WILSHIRE CREDIT CORPORATION, as Servicer OCWEN LOAN SERVICING, LLC, as Servicer PNC BANK, N.A., as Servicer SELECT PORTFOLIO SERVICING, INC., as Special Servicer HOME EQUITY MORTGAGE TRUST 2006-2, as Issuer and as Indenture Trustee SERVICING AGREEMENT...
WILSHIRE
CREDIT CORPORATION,
as
Servicer
OCWEN
LOAN SERVICING, LLC,
as
Servicer
PNC
BANK,
N.A.,
as
Servicer
SELECT
PORTFOLIO SERVICING, INC.,
as
Special Servicer
as
Issuer
and
U.S.
BANK
NATIONAL ASSOCIATION,
as
Indenture Trustee
______________________
Dated
as
of April 28, 2006
______________________
TABLE OF CONTENTS
ARTICLE
I
DEFINITIONS
|
Section
1.01
|
Definitions
|
|
Section
1.02
|
Other
Definitional Provisions
|
|
Section
1.03
|
Interest
Calculations
|
ARTICLE
II
Representations
and Warranties
|
Section
2.01
|
Representations
and Warranties Regarding the Servicers and the Special
Servicer
|
|
Section
2.02
|
Representations
and Warranties of the Issuer
|
|
Section
2.03
|
Breaches
of Representations and Warranties; Notice
|
ARTICLE
III
Administration
and Servicing of Loans
|
Section
3.01
|
The
Servicers
|
|
Section
3.02
|
Collection
of Certain Loan Payments.
|
|
Section
3.03
|
Withdrawals
from the Custodial Accounts
|
|
Section
3.04
|
Maintenance
of Hazard Insurance; Property Protection Expenses.
|
|
Section
3.05
|
Modification
Agreements
|
|
Section
3.06
|
Trust
Estate; Loan Files
|
|
Section
3.07
|
Realization
Upon Defaulted Loans; Loss Mitigation
|
|
Section
3.08
|
Issuer
and Indenture Trustee to Cooperate
|
|
Section
3.09
|
Servicing
Compensation and Master Servicing Compensation; Payment of Certain
Expenses by Servicers.
|
|
Section
3.10
|
Annual
Statement as to Compliance
|
|
Section
3.11
|
Assessments
of Compliance and Attestation Reports
|
|
Section
3.12
|
Access
to Certain Documentation and Information Regarding the
Loans
|
|
Section
3.13
|
Maintenance
of Certain Servicing Insurance Policies.
|
|
Section
3.14
|
Information
Required by the Internal Revenue Service and Reports of Foreclosures
and
Abandonments of Mortgaged Property
|
|
Section
3.15
|
Periodic
Filings.
|
|
Section
3.16
|
HELOC
Draws; Excluded Amounts.
|
|
Section
3.17
|
Duties
of the Credit Risk Manager.
|
|
Section
3.18
|
Limitation
Upon Liability of the Credit Risk Manager.
|
|
Section
3.19
|
Advances
by the Servicers.
|
|
Section
3.20
|
Indenture
Trustee to Act as servicer.
|
|
Section
3.22
|
Special
Serviced Loans.
|
|
Section
3.23
|
Advance
Facility.
|
ARTICLE
IV
Servicing
Certificates
|
Section
4.01
|
Statements
to Securityholders
|
ARTICLE
V
Payment
Account
|
Section
5.01
|
Payment
Account
|
ARTICLE
VI
The
Servicers and the Special Servicer
|
Section
6.01
|
Liability
of the Servicers and the Special Servicer
|
|
Section
6.02
|
Merger
or Consolidation of, or Assumption of the Obligations of the Special
Servicer or a Servicer
|
|
Section
6.03
|
Limitation
on Liability of the Servicers, the Special Servicer and
Others
|
|
Section
6.04
|
Special
Servicer and Servicers Not to Resign
|
|
Section
6.05
|
Delegation
of Duties
|
ARTICLE
VII
Default
|
Section
7.01
|
Servicing
Default
|
|
Section
7.02
|
Indenture
Trustee to Act; Appointment of Successor
|
|
Section
7.03
|
Notification
to Securityholders
|
ARTICLE
VIII
Miscellaneous
Provisions
|
Section
8.01
|
Amendment
|
|
Section
8.02
|
GOVERNING
LAW
|
|
Section
8.03
|
Notices
|
|
Section
8.04
|
Severability
of Provisions
|
|
Section
8.05
|
Third-Party
Beneficiaries
|
|
Section
8.06
|
Counterparts
|
|
Section
8.07
|
Effect
of Headings and Table of Contents
|
|
Section
8.08
|
Termination
|
|
Section
8.09
|
Certain
Matters Affecting the Indenture Trustee
|
|
Section
8.10
|
Owner
Trustee Not Liable for Loan Files
|
|
Section
8.11
|
Entire
Agreement.
|
| EXHIBIT A |
LOAN
SCHEDULE
|
| EXHIBIT B |
LIMITED
POWER OF ATTORNEY
|
| EXHIBIT C |
FORM
OF REQUEST FOR RELEASE
|
| EXHIBIT D-1 |
[RESERVED]
|
| EXHIBIT D-2 |
FORM
OF SERVICER CERTIFICATION
|
| EXHIBIT E |
CHARGED
OFF LOAN DATA REPORT
|
| EXHIBIT F | SERVICING CRITERIA TO BE ADDRESSED
IN
ASSESSMENT OF COMPLIANCE
|
| EXHIBIT G |
FORM
OF PNC REPORT TO CREDIT RISK MANAGER
|
| EXHIBIT H |
DATA
FIELDS FOR WILSHIRE SERVICED LOANS
TRANSFERRED
TO SPS
|
| EXHIBIT I |
FORM
10-D, FORM 8-K AND FORM 10-K REPORTING
RESPONSIBILITY
|
| EXHIBIT J |
FORM
OF SERVICING CERTIFICATE
|
| SCHEDULE I |
REPRESENTATIONS
AND WARRANTIES OF WILSHIRE
|
| SCHEDULE II |
REPRESENTATIONS
AND WARRANTIES OF OCWEN
|
| SCHEDULE III |
REPRESENTATIONS
AND WARRANTIES OF PNC
|
| SCHEDULE IV |
REPRESENTATIONS
AND WARRANTIES OF
SPS
|
|
|
This
is a
Servicing Agreement, dated as of April 28, 2006, among Wilshire Credit
Corporation as a servicer (“Wilshire”), Ocwen Loan Servicing, LLC as a servicer
(“Ocwen”), Select Portfolio Servicing, Inc. as special servicer (“SPS”), PNC
Bank, N.A. as a servicer (“PNC” and together with Wilshire, Ocwen and SPS, the
“Servicers”), Home Equity Mortgage Trust 2006-2 (the “Issuer”) and U.S. Bank
National Association as indenture trustee (in such capacity, the “Indenture
Trustee”).
W
I T N E
S S E T H T H A T:
WHEREAS,
pursuant to the terms of the Loan Purchase Agreement, DLJ Mortgage Capital,
Inc.
(in such capacity, the “Seller”) will sell to Asset Backed Securities
Corporation (in such capacity, the “Depositor”) the Loans together with the Loan
Files on the Closing Date and thereafter all Additional Balances created on
or
after the Cut-off Date;
WHEREAS,
the Depositor will sell the Loans and all of its rights under the Loan Purchase
Agreement to the Issuer, together with the Loan Files on the Closing Date and
thereafter all Additional Balances relating thereto created on or after the
Cut-off Date;
WHEREAS,
pursuant to the terms of the Trust Agreement, the Issuer will issue and transfer
the Certificates to the Depositor;
WHEREAS,
pursuant to the terms of the Indenture, the Issuer will issue and transfer
the
Notes to the Depositor; and
WHEREAS,
pursuant to the terms of this Servicing Agreement, each Servicer will service
the related Loans directly or through one or more Subservicers;
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
For all
purposes of this Servicing Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
contained in Appendix A to the Indenture dated as of April 28, 2006 (the
“Indenture”), among the Issuer and the Indenture Trustee, which is incorporated
by reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
Section
1.02 Other
Definitional Provisions.
(a)
All
terms defined in this Servicing Agreement shall have the defined meanings when
used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(b) As
used
in this Servicing Agreement and in any certificate or other document made or
delivered pursuant hereto or thereto, accounting terms not defined in this
Servicing Agreement or in any such certificate or other document, and accounting
terms partly defined in this Servicing Agreement or in any such certificate
or
other document, to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent
that
the definitions of accounting terms in this Servicing Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Servicing Agreement or in any such certificate or other document shall
control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Servicing Agreement shall refer to this Servicing Agreement as a whole and
not
to any particular provision of this Servicing Agreement; Section and
Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; and the term “including” shall mean “including without limitation;”
“or” shall include “and/or;” and the term “proceeds” shall have the meaning
ascribed thereto in the UCC.
(d) The
definitions contained in this Servicing Agreement are applicable to the singular
as well as the plural forms of such terms and to the masculine as well as the
feminine and neuter genders of such terms.
(e) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
Section
1.03 Interest
Calculations.
All
calculations of interest hereunder that are made in respect of the Principal
Balance of a Loan shall be made in accordance with the Mortgage Note. The
calculation of the Servicing Fee payable to each Servicer and the Master
Servicing Fee and the Credit Risk Manager Fee shall be made on the basis of
a
30-day month and a year assumed to consist of 360 days.
ARTICLE
II
Representations
and Warranties
Section
2.01 Representations
and Warranties Regarding the Servicers and the Special Servicer.
Each of
Wilshire, Ocwen, PNC and SPS makes the representations and warranties set forth
in Schedule I, II, III and IV, respectively, to the other parties hereto (other
than the other Servicers) and the Insurer, as of the Closing Date.
Section
2.02 Representations
and Warranties of the Issuer.
The
Issuer hereby represents and warrants to each Servicer and the Special Servicer
and for the benefit of the Indenture Trustee and Insurer, as of the Closing
Date:
(i) The
Issuer is a statutory trust duly formed and in good standing under the laws
of
the State of Delaware and has full power, authority and legal right to execute
and deliver this Servicing Agreement and to perform its obligations under this
Servicing Agreement and has taken all necessary action to authorize the
execution, delivery and performance by it of this Servicing Agreement;
and
(ii) The
execution and delivery by the Issuer of this Servicing Agreement and the
performance by the Issuer of its obligations under this Servicing Agreement
will
not violate any provision of any law or regulation governing the Issuer or
any
order, writ, judgment or decree of any court, arbitrator or governmental
authority or agency applicable to the Issuer or any of its assets. Such
execution, delivery, authentication and performance will not conflict with,
or
result in a breach or violation of, any mortgage, deed of trust, lease or other
agreement or instrument to which the Issuer is bound.
Section
2.03 Breaches
of Representations and Warranties; Notice.
Upon
the discovery by a Servicer, the Indenture Trustee, the Insurer or the Issuer
of
a breach of any of the representations and warranties made in the Loan Purchase
Agreement, in respect of any Loan which materially and adversely affects the
interests of the Securityholders or the Insurer, the party discovering such
breach or existence shall give prompt written notice to the other parties
hereto, the Seller, the Depositor, the Insurer and the Custodian. The related
Servicer, upon its discovery of such a breach or after notification of such
a
breach by another party, pursuant to the Loan Purchase Agreement, Custodial
Agreement or otherwise, shall promptly notify the Seller of such breach and
request that, pursuant to the terms of the Loan Purchase Agreement, the Seller
either (i) cure such breach, or in the case of a breach which has the effect
of
making a Loan fail to be a “qualified mortgage” within the meaning of
Section 860G of the Internal Revenue Code, in all material respects within
120 days from the date the Seller was notified of such breach or (ii) repurchase
such Loan from the Issuer at the price and in the manner set forth in
Section 1 or Section 3 of the Loan Purchase Agreement; provided that
the Seller shall, subject to compliance with all the conditions set forth in
the
Loan Purchase Agreement, have the option to substitute an Eligible Substitute
Loan or Loans for such Loan, provided that such substitution occurs within
two
years following the Closing Date. Payments due with respect to Eligible
Substitute Loans in the month of substitution shall not be transferred to the
Issuer and will be retained by the related Servicer and remitted by the related
Servicer to the Seller on the next succeeding Payment Date provided a payment
at
least equal to the applicable Monthly Payment has been received by the Issuer
for such month in respect of the Loan to be removed. The related Servicer shall
notify the Insurer and the Indenture Trustee and the Indenture Trustee shall
amend or cause to be amended the Loan Schedule to reflect the removal of such
Loan and the substitution of the Eligible Substitute Loans and the Indenture
Trustee shall promptly deliver the amended Loan Schedule to the Owner Trustee
and the Indenture Trustee.
