement dated as of October 25, 2002 (the
"Existing Servicing Agreement", as amended by this Amendment 3, the "Servicing
Agreement").
WITNESSETH
WHEREAS, the Seller and the Purchaser have agreed, subject to the
terms and conditions of this Amendment No. 3 that the Existing Servicing
Agreement be amended to reflect certain agreed upon revisions to the terms of
the Existing Servicing Agreement.
Accordingly, the Seller and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Servicing Agreement is hereby amended as follows:
(25) Section 4.22 of the Existing Servicing Agreement is hereby amended by
deleting the section in its entirety and replacing it with the following
language:
Section 4.22 Customer Information
The Company agrees that it shall comply with all applicable
laws and regulations regarding the privacy or security of Customer
Information shall maintain appropriate administrative, technical and
physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security
measures designed to meet the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616,
and the rules promulgated thereunder. For purposes of this Section,
"Customer Information" means any personal information concerning a
Mortgagor that is disclosed by one party to this Agreement to the
other.
(26) Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions precedent
shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have received
the following, each of which shall be satisfactory to the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in
compliance with all the representations and warranties set forth in
Section 3.01 of the Servicing Agreement, as amended by this
Amendment No. 3, on its part to be observed or performed, (ii) no
default shall have occurred and be continuing on such date.
(27) Except as expressly amended and modified by this Amendment, the Existing
Servicing Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
(28) This Amendment No. 3 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.
(29) This Amendment No. 3 may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement.
(30) This Amendment No. 3 shall inure to the benefit of and be binding upon the
Purchaser and the Seller under the Existing Servicing Agreement, and their
respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties 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
Purchaser
By:______________________________
Name:____________________________
Title:___________________________
NATIONAL CITY MORTGAGE CO.
Seller
By:______________________________
Name:____________________________
Title:___________________________