Upon
receipt of the Repurchase Price, or upon completion of such substitution, the
related Servicer shall notify the related Custodian and then the related
Custodian shall, pursuant to the terms of the related Custodial Agreement,
deliver the Loan Files to such Servicer, together with all relevant endorsements
and assignments prepared by such Servicer which the Indenture Trustee shall
execute.
In
connection with the substitution of one or more Eligible Substitute Loans for
one or more Deleted Loans, the related Servicer shall determine the Substitution
Amount therefor (after application of the principal portion of the Monthly
Payments due in the month of substitution that are to be distributed to the
Custodial Account in the month of substitution) and notify the Seller of such
amount to be deposited into the Custodial Account pursuant to the Loan Purchase
Agreement.
ARTICLE
III
Administration
and Servicing of Loans
Section
3.01 The
Servicers.
(a)
Each
Servicer, severally and not jointly, either itself or through a subservicer,
shall service and administer the related Loans in accordance with this Servicing
Agreement and Accepted Servicing Practices, and shall have full power and
authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the related Servicer
may
deem necessary or desirable and consistent with the terms of this Servicing
Agreement and with Accepted Servicing Practices. Each Servicer shall service
and
administer the related Loans through the exercise of the same care that it
customarily employs for its own account. The Loans “related” to a Servicer and
for which such Servicer will be obligated to service hereunder are those Loans
for which the Loan Schedule identifies being serviced by such Servicer. In
no
event shall any Servicer have any responsibility or liability with respect
to
any of the Loans serviced by the other Servicers. Notwithstanding anything
in
this Agreement, any Subservicing Agreement or Credit Risk Management Agreement
to the contrary, none of Wilshire, Ocwen nor PNC shall have any duty or
obligation to enforce any Credit Risk Management Agreement to which it is not
a
party or to supervise, monitor or oversee the activities of the Credit Risk
Manager under its Credit Risk Management Agreement (if applicable) with respect
to any action taken or not taken by any other Servicer, pursuant to a
recommendation of the Credit Risk Manager. Consistent with the terms of this
Servicing Agreement and subject to the final sentence of this Section 3.01(a),
each Servicer may waive, modify or vary any term of any Loan or consent to
the
postponement of any such term or in any manner grant indulgence to any Mortgagor
if in the related Servicer’s reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Indenture Trustee, the Insurer or the Securityholders. Without limiting the
generality of the foregoing, each Servicer shall continue, and is hereby
authorized and empowered, to prepare, execute and deliver, all instruments
of
satisfaction or cancellation, or of partial or full release, discharge and
all
other comparable instruments, with respect to the related Loans and with respect
to the Mortgaged Properties. Notwithstanding the foregoing, no Servicer may
modify or permit any Subservicer to modify any Loan (including without
limitation any modification that would change the Mortgage Interest Rate,
forgive the payment of any principal or interest (unless in connection with
the
liquidation of the related Loan) or extend the final maturity date of such
Loan)
unless such Loan is in default or, in the judgment of the related Servicer,
such
default is reasonably foreseeable.
In
accordance with the standards of the preceding paragraph, each Servicer shall
advance or cause to be advanced funds as necessary for the purpose of effecting
the payment of taxes and assessments on any Mortgaged Property (to the extent
such Servicer has been notified that such taxes or assessments have not paid
by
the related Mortgagor or the owner or the servicer of the related first lien),
which advances shall be reimbursable as provided in Section 3.03; provided,
however, that each Servicer shall be required to advance only to the extent
that
such advances, in the good faith judgment of such Servicer, will be recoverable
by such Servicer out of Insurance Proceeds, Liquidation Proceeds, or otherwise
out of the proceeds of the related Loan; and provided, further, that such
payments shall be advanced within such time period required to avoid the loss
of
the Mortgaged Property by foreclosure of a tax or other lien. The costs incurred
by a Servicer, if any, in effecting the timely payments of taxes and assessments
on the Mortgaged Properties and related insurance premiums shall not, for the
purpose of calculating monthly distributions to the Securityholders, be added
to
the Principal Balances of the related Loans, notwithstanding that the terms
of
such Loans so permit. In the event PNC is so notified, PNC shall notify the
related Mortgagor at the time PNC receives notice that flood insurance on
the related Mortgaged Property will expire.
Each
Servicer is authorized and empowered by the Indenture Trustee, in its own name,
when the related Servicer believes it appropriate in its reasonable judgment
to
register any Loan on the MERS® System, or cause the removal from the
registration of any Loan on the MERS® System, to execute and deliver, on behalf
of the Indenture Trustee, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS. MERS will be named as holder of the loan solely
as
nominee for the Indenture Trustee and its successors and assigns.
The
Indenture Trustee will provide limited powers of attorney, substantially in
the
form of Exhibit B hereto, to each Servicer, prepared by each Servicer, to permit
each Servicer to act on behalf of the Indenture Trustee under this Agreement.
Each Servicer hereby indemnifies the Indenture Trustee for all costs and
expenses incurred by the Indenture Trustee in connection with the negligent
or
willful misuse of such power of attorney.
Each
Servicer shall fully report its borrower credit files related to the related
Loans to Equifax Credit Information Services, Inc., TransUnion LLC and Experian
in a timely manner. When required by law or it is otherwise prudent to do so,
a
Servicer may suspend credit reporting for any Loan.
Each
Servicer shall be entitled to rely on any electronic boarding data provided
by
any prior servicer of the related Loan or the originator of such Loan, and
no
Servicer shall be liable for any errors in any such information. Notwithstanding
the foregoing, in the event a Servicer is aware of a discrepancy between any
such electronic boarding data and the terms of the related Mortgage Note, such
Servicer shall rely conclusively on the terms set forth under the Mortgage
Note.
If
the
Mortgage relating to a Loan did not have a lien senior to the Loan on the
related Mortgaged Property as of the Cut-off Date, then the related Servicer,
in
such capacity, may not consent to the placing of a lien senior to that of the
Mortgage on the related Mortgaged Property. If the Mortgage relating to a Loan
had a lien senior to the Loan on the related Mortgaged Property as of the
Cut-off Date, then the related Servicer, in such capacity, may consent to the
refinancing of the prior senior lien, provided, that such refinancing conforms
to the related Servicer’s standard subordination underwriting guidelines which
shall at all times conform with Accepted Servicing Practices and the provisions
of this Servicing Agreement.
The
relationship of each Servicer (and of any successor to each Servicer as servicer
under this Servicing Agreement) to the Issuer under this Servicing Agreement
is
intended by the parties to be that of an independent contractor and not that
of
a joint venturer, partner or agent.
(b) Each
Servicer may enter into Subservicing Agreements with Subservicers for the
servicing and administration of certain of the related Loans. Each Subservicer
of a Loan shall be entitled to receive and retain, as provided in the related
Subservicing Agreement and in Section 3.02, the related Subservicing Fee
from payments of interest received on such Loan after payment of all amounts
required to be remitted to the related Servicer in respect of such Loan.
References in this Servicing Agreement to actions taken or to be taken by a
Servicer in servicing the Loans include actions taken or to be taken by a
Subservicer on behalf of such Servicer. Each Subservicing Agreement will be
upon
such terms and conditions as are not inconsistent with this Servicing Agreement
and as the related Servicer and the Subservicer have agreed. With the approval
of the related Servicer, a Subservicer may delegate its servicing obligations
to
third-party servicers, but such Subservicers will remain obligated under the
related Subservicing Agreements. Each Servicer and the related Subservicer
may
enter into amendments to the related Subservicing Agreements; provided,
however,
that
any such amendments shall not cause the related Loans to be serviced in a manner
that would be materially inconsistent with the standards set forth in this
Servicing Agreement. Each Servicer shall be entitled to terminate any
Subservicing Agreement in accordance with the terms and conditions thereof
and
without any limitation by virtue of this Servicing Agreement; provided,
however,
that in
the event of termination of any Subservicing Agreement by a Servicer or the
related Subservicer, such Servicer shall either act as servicer of the related
Loan or enter into a Subservicing Agreement with a successor Subservicer which
will be bound by the terms of the related Subservicing Agreement.
Notwithstanding any Subservicing Agreement, any of the provisions of this
Servicing Agreement relating to agreements or arrangements between a Servicer
or
a Subservicer or reference to actions taken through a Subservicer or otherwise,
each Servicer shall remain obligated and liable to the Indenture Trustee, the
Insurer and the Issuer for the servicing and administering of the related Loans
in accordance with the provisions of this Section 3.01 without diminution
of such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer and to the
same extent and under the same terms and conditions as if such Servicer alone
were servicing and administering the related Loans. Each Servicer shall be
entitled to enter into any agreement with a Subservicer for indemnification
of
such Servicer and nothing contained in this Servicing Agreement shall be deemed
to limit or modify such indemnification.
From
and
after the Closing Date, each Servicer 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 such Servicer’s behalf, to personally, by
telephone, by mail, or electronically by e-mail or through the internet or
otherwise, solicit the borrower or obligor under any related Loan to refinance
the Loan, in whole or in part, without the prior written consent of the Issuer.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors to refinance any Loans 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
Issuer on the Closing Date and no Servicer shall take any action to undermine
these rights and benefits. Notwithstanding the foregoing, it is understood
and
agreed that the following shall not constitute solicitation under this Section
3.01: (i) promotions undertaken by a Servicer or any affiliate of a Servicer
which are directed to the general public at large, or segments thereof, provided
that no segment shall consist primarily of the borrowers or obligors under
the
related Loans, including, without limitation, mass mailing based on commercially
acquired mailing lists, newspaper, radio and television advertisements, (ii)
promotions undertaken by a Servicer based on such Servicer’s own independent
customer databases and (iii) responding to a request unsolicited by such
Servicer and initiated by a Mortgagor or obligor under any Loan relating to
refinancing. This Section 3.01 shall not be deemed to preclude a Servicer
or any of its affiliates from soliciting any Mortgagor for any other financial
products or services. Each Servicer shall use its efforts required by applicable
law to prevent the sale of the name of any Mortgagor to any Person who is not
an
affiliate of such Servicer.
In
the
event that the rights, duties and obligations of a Servicer are terminated
hereunder, any successor to the related Servicer in its sole discretion may,
to
the extent permitted by applicable law, terminate the existing Subservicing
Agreement with any Subservicer in accordance with the terms of the applicable
Subservicing Agreement or assume the terminated Servicer’s rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As
part
of its servicing activities hereunder, each Servicer, for the benefit of the
Securityholders, shall use reasonable efforts to enforce the obligations of
each
Subservicer under the related Subservicing Agreement, to the extent that the
non-performance of any such obligation would have a material adverse effect
on a
Loan. Such enforcement, including, without limitation, the legal prosecution
of
claims, termination of Subservicing Agreements and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the related Servicer would employ in its good faith business
judgment and require were it the owner of the related Loans and which are normal
and usual in its general mortgage servicing activities. Each Servicer shall
pay
the costs of such enforcement at its own expense, and shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement to
the
extent, if any, that such recovery exceeds all amounts due in respect of the
related Loan or (ii) from a specific recovery of costs, expenses or attorneys
fees against the party against whom such enforcement is directed.
Each
Servicer shall comply with the obligations set forth in Section 11.01 of the
Indenture, subject to Section 6.03 hereof.
Section
3.02 Collection
of Certain Loan Payments.
(a) Each
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the related Loans, and shall, to the extent such
procedures are consistent with this Servicing Agreement, Accepted Servicing
Practices and any related insurance policy, follow such collection procedures
as
it would employ in its good faith business judgment and which are normal and
usual in its general mortgage servicing activities and consistent with the
procedures that such Servicer employs in servicing all other Loans in its
servicing portfolio with characteristics similar to these of the related Loans.
Consistent with the foregoing, and without limiting the generality of the
foregoing, each Servicer may in its discretion waive any late payment charge,
prepayment charge or penalty interest or other fees which may be collected
in
the ordinary course of servicing such Loan. Subject to the final sentence of
Section 3.01(a), each Servicer may also extend the Due Date for payment due
on a
Loan, provided,
however,
that a
Servicer shall first determine that any such waiver or extension will not impair
the coverage of any related insurance policy or materially adversely affect
the
lien of the related Mortgage (except as described below) or the interests of
the
Securityholders or the Insurer. Consistent with the terms of this Servicing
Agreement (including the final sentence of Section 3.01(a)) and without limiting
the generality of the foregoing, each Servicer may also:
(i) waive,
modify or vary any term of any Loan;
(ii) consent
to the postponement of strict compliance with any such term or in any manner
grant indulgence to any Mortgagor;
(iii) arrange
with a Mortgagor a schedule for the payment of principal and interest due and
unpaid;
(iv) forgive
any portion of the amounts contractually owed under the Loan;
(v) reset
the
Due Date for the Loan; or
(vi) any
combination of the foregoing;
if
in the
related Servicer’s determination such waiver, modification, postponement or
indulgence, arrangement or other action referred to above is not materially
adverse to the interests of the Securityholders or the Insurer and is generally
consistent with such Servicer’s policies with respect to mortgage loans similar
to the related Loans. Such Loans will not be considered “delinquent” for the
purposes of the Basic Documents so long as the Mortgagor complies with the
terms
of such waiver, modification, postponement or indulgence.
(b) Each
Servicer shall establish a Custodial Account, which shall be an Eligible
Account, titled “[Servicer’s name], in trust for the Holders of Asset Backed
Securities Corporation, Home Equity Asset-Backed Securities, Series 2006-2” or,
if established and maintained by a Subservicer on behalf of the related
Servicer, “[Subservicer’s name], in trust for [Servicer’s name]” or
“[Subservicer’s name], as agent, trustee and/or bailee of principal and interest
custodial account for [Servicer’s name], its successors and assigns, for various
owners of interest in [Servicer’s name] mortgage-backed pools,” in which the
related Servicer shall deposit or cause to be deposited any amounts representing
payments and collections in respect of the Loans received by it subsequent
to
the Cut-off Date (other than in respect of the payments referred to in the
following paragraph) within two Business Days following receipt thereof (or
otherwise on or prior to the Closing Date or, in the case of payments that
are
not in the form of checks accompanied by the Servicer-provided billhead, within
five Business Days following receipt thereof), including the following payments
and collections received or made by it (without duplication):
(i) all
payments of principal or interest on the related Loans received by such Servicer
or by any Subservicer, net of any late fees or other amounts to be retained
by
the Servicer under this Servicing Agreement;
(ii) Net
Liquidation Proceeds including any related Foreclosure Profit, net of any late
fees or other amounts to be retained by such Servicer under this Servicing
Agreement;
(iii) any
amounts deposited by such Servicer in connection with any REO pursuant to the
Loan Purchase Agreement;
(iv) insurance
proceeds, other than Net Liquidation Proceeds, resulting from any insurance
policy maintained on a Mortgaged Property, except for insurance proceeds for
the
repair or restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with Accepted Servicing Practices, the related
Loan File or applicable law;
(v) all
Condemnation Proceeds affecting any Mortgaged Property which are not released
to
the Mortgagor in accordance with the Seller’s normal servicing procedures, the
documents in the Mortgage File or applicable law.
(vi) all
proceeds (including the Repurchase Price) of any Loans repurchased by the Seller
pursuant to the Loan Purchase Agreement, and all Substitution Adjustment Amounts
required to be deposited by the Seller in connection with the substitution
of an
Eligible Substitute Loan pursuant to the Loan Purchase Agreement;
(vii) any
amounts required to be deposited in the Custodial Account pursuant to
Section 3.08;
(viii) amounts
required to be paid by the related Servicer pursuant to Section
3.04;
(ix) all
Advances made by such Servicer pursuant to Section 3.19;
(x) with
respect to each Principal Prepayment on the Loans (other than the HELOCs),
the
Compensating Interest Payment, if any, for the related Prepayment Period;
and
(xi) all
Prepayment Charges.
provided,
however,
that
with respect to each Collection Period, each Servicer shall be permitted to
retain from payments in respect of interest on the related Loans, the related
Servicing Fee for such Collection Period. The foregoing requirements respecting
deposits to the related Custodial Account are exclusive, it being understood
that, without limiting the generality of the foregoing, a Servicer need not
deposit in the Custodial Account amounts representing fees (including annual
fees) or late charge penalties payable by Mortgagors (such amounts to be
retained as additional servicing compensation in accordance with
Section 3.09 hereof), or amounts received by the related Servicer for the
accounts of Mortgagors for application towards the payment of taxes, insurance
premiums, assessments and similar items. In the event any amount not required
to
be deposited in the Custodial Account is so deposited, the related Servicer
may
at any time withdraw such amount from the Custodial Account, any provision
herein to the contrary notwithstanding.
Each
Servicer may cause the institution maintaining the related Custodial Account
to
invest any funds in such Custodial Account in Permitted Investments, which
shall
mature not later than the next Servicer Remittance Date and which shall not
be
sold or disposed of prior to its maturity. Except as provided above, all income
and gain realized from any such investment shall inure to the benefit of the
related Servicer and shall be subject to its withdrawal or order from time
to
time. The amount of any losses incurred in respect of the principal amount
of
any such investments shall be deposited in the Custodial Account by the related
Servicer out of its own funds immediately as realized.
(c) Each
Servicer will require each related Subservicer to hold all funds constituting
collections on the related Loans, pending remittance thereof to such Servicer,
in one or more accounts meeting the requirements of an Eligible Account, and,
if
applicable, invested in Permitted Investments.
(d) Each
Servicer may, with the prior written consent of the Indenture Trustee, transfer
a Custodial Account to a different Eligible Account from time to
time.
Section
3.03 Withdrawals
from the Custodial Accounts.
Each
Servicer shall, from time to time as provided herein, make withdrawals from
the
related Custodial Account for the following purposes:
(i) in
the
case of PNC, from collections on the PNC Serviced Loans, (a) on a daily basis,
from Principal Collections, to pay to PNC the amount of any Additional Balances
as and when created during the related Collection Period and (b) to pay to
PNC
any Reimbursable Excluded Amounts (as defined in Section 3.16(b) hereof)
received during the related Collection Period;
(ii) on
each
Servicer Remittance Date preceding a Payment Date, the related Servicer shall
withdraw from the related Custodial Account the portion of the Interest
Remittance Amount and Principal Remittance Amount for such Payment Date
applicable to the Loans being serviced by such Servicer and, prior to the close
of business on such Servicer Remittance Date, deposit such amounts into the
Payment Account, to be distributed by the Indenture Trustee pursuant to Section
3.16(c) hereof and by the Paying Agent in accordance with and in the order
or
priority set forth in Section 3.05(a) of the Indenture for such Payment
Date, in accordance with the Servicing Certificate;
(iii) to
the
extent deposited to the related Custodial Account, to reimburse itself or the
related Subservicer for previously unreimbursed expenses incurred in maintaining
individual insurance policies pursuant to Section 3.04, or Liquidation
Expenses paid pursuant to Section 3.07 or otherwise reimbursable pursuant
to the terms of this Servicing Agreement (to the extent not payable pursuant
to
Section 3.09), such withdrawal right being limited to amounts received on
particular Loans which represent late recoveries of the payments for which
such
advances were made, or from related Liquidation Proceeds or the proceeds of
the
purchase of such Loan;
(iv) to
pay to
itself out of each payment received on account of interest on a related Loan
as
contemplated by Section 3.09, an amount equal to the related Servicing Fee
(to the extent not retained pursuant to Section 3.02), and to pay to any
Subservicer any Subservicing Fees not previously withheld by the
Subservicer;
(v) to
pay to
itself as additional servicing compensation any interest or investment income
earned on funds deposited in the Custodial Account that it is entitled to
withdraw pursuant to Section 3.02(b);
(vi) to
pay to
the Seller, with respect to any Loan or property acquired in respect thereof
that has been repurchased by or otherwise transferred to the Seller, all amounts
received thereon and not required to be distributed to Securityholders as of
the
date on which the related Repurchase Price is determined;
(vii) in
the
event that Liquidation Proceeds, if applicable, received in respect of a Loan
are not sufficient to cover all unreimbursed expenses for which the related
Servicer is entitled to reimbursement hereunder, such Servicer may reimburse
itself for such expenses out of funds held in the related Custodial
Account;
(viii) to
transfer funds to another Eligible Account in accordance with
Section 3.02(d) hereof;
(ix) to
withdraw any other amount deposited in the Custodial Account that was not
required to be deposited therein pursuant to Section 3.02;
(x) to
clear
and terminate the Custodial Account upon the termination of this Servicing
Agreement;
(xi) to
reimburse such Servicer for any unpaid Servicing Fees to which such Servicer
is
entitled under this Agreement, including (A) in connection with the termination
of the obligations of such Servicer, (B) any accrued and unpaid Servicing Fees
at the time a Loan becomes a Liquidated Loan or Charged Off Loan and (C) any
unpaid Servicing Fees not otherwise collected from Liquidation
Proceeds;
(xii) to
reimburse such Servicer for (A) unreimbursed Servicing Advances, such Servicer’s
right to reimbursement pursuant to this clause (A) with respect to any Loan
being limited to amounts received on such Loan which represent late payments
of
principal and/or interest (including, without limitation, Liquidation Proceeds
and Insurance Proceeds, amounts representing proceeds of other insurance
policies, if any, covering the related Mortgaged Property, rental and other
income from REO and proceeds of any purchase or repurchase of the related Loan
with respect to such Mortgage Loan) respecting which any such advance was made
and late recoveries of the payments for which such Servicing Advance was made
and (B) for unpaid Servicing Fees as provided in Section 3.07
hereof;
(xiii) to
reimburse such Servicer for unreimbursed Advances made by it, such right of
reimbursement pursuant to this subclause (xiii) being limited to amounts
received on the Loan(s) in respect of which any such Advance was made (including
without limitation, late recoveries of payments, Liquidation Proceeds and
Insurance Proceeds, amounts representing proceeds of other insurance policies,
if any, covering the related Mortgaged Property, rental and other income from
REO and proceeds of any purchase or repurchase of the related Loan to the extent
deposited in the Custodial Account);
(xiv) to
reimburse such Servicer for any Nonrecoverable Advance previously made from
collections or proceeds of any of the Loans serviced by such Servicer;
(xv) to
pay
itself any Prepayment Interest Excess; provided that in accordance with the
definition of “Prepayment Interest Excess,” the applicable Servicer shall only
be entitled to Prepayment Interest Excess with respect to any Loan and any
Payment Date if the related Principal Prepayment in full is deposited to the
related Custodial Account pursuant to Section 3.02(b)(i) hereof in the same
month as such Principal Prepayment in full is made, to be included with
distributions on such Payment Date;
(xvi) to
reimburse such Servicer for any Advances or Servicing Advances made with respect
to a delinquent Loan, which Loan has been modified by such Servicer in
accordance with the terms of this Agreement, such right of reimbursement being
limited to amounts received on the Loan so modified; and
(xvii) to
reimburse such Servicer for expenses incurred and reimbursable pursuant to
Section 6.03 hereof.
Since,
in
connection with withdrawals pursuant to clauses (i), (iii) and (iv), each
Servicer’s entitlement thereto is limited to collections or other recoveries on
the related Loan, such Servicer shall keep and maintain separate accounting,
on
a Loan by Loan basis, for the purpose of justifying any withdrawal from the
related Custodial Account pursuant to such clauses. Notwithstanding any other
provision of this Servicing Agreement, each Servicer shall be entitled to
reimburse itself for any previously unreimbursed expenses incurred pursuant
to
Section 3.07 or otherwise reimbursable pursuant to the terms of this
Servicing Agreement that such Servicer determines to be otherwise
nonrecoverable, by withdrawal from the related Custodial Account of amounts
on
deposit therein attributable to the related Loans on any Business Day prior
to
the Payment Date succeeding the date of such determination.
Section
3.04 Maintenance
of Hazard Insurance; Property Protection Expenses.
(a) Each
Servicer shall obtain and maintain a blanket policy insuring against losses
arising from fire and hazards covered under extended coverage on all of the
related Loans, which policy shall provide coverage in an amount equal to the
amount at least equal to the least of (i) the amount of the actual direct
physical damage to the Mortgaged Property, (ii) the amount of the outstanding
balance on the Loan or (iii) the actual market value of the structures built
on
the Mortgaged Property at the time of the loss. Each Servicer shall use its
best
efforts to monitor that a blanket policy is maintained as described in the
previous sentence in the same manner as it would for mortgage loans in its
own
portfolio. Any amounts collected by the related Servicer under any such policy
relating to a Loan shall be deposited in the related Custodial Account subject
to withdrawal pursuant to Section 3.03. 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 standard hazard insurance policy, and there
shall have been a loss which would have been covered by such policy, the related
Servicer shall deposit in the related 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 be deposited from the related Servicer’s own
funds, without reimbursement therefor. Upon request of the Indenture Trustee,
the related Servicer shall cause to be delivered to the Indenture Trustee a
certified true copy of such policy and a statement that such policy shall in
no
event be terminated or materially modified without 30 days’ prior written notice
to the Indenture Trustee. In connection with its activities as servicer of
such
Loans, the related Servicer agrees to present, on behalf of itself and the
Securityholders, claims under any such blanket policy.
(b) If,
upon
the origination of a Loan, the related Mortgaged Property was in an area
identified in the Federal Register by the Federal Emergency Management Agency
as
having special flood hazards, and flood insurance has been made available,
the
related Servicer shall cause to be maintained, to the extent required by the
related Loan File, a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage at least equal
to the lesser of (i) the unpaid Principal Balance of such Loan, (ii) the
full insurable value of such Mortgaged Property or (iii) the maximum amount
of
insurance available under the Flood Disaster Protection Act of 1973, as amended.
With respect to any REO, the related Servicer shall also maintain, if
applicable, flood insurance in an amount at least equal to the lesser of (i)
the
maximum insurable value of the improvements that are a part of such property
and
(ii) the Principal Balance owing on the related Loan at the time of foreclosure
or grant of deed in lieu of foreclosure plus accrued interest and related
Liquidation Expenses.
(c) Pursuant
to Section 3.02, any amounts collected by a Servicer under any insurance
policy maintained pursuant to this Section, other than amounts to be applied
to
the restoration or repair of Mortgaged Property or released to a Mortgagor
in
accordance with such Servicer’s normal servicing practices, shall be deposited
into the related Custodial Account, subject to withdrawal pursuant to
Section 3.03. Any cost incurred by a Servicer in maintaining any such
insurance shall be added to the amount owing under the related Loan where the
terms of the related Loan File so permit; provided, that the addition of any
such cost shall not be taken into account for purposes of calculating the
Principal Balance of such Loan. Such costs shall be recoverable by the related
Servicer pursuant to Section 3.03.
(d) No
Servicer shall be under any obligation to maintain or require any Mortgagor
to
maintain earthquake, title or other additional insurance, and shall be under no
obligation itself to maintain any such additional insurance on property acquired
in respect of any Loan, other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance.
Section
3.05 Modification
Agreements.
Each
Servicer or the related Subservicer, as the case may be, shall be entitled
to
(A) execute assumption agreements, modification agreements, substitution
agreements, and instruments of satisfaction or cancellation or of partial or
full release or discharge, or any other document contemplated by this Servicing
Agreement and other comparable instruments with respect to the Loans and with
respect to the Mortgaged Properties subject to the Mortgages (and the Issuer
and
the Indenture Trustee each shall promptly execute any such documents on request
of a Servicer) and (B) approve the granting of an easement thereon in favor
of
another Person, any alteration or demolition of the related Mortgaged Property
or other similar matters, in each case if it has determined, exercising its
good
faith business judgment in the same manner as it would if it were the owner
of
the related Loan, that the security for, and the timely and full collectability
of, such Loan would not be adversely affected thereby, ; provided, however,
that
such Servicer may not modify materially or permit any Subservicer to modify
any
Mortgage Loan (unless such Mortgage Loan is in default or, in the judgment
of
such Servicer, such default is reasonably foreseeable), including without
limitation any modification that would change the Mortgage Interest Rate,
forgive the payment of any principal or interest (unless in connection with
the
liquidation of the related Mortgage Loan or except in connection with Principal
Prepayments to the extent that such reamortization is not inconsistent with
the
terms of the Mortgage Loan), increase the principal balance, or extend the
final
maturity date of such Mortgage Loan, and, provided however, that in no event
shall such modification reduce the Mortgage Interest Rate on a Mortgage Loan
below the rate at which the Servicing Fee with respect to such Mortgage Loan
accrues. Any fee collected by a Servicer or the related Subservicer for
processing such request will be retained by such Servicer or such Subservicer
as
additional servicing compensation.
Section
3.06 Trust
Estate; Loan Files.
(a)
When
required by the provisions of this Servicing Agreement, the Issuer or the
Indenture Trustee shall execute instruments to release property from the terms
of the Trust Agreement, Indenture or Custodial Agreement, as applicable, or
convey the Issuer’s or the Indenture Trustee’s interest in the same, in a manner
and under circumstances which are not inconsistent with the provisions of this
Servicing Agreement. No party relying upon an instrument executed by the Issuer
or the Indenture Trustee as provided in this Section 3.06 shall be bound to
ascertain the Issuer’s or the Indenture Trustee’s authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
(b) If
from
time to time a Servicer shall deliver to the related Custodian copies of any
written assurance, assumption agreement or substitution agreement or other
similar agreement pursuant to Section 3.05, such Servicer may in accordance
with the terms of the related Custodial Agreement, cause the related Custodian
to determine if each of such documents purports to be an original executed
copy
(or a copy of the original executed document if the original executed copy
has
been submitted for recording and has not yet been returned) and, if so, shall
file such documents, and upon receipt of the original executed copy from the
applicable recording office or receipt of a copy thereof certified by the
applicable recording office shall file such originals or certified copies with
the Loan Files. If any such documents submitted by a Servicer do not meet the
above qualifications, (i) the related Servicer may, in accordance with the
terms
of the related Custodial Agreement, cause the related Custodian to promptly
return such documents to the related Servicer and (ii) the related Servicer
shall forward the correct documentation to the related Custodian.
(c) Upon
receipt of a request for release delivered via e-mail, substantially in the
form
attached hereto as Exhibit C, from a Servicer (each a “Request for Release”),
that indicates that a Loan has been the subject of a final payment or a
prepayment in full and the related Loan has been terminated or that
substantially all Liquidation Proceeds which have been determined by the related
Servicer in its reasonable judgment to be finally recoverable have been
recovered, and upon deposit to the related Custodial Account of such final
monthly payment, prepayment in full together with accrued and unpaid interest
to
the date of such payment with respect to such Loan or, if applicable,
Liquidation Proceeds, the Custodian shall promptly release and deliver by
overnight delivery the Loan Files to such Servicer pursuant to the terms of
the
related Custodial Agreement, no later than three (3) Business Days after such
Servicer’s request, along with such documents as such Servicer or the Mortgagor
may request to evidence satisfaction and discharge of such Loan and the
Indenture Trustee shall execute any documents delivered to it and reasonably
requested in connection therewith, without recourse, representation or warranty.
If from time to time and as appropriate for the servicing or foreclosure of
any
Loan, a Servicer requests the related Custodian to release the Loan Files and
delivers to the related Custodian a Request for Release to the related
Custodian, pursuant to the terms of the related Custodial Agreement the related
Custodian will release and deliver by overnight delivery the Loan Files to
the
related Servicer. The related Servicer shall return promptly to the related
Custodian the Loan Files when such Servicer’s need therefor no longer exists,
unless the related Loan has been liquidated (provided,
however,
that
the related Servicer shall indicate that such Loan has been or is to be
liquidated in the related Request for Release).
Section
3.07 Realization
Upon Defaulted Loans; Loss Mitigation.
(a)
With
respect to the Loans that come into and continue in default, the related
Servicer shall decide whether to (i) foreclose upon the Mortgaged
Properties securing such Loans, (ii) write off the unpaid principal balance
of
the Loans as bad debt, (iii) take a deed in lieu of foreclosure, (iv) accept
a
short sale (a payoff of the Loan for an amount less than the total amount
contractually owed in order to facilitate a sale of the Mortgaged Property
by
the Mortgagor) or permit a short refinancing (a payoff of the Loan for an amount
less than the total amount contractually owed in order to facilitate refinancing
transactions by the Mortgagor not involving a sale of the Mortgaged Property),
(v) arrange for a repayment plan, or (vi) agree to a modification in accordance
with this Servicing Agreement; in each case subject to the rights of any related
first lien holder; provided
that in
connection with the foregoing if the related Servicer has actual knowledge
that
any Mortgaged Property is affected by hazardous or toxic wastes or substances
and that the acquisition of such Mortgaged Property would not be commercially
reasonable, then the related Servicer will not cause the Issuer or the Indenture
Trustee to acquire title to such Mortgaged Property in a foreclosure or similar
proceeding. In connection with such decision, the related Servicer shall follow
such practices (including, in the case of any default on a related senior
mortgage loan, the advancing of funds to correct such default if deemed to
be
appropriate by the related Servicer) and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage servicing
activities; provided that the related Servicer shall not be liable in any
respect hereunder if such Servicer is acting in connection with any such
foreclosure or attempted foreclosure which is not completed or other conversion
in a manner that is consistent with the provisions of this Servicing Agreement.
In the event the related Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Indenture Trustee otherwise requests, an environmental inspection
or
review of such Mortgaged Property conducted by a qualified inspector shall
be
arranged for by such Servicer. Upon completion of the inspection, the related
Servicer shall promptly provide the Indenture Trustee with a written report
of
environmental inspection. The foregoing is subject to the proviso that the
related Servicer shall not be required to expend its own funds in connection
with any foreclosure or attempted foreclosure or towards the correction of
any
default on a related senior mortgage loan or restoration of any property unless
it shall determine that (i) such expenditure will increase the related Net
Liquidation Proceeds and (ii) such expenses will be recoverable by the related
Servicer through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property. In the event of a determination by a Servicer that any
such
expenditure previously made pursuant to this Section 3.07 will not be
reimbursable from Liquidation Proceeds, such Servicer shall be entitled to
reimbursement of its funds so expended pursuant to
Section 3.03.
(b) [RESERVED]
(c) 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 issued in
the
name of the Indenture Trustee, on behalf of the Securityholders of the Home
Equity Mortgage Trust, 2006-2, or its designee. The Indenture Trustee’s name
shall be placed on the title to such REO solely as the Indenture Trustee
hereunder and not in its individual capacity. Each Servicer shall ensure that
the title to such REO references this Agreement and the Indenture Trustee’s
capacity hereunder. Notwithstanding any such acquisition of title and
cancellation of the related Loan, such Mortgaged Property shall (except as
otherwise expressly provided herein) be considered to be an outstanding Loan
held as an asset of the Issuer until such time as such property shall be
sold.
(d) Notwithstanding
anything to the contrary contained in this Agreement, with respect to any Loan
that is one hundred twenty (120) days delinquent, the related Servicer shall
have obtained or shall obtain a broker’s price opinion with respect to the
related Mortgaged Property and shall use all reasonable efforts to obtain a
total indebtedness balance (including, but not limited to, unpaid principal,
interest, escrows, taxes and expenses) for any related senior lien. The cost
of
obtaining any such broker’s price opinion shall be reimbursable to the related
Servicer pursuant to Section 3.03(xii). After obtaining the related broker’s
price opinion, the related Servicer will determine whether any Significant
Net
Recovery is possible through foreclosure proceedings or other liquidation of
the
related Mortgaged Property. If the related Servicer determines that (x) no
Significant Net Recovery is possible or (y) the potential Net Recoveries are
anticipated to be an amount, determined by the related Servicer in its good
faith judgment and in light of other mitigating circumstances, that is
insufficient to warrant proceeding through foreclosure or other liquidation
of
the related Mortgaged Property, it may, at its discretion, charge off such
delinquent Loan in accordance with paragraph (e) and (f) below.
(e) With
respect to any Loan, if the related Servicer determines based on the broker’s
price opinion obtained under paragraph (d) above and other relevant
considerations that (x) no Significant Net Recovery is possible through
foreclosure proceedings or other liquidation of the related Mortgaged Property
or (y) the potential Net Recoveries are anticipated to be an amount, determined
by the related Servicer in its good faith judgment and in light of other
mitigating circumstances, that is insufficient to warrant proceeding through
foreclosure or other liquidation of the related Mortgaged Property, it will
be
obligated to charge off the related Loan during the month in which such Loan
becomes 180 days delinquent. Once a Loan has been charged off, (under this
Section or otherwise) the related Servicer will discontinue making Advances,
the
related Servicer will not be entitled to any additional servicing compensation
(except as described in paragraph (f) of this Section 3.07), the Charged Off
Loan will give rise to a Realized Loss, and the related Servicer will follow
the
procedures described in paragraph (f) below. If the related Servicer determines
that (x) a Significant Net Recovery is possible through foreclosure proceedings
or other liquidation of the Mortgaged Property and (y) the potential Net
Recoveries are anticipated to be an amount, determined by the related Servicer
in its good faith judgment and in light of other mitigating circumstances,
that
is sufficient to warrant proceeding through foreclosure or other liquidation
of
the related Mortgaged Property, such Servicer may continue to make Advances
on
the related Loan that has become 180 days delinquent and, will notify the Credit
Risk Manager of that decision.
(f) (A)
With
respect to any Wilshire Serviced Loan that becomes a Charged Off Loan, Wilshire
shall notify SPS of its decision to charge off such Loan and the servicing
of
such Wilshire Serviced Loan will be transferred to SPS, such transfer to be
initiated by Wilshire on the 15th day of the month (or if the 15th of the month
is not a Business Day, the next Business Day) following the month in which
such
Wilshire Serviced Loan becomes a Charged Off Loan and may be serviced, at SPS’s
discretion, using Special Servicing as provided in paragraph (f)(B) below.
Immediately upon transfer of any Wilshire Serviced Loan to SPS, Wilshire shall
be reimbursed for all unreimbursed Advances and Servicing Advances (including
any trailing expenses incurred prior to but invoiced after the date servicing
is
transferred to SPS, so long as Wilshire notifies the Indenture Trustee of such
trailing expenses within 90 days of the date of such transfer) and unpaid
Servicing Fees relating to such transferred Mortgage Loan out of funds on
deposit in the related Custodial Account. Wilshire shall provide an Officer’s
Certificate to the Indenture Trustee no later than the related Servicer
Remittance Date evidencing the amount to be reimbursed pursuant to the previous
sentence with respect to any Loans transferred by Wilshire to SPS. Wilshire
shall notify the Indenture Trustee of any Wilshire Serviced Loan that is
transferred to SPS. Wilshire shall provide servicing information on such
transferred Loans as reasonably requested by SPS including, but not limited
to,
an electronic data tape containing the fields set forth in Exhibit H hereto,
and
an electronic file or hard copy containing collection comments, outstanding
advance balances, payment histories, and hardcopies of any imaged files. SPS
shall be responsible for any other reasonable actions required by Accepted
Servicing Practices relating to the transfer of servicing and the charging
off
of such Loans. All costs of such transfer of the electronic data tape and files
relating to Wilshire Serviced Loan shall be paid by Wilshire. Wilshire shall
not
be responsible for SPS’s boarding costs of such transferred Loans. SPS shall not
be responsible for the reimbursement of any Advance or Servicing Advance on
a
transferred Loan;
(B)
Any
(x) PNC Serviced Loan or Ocwen Serviced Loan that becomes a Charged Off Loan
or
(y) Wilshire Serviced Loan that becomes a Charged Off Loan and is transferred
to
SPS pursuant to paragraph (f)(A) above may continue to be serviced by the
related Servicer for the Securityholders using Special Servicing. PNC, Ocwen
or
SPS, as applicable, will accrue, but not be entitled to, any Servicing Fees
and
reimbursement of expenses in connection with such Charged Off Loans, except
to
the extent of funds available from the aggregate amount of recoveries on all
Loans serviced by that Servicer that are Charged Off Loans. Such aggregate
recovery amounts on Loans serviced by that Servicer that are Charged Off Loans
shall be paid to the related Servicer first, as reimbursement of any outstanding
and unpaid expenses, and second, as any accrued and unpaid Servicing Fees.
The
related Servicer will only be entitled to previously accrued Servicing Fees
and
expenses on any such Charged Off Loans. The related Servicer will not be
entitled to receive any future unaccrued Servicing Fees or expenses from
collections on such Charged Off Loans. Any Charged Off Loan serviced by a
Servicer using Special Servicing shall be so serviced until the Release Date
described below. Any Net Recoveries on such Charged Off Loans received prior
to
the Release Date will be included in the
Principal Remittance Amount and Interest Remittance Amount.
On
the
date (the “Release Date”) which is no more than six months after the date on
which a Servicer begins servicing any Charged Off Loans using Special Servicing,
unless specific Net Recoveries are anticipated by the related Servicer on a
particular Charged Off Loan (in which case the Release Date will be delayed
until all such specific anticipated Net Recoveries are received or no longer
anticipated), such Charged Off Loan will be released from the Trust, will no
longer be an asset of any REMIC, and will be transferred to the Class 1X-2
Certificateholders, in the case of a Group 1 Loan, or the Class 2X-2
Certificateholders, in the case of a Group 2 Loan, without recourse, and
thereafter (i) those Holders, as identified with contact information in writing
to the related Servicer by the Depositor, will be entitled to any amounts
subsequently received in respect of any such Released Loans, subject to the
related Servicer’s fees described below, (ii) the majority in interest Class
1X-2 Certificateholder or Class 2X-2 Certificateholder, as applicable, may
designate any servicer to service any such Released Loan, (iii) the majority
in
interest Class 1X-2 Certificateholder or Class 2X-2 Certificateholder, as
applicable, may sell any such Released Loan to a third party and (iv) to the
extent the servicing of such Charged Off Loans is not transferred from the
related Servicer, the servicing of such Charged Off Loans and the fees therefor
shall be governed by the most current servicing agreement between the related
Servicer and the Seller. Notwithstanding the previous sentence, if at any time
after a Loan has been Charged Off and prior to six months after the date on
which the related Servicer begins servicing such Charged Off Loan using Special
Servicing, the related Servicer determines that there will not be any Net
Recoveries on such Charged Off Loan under any circumstances, such Servicer
may
release such Charged Off Loan to the majority in interest Class 1X-2
Certificateholder or Class 2X-2 Certificateholder, as applicable,in accordance
with the provisions set forth in the previous sentence.
Notwithstanding
the foregoing, the procedures described above in the first paragraph of this
subsection 3.07(f) relating to the treatment of Charged Off Loans may be
modified at any time at the discretion of the majority in interest Class 1X-1
Certificateholder or Class 2X-2 Certificateholder, as applicable,, with the
consent of the applicable Servicers, which consents shall not be unreasonably
withheld; provided, however, that in no event shall the majority in interest
Class 1X-1 Certificateholder or Class 2X-2 Certificateholder, as applicable,
change the fee structure relating to Charged Off Loans in a manner that would
cause fees to be paid to the Servicers other than from recoveries on Charged
Off
Loans.
The
Indenture Trustee shall track collections received by each Servicer on any
Charged Off Loans based upon loan level data provided to the Indenture Trustee
by the related Servicer on each Data Remittance Date in a report in the form
of
Exhibit E hereto, identifying the Charged Off Loans as of the related Collection
Period that such Servicer will continue to service until the related Release
Date using Special Servicing. On each Payment Date, the Indenture Trustee shall
verify, based on the recovery and expense information provided by the related
Servicer, on the related Data Remittance Date, (i) the aggregate amount of
accrued and unpaid Servicing Fees to be paid to each Servicer, and expenses
to
be reimbursed to each Servicer, on such Charged Off Loans as of the related
Collection Period and (ii) the amount of Net Recoveries on such Charged Off
Loans for such Payment Date. The Indenture Trustee shall be entitled to rely,
without independent verification, on the loan level data provided by the
Servicers that identifies the recovery amounts and the outstanding and unpaid
expenses on any Charged Off Loan in order to verify the amount in clause (ii)
of
the previous sentence. The Indenture Trustee will be responsible for
independently verifying the aggregate amount of accrued and unpaid Servicing
Fees described in clause (i) of the second preceding sentence to be paid to
the
related Servicer.
(g) The
majority Class 1X-2 Certificateholder or Class 2X-2 Certificateholder, as
applicable, at its option, may (but is not obligated to) repurchase from the
Trust Fund, (a) any related Loan that is delinquent in payment by three or
more
Scheduled Payments or (b) any related Loan with respect to which there has
been
initiated legal action or other proceedings for the foreclosure of the related
Mortgaged Property either judicially or non-judicially. If it elects to make
any
such repurchase, the majority Class 1X-2 Certificateholder or Class 2X-2
Certificateholder, as applicable, shall repurchase such Loan with its own funds
at a price equal to the Repurchase Price for such Loan. The majority Class
1X-2
Certificateholder or Class 2X-2 Certificateholder, as applicable, may designate
any servicer to service any such Loan purchased from the Trust.
Section
3.08 Issuer
and Indenture Trustee to Cooperate.
On or
before each Payment Date, each Servicer will notify the Indenture Trustee or
the
Custodian, with a copy to the Issuer, of the termination of or the payment
in
full and the termination of any Loan during the preceding Collection Period.
Upon receipt of payment in full, the related Servicer is authorized to execute,
pursuant to the authorization contained in Section 3.01, if the assignments
of Mortgage have been recorded if required under the Loan Purchase Agreement,
an
instrument of satisfaction regarding the related Mortgage, which instrument
of
satisfaction shall be recorded by the related Servicer if required by applicable
law and be delivered to the Person entitled thereto and, if applicable, to
cause
the removal from the registration on the MERS® System of such Mortgage. It is
understood and agreed that any expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the related Custodial Account. From time to time and as appropriate
for the servicing or foreclosure of any Loan, the Custodian shall, pursuant
to
the terms of the Custodial Agreement, upon request of the related Servicer
and
delivery to the Custodian, with a copy to the Issuer, of a Request for Release,
signed by a Servicing Officer, release or cause to be released the related
Loan
File to the related Servicer and the Issuer or Indenture Trustee shall promptly
execute such documents, in the forms provided by the related Servicer, as shall
be necessary for the prosecution of any such proceedings or the taking of other
servicing actions. Such trust receipt shall obligate the related Servicer to
return the Loan File to the Custodian (as specified in such receipt) when the
need therefor by the related Servicer no longer exists unless the Loan shall
be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the trust receipt shall be released
to
the related Servicer.
If
a
Servicer at any time seeks to initiate a foreclosure proceeding in respect
of
any Mortgaged Property as authorized by this Agreement, such Servicer shall,
if
applicable, deliver or cause to be delivered to the Indenture Trustee, for
signature, as appropriate, any court pleadings, requests for trustee’s sale or
other documents (which, if acceptable by the related court, may be copies)
necessary to effectuate such foreclosure or any legal action brought to obtain
judgment against the Mortgagor on the Mortgage Note or the Mortgage or to obtain
a deficiency judgment or to enforce any other remedies or rights provided by
the
Mortgage Note or the Mortgage or otherwise available at law or in equity. The
related Servicer shall deposit or credit the Net Liquidation Proceeds, inclusive
of Foreclosure Profits, received with respect thereto in the related Custodial
Account.
In
the
event that all delinquent payments due under any such Loan are paid by the
Mortgagor and any other defaults are cured, then the assignee for collection
shall promptly reassign such Loan to the Indenture Trustee and return all Loan
Files to the place where the related Loan File was being
maintained.
In
connection with the Issuer’s obligation to cooperate as provided in this
Section 3.08 and all other provisions of this Servicing Agreement requiring
the Issuer to authorize or permit any actions to be taken with respect to the
Loans, the Indenture Trustee, expressly agrees, on behalf of the Issuer, to
take
all such actions on behalf of the Issuer and to promptly execute and return
all
instruments reasonably required by the Servicers in connection
therewith.
Section
3.09 Servicing
Compensation and Master Servicing Compensation; Payment of Certain Expenses
by
Servicers.
Each
Servicer shall be entitled to receive the related Servicing Fee in accordance
with Sections 3.02 and 3.03 as compensation for its services in connection
with
servicing the Loans. Moreover, additional servicing compensation in the form
of
late payment charges, Prepayment Interest Excess, investment income on amounts
in the related Custodial Account or the Payment Account and other receipts
not
required to be deposited in the related Custodial Account as specified in
Section 3.02 shall be retained by the related Servicer. Each Servicer shall
be required to pay all expenses incurred by it in connection with its normal
and
customary activities hereunder and shall not be entitled to reimbursement
therefor.
Section
3.10 Annual
Statement as to Compliance.
Not
later
than March 10 of each calendar year beginning in 2007 (and no later than April
15 of any calendar year in which the Trust Fund is no longer subject to the
Exchange Act reporting requirements), each Servicer and the Special Servicer
shall deliver to the Depositor, the Insurer and the Indenture Trustee an
Officer’s Certificate (an “Annual Statement of Compliance”) stating, as to the
signer thereof, that (i) a review of the activities of such Servicer or the
Special Servicer during the preceding calendar year and of the performance
of
such Servicer under this Agreement has been made under such officer’s
supervision, and (ii) to the best of such officer’s knowledge, based on such
review, such Servicer or the Special Servicer has fulfilled all its obligations
under this Agreement in all material respects throughout such year, or, if
there
has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status
of
the failure. Such Annual Statement of Compliance shall contain no restrictions
or limitations on its use. If the Indenture Trustee or the Depositor has not
received the related Annual Statement of Compliance by March 10 of the related
year (and no later than April 15 of any calendar year in which the Trust Fund
is
no longer subject to the Exchange Act reporting requirements), such party shall
notify the related Servicer by telephone and email, or by telephone and fax,
of
such failure.
Section
3.11 Assessments
of Compliance and Attestation Reports.
On
and
after January 1, 2006, each Servicer and the Special Servicer shall service
and
administer the related Loans in accordance with all applicable requirements
of
the Servicing Criteria. Each Servicer and the Special Servicer shall deliver
to
the Trustee and the Depositor (with a copy to the Insurer) on or before March
10
of each calendar year beginning in 2007 (and no later than April 15 of any
calendar year in which the Trust Fund is no longer subject to the Exchange
Act
reporting requirements), a report (an “Assessment of Compliance”) regarding the
related Servicer’s or the Special Servicer’s assessment of compliance with the
Servicing Criteria during the preceding calendar year as required by Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, which
as
of the date hereof, require a report by an authorized officer of the related
Servicer or the Special Servicer that contains the following:
(a) A
statement by such officer of its responsibility for assessing compliance with
the Servicing Criteria applicable to the related Servicer or the Special
Servicer;
(b) A
statement by such officer that such officer used the Servicing Criteria to
assess compliance with the Servicing Criteria applicable to the related Servicer
or the Special Servicer;
(c) An
assessment by such officer of the related Servicer’s or the Special Servicer’s
compliance with the applicable Servicing Criteria for the period consisting
of
the preceding calendar year, including disclosure of any material instance
of
noncompliance with respect thereto during such period, which assessment shall
be
based on the activities it performs with respect to asset-backed securities
transactions taken as a whole involving the related Servicer or the Special
Servicer, that are backed by the same asset type as the Loans;
(d) A
statement that a registered public accounting firm has issued an attestation
report on the related Servicer’s or the Special Servicer’s Assessment of
Compliance for the period consisting of the preceding calendar year;
and
(e) A
statement as to which of the Servicing Criteria, if any, are not applicable
to
the related Servicer or the Special Servicer, which statement shall be based
on
the activities it performs with respect to asset-backed securities transactions
taken as a whole involving the related Servicer or the Special Servicer, that
are backed by the same asset type as the Loans.
Such
report at a minimum shall address each of the Servicing Criteria specified
on a
certification substantially in the form of Exhibit F hereto delivered to the
Indenture Trustee and the Depositor concurrently with the execution of this
Agreement. If the Indenture Trustee or the Depositor has not received the
related Assessment of Compliance by March 10 of the related year (and no later
than April 15 of any calendar year in which the Trust Fund is no longer subject
to the Exchange Act reporting requirements), such party shall notify the related
Servicer by telephone and email, or by telephone and fax, of such
failure.
On
or
before March 10 of each calendar year beginning in 2007 (and no later than
April
15 of any calendar year in which the Trust Fund is no longer subject to the
Exchange Act reporting requirements), each Servicer and the Special Servicer
shall furnish to the Indenture Trustee and the Depositor a report (an
“Attestation Report”) by a registered public accounting firm that attests to,
and reports on, the Assessment of Compliance made by the related Servicer or
the
Special Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act
and
Item 1122(b) of Regulation AB, which Attestation Report must be made in
accordance with standards for attestation reports issued or adopted by the
Public Company Accounting Oversight Board. If the Indenture Trustee or the
Depositor has not received the related Attestation Report by March 10 of the
related year (and no later than April 15 of any calendar year in which the
Trust
Fund is no longer subject to the Exchange Act reporting requirements), such
party shall notify the related Servicer by telephone and email, or by telephone
and fax, of such failure.
Each
Servicer shall cause any Subservicer to which such Servicer delegated any of
its
responsibilities with respect to the related Mortgage Loans and each
Subcontractor determined by such Servicer to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver to the
Indenture Trustee and the Depositor an assessment of compliance and accountants’
attestation by March 10 of any calendar year during which the Trust Fund is
subject to the Exchange Act reporting requirements.
For
so
long as the Trust Fund is subject to the Exchange Act reporting requirements,
the Indenture Trustee shall also provide to the Depositor an Assessment of
Compliance and Attestation Report with respect to itself, as and when provided
above by March 15, which shall address each of the Servicing Criteria specified
on Exhibit F hereto which are indicated as applicable to the “indenture
trustee.”
Section
3.12 Access
to Certain Documentation and Information Regarding the Loans.
Whenever required by statute or regulation each Servicer shall provide to any
Securityholder upon reasonable request (or a regulator for a Securityholder),
the Insurer or the Indenture Trustee, reasonable access to the documentation
regarding the related Loans in its possession, such access being afforded
without charge but only upon reasonable request and during normal business
hours
at the offices of the related Servicer. In addition, each Servicer shall provide
to the Special Servicer reasonable access to all records and documentation
regarding the Loans serviced by it that become Special Serviced Loans. Each
Servicer may, from time to time, provide the Depositor, the Insurer, the
Indenture Trustee and any Person designated by the Depositor, the Insurer or
the
Indenture Trustee, with reports and information regarding the Loans, including
without limitation, information requested by the Depositor or an originator
of
the Loans for required institutional risk control. Nothing in this
Section 3.12 shall derogate from the obligation of each Servicer to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of a Servicer to provide access as provided in this
Section 3.12 as a result of such obligation shall not constitute a breach
of this Section 3.12.
Section
3.13 Maintenance
of Certain Servicing Insurance Policies.
(a) Each
Servicer shall maintain with a responsible company, and at its own expense,
a
banker's blanket fidelity bond (a “Fidelity Bond”) and a mortgage errors and
omissions insurance policy (an “Errors and Omissions Policy”), in amounts as
required by Xxxxxx Xxx and Xxxxxxx Mac and as are commercially available and
at
costs that are not generally regarded as excessive by industry standards. Any
fidelity bond shall protect against dishonest act of officers and employees.
Any
such Fidelity Bond or Errors and Omissions Policy shall not be canceled without
the prior written consent of the Indenture Trustee.
(b) Each
Servicer shall be deemed to have complied with this provision if any of its
Affiliates has such a Fidelity Bond and Errors and Omissions Policy and, by
the
terms of such policy, the coverage afforded thereunder extends to the related
Servicer. Each Servicer shall cause each Subservicer to maintain an Errors
and
Omissions Policy and a Fidelity Bond meeting the requirements of this
Section.
Section
3.14 Information
Required by the Internal Revenue Service and Reports of Foreclosures and
Abandonments of Mortgaged Property.
Each
Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code
to the effect that a Servicer or Subservicer shall make reports of foreclosures
and abandonments of any mortgaged property for each year beginning in 2006,
each
Servicer or Subservicer shall file reports relating to each instance occurring
during the previous calendar year in which the related Servicer (i) on behalf
of
the Issuer, acquires an interest in any Mortgaged Property through foreclosure
or other comparable conversion in full or partial satisfaction of a Loan, or
(ii) knows or has reason to know that any Mortgaged Property has been abandoned.
The reports from the related Servicer or Subservicer shall be in form and
substance sufficient to meet the reporting requirements imposed by
Section 6050J and Section 6050H (reports relating to mortgage interest
received) of the Code.
Section
3.15 Periodic
Filings.
(a) Each
Servicer shall reasonably cooperate with the Depositor and the Indenture Trustee
in connection with the Trust’s satisfying the reporting requirements under the
Exchange Act.
(b) (i)
For
so long as the Trust Fund is subject to the Exchange Act reporting requirements,
within 5 calendar days after the related Payment Date, each entity that is
indicated in Exhibit I as the responsible party for providing Additional Form
10-D Disclosure shall be required to provide to the Indenture Trustee and the
Depositor, to the extent known by a Responsible Officer, clearly identifying
which item of Form 10-D the information relates to, any Additional Form 10-D
Disclosure, if applicable.
(ii) For
so
long as the Trust Fund is subject to the Exchange Act reporting requirements,
within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable Event”), and if requested
by the Depositor, the Indenture Trustee shall prepare and file on behalf of
the
Trust a Form 8-K reporting such Reportable Event, provided that the Depositor
shall file the initial Form 8-K in connection with the issuance of the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K (“Form 8-K Disclosure
Information”) shall be determined and provided to the Indenture Trustee by the
entity that is indicated in Exhibit I as the responsible party for providing
that information, if other than the Indenture Trustee, to the Indenture Trustee
within two Business Days after the Reportable Event, and the Indenture Trustee
shall have no liability with respect to any failure to properly prepare or
file
such Form 8-K resulting from or relating to the Indenture Trustee’s inability or
failure to obtain any information in a timely manner from the party responsible
for delivery of such Form 8-K Disclosure Information.
For
so
long as the Trust Fund is subject to the Exchange Act reporting requirements,
no
later than the end of business on the second Business Day after the occurrence
of a Reportable Event, the entity that is indicated in Exhibit I as the
responsible party for providing Form 8-K Disclosure Information shall be
required to provide to the Indenture Trustee and the Depositor, to the extent
known by a Responsible Officer, the substance of any Form 8-K Disclosure
Information, if applicable.
(iii) Prior
to
January 30 of the first year in which the Indenture Trustee is able to do so
under applicable law, the Indenture Trustee shall file a Form 15 Suspension
Notice with respect to the Trust Fund. Prior to (x) March 15, 2007 and (y)
unless and until a Form 15 Suspension Notice shall have been filed, prior to
March 15 of each year thereafter, each Servicer and the Special Servicer shall
provide the Indenture Trustee (for inclusion in the Form 10-K) with an Annual
Compliance Statement, together with a copy of the Assessment of Compliance
and
Attestation Report to be delivered by the related Servicer or the Special
Servicer pursuant to Sections 3.10 and 3.11 (including with respect to any
Subservicer to which such Servicer has delegated any of its responsibilities
with respect to the related Loans and each Subcontractor determined by such
Servicer to be “participating in the servicing function” within the meaning of
Item 1122 of Regulation AB, if required to be filed). Prior to (x) March 31,
2007 and (y) unless and until a Form 15 Suspension Notice shall have been filed,
March 31 of each year thereafter, the Indenture Trustee shall file a Form 10-K
with respect to the Trust Fund. Such Form 10-K shall include the items provided
by the Servicers and the Special Servicer pursuant to the second preceding
sentence, the Assessment of Compliance and Attestation Report provided pursuant
to Section 3.11 with respect to the Indenture Trustee, and the Form 10-K
certification (the “Depositor Certification”) signed by the senior officer of
the Depositor in charge of securitization. The Indenture Trustee shall receive
the items described in the preceding sentence no later than March 15 of each
calendar year prior to the filing deadline for the Form 10-K for so long as
the
Trust Fund is subject to the Exchange Act reporting requirements. If the
Indenture Trustee or the Depositor has not received such items by March 10
of
the related year, such party shall notify the related Servicer by telephone
and
email, or by telephone and fax, of such failure.
Any
disclosure or information in addition to that described in the preceding
paragraph that is required to be included on Form 10-K (“Additional Form 10-K
Disclosure”) shall be determined and provided to the Indenture Trustee by the
entity that is indicated in Exhibit I as the responsible party for providing
that information, if other than the Indenture Trustee.
Prior
to
(x) March 15, 2007 and (y) unless and until a Form 15 Suspension Notice shall
have been filed, prior to March 1 of each year thereafter, each entity that
is
indicated in Exhibit I as the responsible party for providing Additional Form
10-K Disclosure information shall be required to provide to the Indenture
Trustee and the Depositor, to the extent known by a Responsible Officer, the
substance of any Additional Form 10-K Disclosure information, if
applicable.
(c)
Not
later
than March 10 of each year during which the Trust Fund is subject to the
Exchange Act reporting requirements, each Servicer and the Special Servicer
will
deliver to the Depositor and the Indenture Trustee (with a copy to the Insurer,
in the case of PNC) an Officer’s Certificate for the prior calendar year in
substantially the form of Exhibit D-2 to this Agreement. If the Indenture
Trustee or the Depositor has not received such Officer’s Certificate by March 10
of such year, such party shall notify the related Servicer by telephone and
email, or by telephone and fax, of such failure. Each Servicer and the Special
Servicer agrees to indemnify and hold harmless the Depositor, the Indenture
Trustee and each Person, if any, who “controls” the Depositor or the Indenture
Trustee within the meaning of the Securities Act and their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs, fees and expenses that such Person may sustain arising out
of
third party claims based on (i) the failure of such Servicer or the Special
Servicer, as applicable, to deliver or cause to be delivered when required
any
Officer’s Certificate pursuant to this Section 3.15(b), the Annual Statement of
Compliance pursuant to Section 3.10 or the Assessment of Compliance pursuant
to
Section 3.11, or (ii) any material misstatement or omission contained in any
Officer’s Certificate provided pursuant to this Section 3.15(b), in the Annual
Statement of Compliance delivered pursuant to Section 3.10 or in the Assessment
of Compliance delivered pursuant to Section 3.11. If an event occurs that would
otherwise result in an indemnification obligation under clauses (i) or (ii)
above, but the indemnification provided for in this Section 3.15(b) by such
Servicer or the Special Servicer, as applicable, is unavailable or insufficient
to hold harmless such Persons, then such Servicer or the Special Servicer,
as
applicable, shall contribute to the amount paid or payable by such Persons
as a
result of the losses, claims, damages or liabilities of such Persons in such
proportion as is appropriate to reflect the relative fault of the Depositor
or
Indenture Trustee on the one hand and such Servicer or the Special Servicer,
as
applicable, on the other. Each Servicer and the Special Servicer acknowledges
that the Depositor and the Indenture Trustee are relying on such Servicer’s and
the Special Servicer’s performance of its obligations under this Agreement in
order to perform their respective obligations under this Section
3.15.
(d) If
the
Commission issues additional interpretative guidance or promulgates additional
rules or regulations, or if other changes in applicable law occur, that would
require the reporting arrangements, or the allocation of responsibilities with
respect thereto, described in this Section 3.15, to be conducted differently
than as described, the Depositor, Servicers, the Special Servicer and Indenture
Trustee will reasonably cooperate to amend the provisions of this Section 3.15
in order to comply with such amended reporting requirements and such amendment
of this Section 3.15. Any such amendment shall be made in accordance with
Section 8.01 without the consent of the Certificateholders, and may result
in a
change in the reports filed by the Indenture Trustee on behalf of the Trust
under the Exchange Act. Notwithstanding the foregoing, the Depositor, Servicers,
the Special Servicer and Indenture Trustee shall not be obligated to enter
into
any amendment pursuant to this Section 3.15 that adversely affects its
obligations and immunities under this Agreement.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.10, 3.11
and
3.15 of this Agreement is to facilitate compliance by the Seller and the
Depositor with the provisions of Regulation AB promulgated by the SEC under
the
Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from
time to time and subject to clarification and interpretive advice as may be
issued by the staff of the Commission from time to time. Therefore, each of
the
parties agrees that (a) the obligations of the parties hereunder shall be
interpreted in such a manner as to accomplish that purpose, (b) the parties’
obligations hereunder will be supplemented and modified as necessary to be
consistent with any such amendments, or SEC interpretive advice or guidance
in
respect of the requirements of Regulation AB, (c) the parties shall comply
with
reasonable requests made by the Seller or the Depositor for delivery of
additional or different information as is necessary to comply with the
provisions of Regulation AB, and (d) no amendment of this Agreement shall be
required to effect any such changes in the parties’ obligations as are necessary
to accommodate evolving interpretations of the provisions of Regulation
AB.
Section
3.16 HELOC
Draws; Excluded Amounts.
(a) PNC
shall
be obligated to fund any Draws with respect to any HELOC in accordance with
the
terms of the of the related Loan. Unless such Additional Balance constitutes
an
Excluded Amount, it shall automatically be sold and transferred to the Issuer.
With respect to each Additional Balance transferred to the Issuer, the Issuer
shall pay or cause to be paid to PNC or its designee the purchase price for
such
Additional Balance equal to the amount of the related Draw in one of the
following ways, as applicable, (i) a cash payment pursuant to paragraph (c)
below in an amount or (ii) During the Managed Amortization Period, by an
increase to the Additional Balance Advance Amount with such Additional Balance
Advance Amount reimbursed to PNC pursuant to Section 5.01(a) of the Trust
Agreement. PNC hereby acknowledges that the Additional Balance Advance Amount
is
only reimbursable pursuant to the terms of the Indenture and the Trust Agreement
and that such amounts shall constitute an advance on behalf of the Issuer and
that PNC does not own any interest in the related Loan. Additional Balances
comprising the Additional Balance Advance Amount shall be an asset of the Trust
Estate but not be an asset of REMIC IIA, REMIC IIB or REMIC IIC.
(b) PNC
hereby acknowledges that if a Rapid Amortization Event is in effect, it shall
be
responsible to fund all Draws and that such Draws shall be Excluded Amounts
and
shall not constitute a part of the Additional Balance Advance Amount but shall
be the property of PNC. Principal and interest payments made by the related
Mortgagor or other collections in respect of a HELOC and the related Excluded
Amount received during any Collection Period during the Rapid Amortization
Period shall be allocated between such HELOC and the related Excluded Amount
on
a pro rata basis and shall only be reimbursed to PNC (the “Reimbursable Excluded
Amount”) based on a pro rata allocation between the related Excluded Amount and
the Principal Balance of the related HELOC in proportion to the respective
amounts outstanding as of the end of the calendar month preceding such
Collection Period. Any such Reimbursable Excluded Amount may be withdrawn by
PNC
from the related Custodial Account pursuant to Section 3.03(i)
hereof.
(c) On
each
Payment Date, prior to any distributions to Securityholders, the Indenture
Trustee shall remit to PNC, if then available from Principal Collections during
the related Collection Period, from funds on deposit in the Payment Account,
an
amount equal to any Additional Balances created during the related Collection
Period and not previously reimbursed to PNC pursuant to Section
3.03(i)(a).
Section
3.17 Duties
of the Credit Risk Manager.
The
Depositor appoints Xxxxxxx Fixed Income Services Inc. (formerly known as The
Murrayhill Company) as Credit Risk Manager. For and on behalf of the Depositor,
and the Indenture Trustee, the Credit Risk Manager will provide the Depositor
with reports and recommendations concerning Loans that are past due, as to
which
there has been commencement of foreclosure, as to which there has been
forbearance in exercise of remedies which are in default, as to which obligor
is
the subject of bankruptcy, receivership, or an arrangement of creditors, or
as
to which have become REO. Such reports and recommendations will be based upon
information provided to the Credit Risk Manager pursuant to the Credit Risk
Management Agreements or in the case of PNC, pursuant to this Agreement, and
the
Credit Risk Manager shall look solely to the related Servicer for all
information and data (including loss and delinquency information and data)
and
loan level information and data relating to the servicing of the Loans. If
the
Credit Risk Manager is no longer able to perform its duties hereunder, the
Depositor shall terminate the Credit Risk Manager and cause the appointment
of a
successor Credit Risk Manager. Upon any termination of the Credit Risk Manager
or the appointment of a successor Credit Risk Manager, the Depositor shall
give
written notice thereof to the Seller, the Servicers, the Indenture Trustee
and
each Rating Agency. Notwithstanding the foregoing, the termination of the Credit
Risk Manager pursuant to this Section 3.17 shall not become effective until
the
appointment of a successor Credit Risk Manager.
In
connection with those Loans serviced by PNC pursuant to this Agreement, PNC
agrees to provide the Credit Risk Manager with all information on such Loans
that is reasonably requested by the Credit Risk Manager that resides on PNC’s
servicing system, which information shall include, but not be limited to,
monthly performance data on each such Loan containing the information, where
available, specified in Exhibit G to this Agreement, information on delinquent
and defaulted PNC Serviced Loans, information on prepayment charges with respect
to the PNC Serviced Loans, and copies of realized loss certificates or any
itemization regarding each Liquidated Loan serviced by PNC for the applicable
Collection Period.
PNC
shall
permit the Credit Risk Manager to conduct an on-site review and evaluation
of
its operations, as they relate to the PNC Serviced Loans, no more than annually,
unless circumstances warrant special review. Circumstances warranting special
review shall include, but not be limited to, a request by the Depositor that
a
review be conducted. The review and evaluation will be conducted upon at least
thirty (30) days prior written notice to PNC by the Credit Risk Manager, and
shall be conducted at the Credit Risk Manager’s expense.
The
Credit Risk Manager may provide the Servicers with advice regarding the
management of specific Loans. The Credit Risk Manager’s advice is made in the
form of recommendations only, and the Credit Risk Manager does not have the
right to direct the Servicers in performing their duties under the this
Agreement. The Credit Risk Manager acknowledges that any Servicer may, after
review and analysis of the Credit Risk Manager’s recommendation, accept or
reject such advice, in such Servicer’s sole discretion, subject to the duties of
the Servicer set forth in this Agreement.
Section
3.18 Limitation
Upon Liability of the Credit Risk Manager.
Neither
the Credit Risk Manager, nor any of the directors, officers, employees or agents
of the Credit Risk Manager, shall be under any liability to the Indenture
Trustee, the Securityholders or the Depositor for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, in reliance upon information provided by a Servicer under the Credit
Risk Management Agreements or in the case of PNC, under this Agreement, or
for
errors in judgment; provided, however, that this provision shall not protect
the
Credit Risk Manager or any such person against liability that would otherwise
be
imposed by reason of willful malfeasance, bad faith or gross negligence in
its
performance of its duties under this Agreement or the Credit Risk Management
Agreements. The Credit Risk Manager and any director, officer, employee or
agent
of the Credit Risk Manager 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, and may rely in good faith upon the accuracy of information
furnished by any Servicer pursuant to the Credit Risk Management Agreements
or
in the case of PNC, pursuant to this Agreement, in the performance of its duties
thereunder and hereunder.
Section
3.19 Advances
by the Servicers.
With
respect to each Loan (other than the HELOCs), the related Servicer shall deposit
in the related Custodial Account an amount equal to all Scheduled Payments
(with
interest at the Mortgage Interest Rate less the Servicing Fee Rate) which were
due but not received on the related Loans during the applicable Collection
Period; provided however, that with respect to any Balloon Loan that is
delinquent on its maturity date, the related Servicer will not be required
to
advance the related balloon payment but will be required to continue to make
Advances in accordance with this Section 3.19 with respect to such Balloon
Loan
in an amount equal to an assumed scheduled payment that would otherwise be
due
based on the original amortization schedule for that Loan (with interest at
the
Mortgage Rate less the Servicing Fee Rate). Each Servicer’s obligation to make
such Advances as to any related Loan will continue through the last Scheduled
Payment due prior to the payment in full of such Mortgage Loan, or through
the
date that the related Mortgaged Property has, in the judgment of such Servicer,
been completely liquidated; provided however, that such obligation with respect
to any related Loan shall cease if such Servicer determines, in its reasonable
opinion, that Advances with respect to such Loan are Nonrecoverable Advances;
provided that the related Servicer will be required to make Advances until
the
earlier of (i) through the time at which the related Loan becomes 120 days
delinquent or (ii) the time at which the related Servicer determines that such
Advances with respect to such Loan are Nonrecoverable Advances. In the event
that such Servicer determines that any such Advances are Nonrecoverable
Advances, such Servicer shall provide the Indenture Trustee with a certificate
signed by a Servicing Officer evidencing such determination.
If
an
Advance is required to be made hereunder, the related Servicer shall on the
related Servicer Remittance Date either (i) deposit in the Custodial Account
from its own funds an amount equal to such Advance, (ii) cause to be made an
appropriate entry in the records of the Custodial Account that funds in such
account being held for future distribution or withdrawal have been, as permitted
by this Section 3.19, used by the related Servicer to make such Advance or
(iii)
make Advances in the form of any combination of clauses (i) and (ii) aggregating
the amount of such Advance. Any such funds being held in a Custodial Account
for
future distribution and so used shall be replaced by the related Servicer from
its own funds by deposit in such Custodial Account on or before any future
Payment Date in which such funds would be due. The related Servicer shall be
entitled to be reimbursed from the Custodial Account for all Advances of its
own
funds made pursuant to this Section as provided in Section 3.03.
If
the
amount of Advances received from a Servicer is less than the amount required
to
be advanced by such Servicer, the Indenture Trustee shall be obligated to make
a
payment in an amount equal to such deficiency, subject to any determination
by
the Indenture Trustee that any portion of the amount required to be advanced
is
a Nonrecoverable Advance.
Section
3.20 Indenture
Trustee to Act as Servicer.
In
the
event that any Servicer shall for any reason no longer be a Servicer hereunder
(including by reason of a Servicing Default), the Indenture Trustee or its
successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Indenture Trustee shall
not be (i) obligated to make Advances if it is prohibited from doing so by
applicable law, (ii) deemed to have made any representations and warranties
of
such Servicer hereunder), (iii) liable for any losses of such Servicer pursuant
to this Agreement or any acts or omissions of the related predecessor of such
Servicer hereunder, or (iv) obligated to effectuate repurchases or substitutions
of Loans hereunder including, but not limited to, repurchases or substitutions
of Loans pursuant to Section 2.03 hereof. Any such assumption shall be subject
to Section 7.02 hereof.
Each
Servicer shall, upon request of the Indenture Trustee, but at the expense of
such Servicer, if such Servicer is terminated pursuant to Section 7.01 hereof,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement or substitute Subservicing Agreement and the Loans then
being serviced thereunder and hereunder by such Servicer and an accounting
of
amounts collected or held by it and otherwise use commercially reasonable
efforts to effect the orderly and efficient transfer of the Subservicing
Agreement or substitute Subservicing Agreement to the assuming
party.
Section
3.21 Special
Serviced Loans.
If
directed by the Special Servicer and solely at the Special Servicer’s option,
each Servicer (a “Transferring Servicer”), shall transfer the servicing of any
Loan 180 days or more delinquent to the Special Servicer. The Special Servicer
shall thereupon assume all of the rights and obligations of the Transferring
Servicer, as Servicer, hereunder arising thereafter and the Transferring
Servicer shall have no further rights or obligations, as Servicer, hereunder
with respect to such Mortgage Loan (except that the Special Servicer shall
not
be (i) liable for any acts or omissions of the Transferring Servicer hereunder
prior to the servicing transfer date or (iii) deemed to have made any
representations and warranties of the Transferring Servicer hereunder). Upon
the
transfer of the servicing of any such Loan to the Special Servicer, the Special
Servicer shall be entitled to the Servicing Fee and other compensation accruing
after the servicing transfer date with respect to such Mortgage Loans pursuant
to Section 3.09.
In
connection with the transfer of the servicing of any Loan to the Special
Servicer, the Transferring Servicer, at the Special Servicer’s expense, shall
deliver to the Special Servicer all documents and records relating to such
Loans
and an accounting of amounts collected or held by it and otherwise use its
commercially reasonable efforts to effect the orderly and efficient transfer
of
the servicing to the Special Servicer. On the servicing transfer date, the
Special Servicer shall reimburse the Transferring Servicer for all unreimbursed
Advances, Servicing Advances and Servicing Fees relating to the Loans for which
the servicing is being transferred. The Special Servicer shall be entitled
to be
reimbursed pursuant to Section 3.03 or otherwise pursuant to this Agreement
for
all such Advances, Servicing Advances and Servicing Fees paid by the
Transferring Servicer pursuant to this Section 3.22. In addition, the Special
Servicer shall notify the Issuer and Indenture Trustee of such transfer and
the
effective date of such transfer, and the Indenture Trustee shall update its
records to reflect that such Loans are Special Serviced Loans.
Section
3.22 Advance
Facility.
(a) Each
Servicer (other than PNC) is hereby authorized to enter into a financing or
other facility (any such arrangement, an “Advance Facility”) under which (1)
such Servicer assigns or pledges to another Person (an “Advancing Person”) such
Servicer’s rights under this Agreement to be reimbursed for any Advances or
Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
Advances and/or Servicing Advances required to be made by such Servicer pursuant
to this Agreement. No consent of the Indenture Trustee, Noteholders or
Certificateholders or any other party is required before a Servicer may enter
into an Advance Facility; provided,
however,
that
the consent of the Indenture Trustee (which consent shall not be unreasonably
withheld) shall be required before a Servicer may cause to be outstanding at
one
time more than one Advance Facility with respect to Advances or more than one
Advance Facility with respect to Servicing Advances. Notwithstanding the
existence of any Advance Facility under which an Advancing Person agrees to
fund
Advances and/or Servicing Advances on a Servicer’s behalf, such Servicer shall
remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement, and shall not be
relieved of such obligations by virtue of such Advance Facility. If a Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances or Servicing Advances
outstanding and previously unreimbursed pursuant to this Agreement, then such
Servicer may elect by providing written notice to the Indenture Trustee not
to
be permitted to reimburse itself for Advances and/or Servicing Advances, as
applicable, pursuant to Section 3.03 of this Agreement, but following any such
election such Servicer shall be required to include amounts collected that
would
otherwise be retained by such Servicer to reimburse it for previously
unreimbursed Advances (“Advance Reimbursement Amounts”) and/or previously
unreimbursed Servicing Advances (“Servicing Advance Reimbursement Amounts” and
together with Advance Reimbursement Amounts, “Reimbursement Amounts”) (in each
case to the extent such type of Reimbursement Amount is included in the Advance
Facility) in the remittance to the Indenture Trustee made pursuant to this
Agreement to the extent of amounts on deposit in the related Custodial Account
on the related Servicer Remittance Date. Notwithstanding anything to the
contrary herein, in no event shall Advance Reimbursement Amounts or Servicing
Advance Reimbursement Amounts be included in Interest Remittance Amounts or
Principal Remittance Amounts or distributed to Noteholders. Any Servicer, if
making the election set forth herein, shall report to the Indenture Trustee
the
portions of the Reimbursement Amounts that consist of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts, respectively.
(b) If
a
Servicer enters into an Advance Facility and makes the election set forth in
Section 3.23(a), such Servicer and the related Advancing Person shall deliver
to
the Indenture Trustee a written notice and payment instruction (an “Advance
Facility Notice”), providing the Indenture Trustee with written payment
instructions as to where to remit Advance Reimbursement Amounts and/or Servicing
Advance Reimbursement Amounts (each to the extent such type of Reimbursement
Amount is included within the Advance Facility) on subsequent Payment Dates.
The
payment instruction shall require the applicable Reimbursement Amounts to be
distributed to the Advancing Person or to a trustee or custodian (an “Advance
Facility Trustee”) designated in the Advance Facility Notice. An Advance
Facility Notice may only be terminated by the joint written direction of the
related Servicer and the related Advancing Person (and any related Advance
Facility Trustee); provided,
however,
that
the provisions of this Section 3.23 shall cease to be applicable when all
Advances and Servicing Advances funded by an Advancing Person, and when all
Advances and Servicing Advances (the rights to be reimbursed for which have
been
assigned or pledged to an Advancing Person), have been repaid to the related
Advancing Person in full.
(c) Reimbursement
Amounts shall consist solely of amounts in respect of Advances and/or Servicing
Advances made with respect to the Loans for which the related Servicer would
be
permitted to reimburse itself in accordance with Section 3.03(xii), (xiii),
(xiv) and (xvi) hereof, assuming such Servicer had made the related Advance(s)
and/or Servicing Advance(s). Notwithstanding the foregoing, no Person shall
be
entitled to reimbursement from funds held in the related Custodial Account
for
future distribution to Noteholders pursuant to the provisions of Section 3.19.
The Indenture Trustee shall not have any duty or liability with respect to
the
calculation of any Reimbursement Amount and shall be entitled to rely without
independent investigation on the Advance Facility Notice and on the applicable
Servicer’s report of the amount of Advance Reimbursement Amounts and Servicing
Advance Reimbursement Amounts that were included in the remittance from the
related Servicer to the Trustee pursuant to Section 3.03(ii). Each Servicer
(other than PNC) shall maintain and provide to any successor Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advancing Person. The successor Servicer
shall be entitled to rely on any such information provided by the related
Servicer and the successor Servicer shall not be liable for any errors in such
information.
(d) With
respect to any Advance Facility pursuant to which a Servicer has made the
election set forth in Section 3.23(a), the documentation establishing any
Advance Facility shall require that Reimbursement Amounts distributed with
respect to each Loan be allocated to outstanding unreimbursed Advances or
Servicing Advances (as the case may be) made with respect to that Loan on a
“first-in, first-out” (FIFO) basis. Such documentation shall also require the
related Servicer to provide to the related Advancing Person or Advance Facility
Trustee loan-by-loan information with respect to each Reimbursement Amount
distributed by the Indenture Trustee to such Advancing Person or Advance
Facility Trustee on each Payment Date, to enable the Advancing Person or Advance
Facility Trustee to make the FIFO allocation of each Reimbursement Amount with
respect to each Loan. The related Servicer shall remain entitled to be
reimbursed by the Advancing Person or Advance Facility Trustee for all Advances
and Servicing Advances funded by such Servicer to the extent the related rights
to be reimbursed therefor have not been assigned or pledged to an Advancing
Person.
If
a
Servicer enters into an Advance Facility, such Servicer shall indemnify the
Indenture Trustee and the Trust and any successor Servicer, as applicable,
from
and against any claims, losses, liabilities or damages resulting from the
establishment of such Advance Facility and any claim by the related Advancing
Person or any other Person, except to the extent that such claim, loss,
liability or damage resulted from or arose out of negligence, recklessness
or
willful misconduct on the part of the successor Servicer or the Indenture
Trustee, or failure by the successor Servicer or the Indenture Trustee to remit
funds as required by Section 3.23(b). Any amendment to this Section 3.23 or
to
any other provision of this Agreement that may be necessary or appropriate
to
effect the terms of an Advance Facility as described generally in this Section
3.23, including amendments to add provisions relating to a successor Servicer,
may be entered into by the parties hereto without the consent of any Noteholder
notwithstanding anything to the contrary in Section 8.01 of or elsewhere in
this
Agreement or the Indenture.
Section
3.23 Prepayment
Charges.
Notwithstanding
anything in this Agreement to the contrary, in the event of a Principal
Prepayment of a Loan, the related Servicer may not waive any Prepayment Charge
or portion thereof required by the terms of the related Mortgage Note unless
(i)
the Loan is in default or foreseeable default and such waiver (a) is standard
and customary in servicing similar mortgage loans to the Loans and (b) would,
in
the reasonable judgment of the related Servicer, maximize recovery of total
proceeds taking into account the value of such Prepayment Charge and the related
Loan, (ii)(A) the enforceability thereof is limited (1) by bankruptcy,
insolvency, moratorium, receivership, or other similar law relating to
creditors’ rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment, or (B) the enforceability is otherwise
limited or prohibited by applicable law, (iii) the enforceability would be
considered “predatory” pursuant to written guidelines issued by any applicable
federal, state or local authority having jurisdiction over such matters, (iv)
the related Servicer is unable to locate documentation sufficient to allow
it to
confirm the existence and amount of such Prepayment Charge after using
commercially reasonable efforts to locate such documentation, which efforts
shall include, but are not limited to, seeking such documentation from the
Depositor, the Seller, the Custodians and from its own records or files, (v)
the
Mortgaged Property has been damaged such that the current value of the Mortgaged
Property has been reduced by at least half as a result of a natural disaster
or
other insured or uninsured peril, and the Mortgagor has elected to pay the
Loan
in full rather than rebuild the Mortgaged Property and (vi) with respect to
any
Group 2 Loan, the Prepayment Charge is waived in accordance with Accepted
Servicing Practices for handling outstanding small balances on home equity
lines
of credit similar to the Group 2 Loans. For the avoidance of doubt, the related
Servicer may waive a Prepayment Charge in connection with a short sale or short
payoff on a defaulted Loan. If the related Servicer has waived all or a portion
of a Prepayment Charge relating to a Principal Prepayment, other than as
provided above, the related Servicer shall deliver to the Indenture Trustee
no
later than the Business Day immediately preceding the next Payment Date, for
deposit into the Payment Account the amount of such Prepayment Charge (or such
portion thereof as had been waived) for distribution in accordance with the
terms of the Indenture; provided, however, the related Servicer shall not have
any obligation to pay the amount of any uncollected Prepayment Charge under
this
Section 3.23 if such Servicer did not have a copy of the related Mortgage Note,
such Servicer requested via email a copy of the same from the Indenture Trustee
and the Indenture Trustee failed to provide such a copy within two (2) Business
Days of receipt of such request. If the related Servicer has waived all or
a
portion of a Prepayment Charge for any reason, it shall promptly notify the
Indenture Trustee thereof and shall include such information in any monthly
reports it provides the Indenture Trustee. Notwithstanding any provision in
this
Agreement to the contrary, in the event the Prepayment Charge payable under
the
terms of the Mortgage Note is different from the amount of the Prepayment Charge
set forth in the Mortgage Loan Schedule or other information provided to the
related Servicer, such Servicer shall rely conclusively on the Prepayment Charge
as set forth under the terms of the Mortgage Note. To the extent the Prepayment
Charge payable under the terms of the Mortgage Note is less than the amount
of
the Prepayment Charge set forth in the Loan Schedule or other information
provided to the related Servicer, such Servicer shall not have any liability
or
obligation with respect to such difference, and in addition shall not have
any
liability or obligation to pay the amount of any uncollected Prepayment Charge
if the failure to collect such amount is the direct result of inaccurate or
incomplete information on the Loan Schedule.
ARTICLE
IV
Servicing
Certificates
Section
4.01 Statements
to Securityholders.
Each
Servicer shall provide to the Indenture Trustee, the information (the “Servicing
Certificate”) necessary to calculate the information set forth in Exhibit J ,
and any other information the Indenture Trustee reasonably requires, in such
form as the Indenture Trustee shall reasonably request, or in such form as
may
be mutually agreed upon between such Servicer and the Indenture Trustee, with
respect to each Loan serviced by such Servicer no later than 4:00 PM New York
City time on the Data Remittance Date to enable the Indenture Trustee to
calculate the amounts to be distributed to each Class of Notes and Certificates
and otherwise perform its distribution, accounting and reporting requirements
hereunder and under the Indenture.
Prior
to
the close of business on the Business Day next succeeding each Servicer
Remittance Date, each Servicer shall furnish a written statement to the
Indenture Trustee setting forth the aggregate amounts required to be withdrawn
from the related Custodial Account and deposited into Payment Account, as
applicable, prior to the related Servicer Remittance Date pursuant to
Section 3.03. The determination by a Servicer of such amounts shall, in the
absence of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Owner Trustee and Indenture Trustee shall be protected in
relying upon the same without any independent check or verification. In
addition, upon the Issuer’s written request, each Servicer shall promptly
furnish information reasonably requested by the Issuer that is reasonably
available to such Servicer to enable the Issuer to perform its federal and
state
income tax reporting obligations.
ARTICLE
V
Payment
Account
Section
5.01 Payment
Account.
The
Indenture Trustee shall establish and maintain a Payment Account titled “U.S.
Bank, National Association., as Indenture Trustee, for the benefit of the
Securityholders and the Certificate Paying Agent pursuant to the Indenture,
dated as of the Closing Date, between Home Equity Mortgage Trust 2006-2 and
U.S.
Bank National Association.” The Payment Account shall be an Eligible Account. On
each Payment Date, amounts on deposit in the Payment Account will be distributed
by the Indenture Trustee in accordance with Section 3.05 of the
Indenture.
ARTICLE
VI
THE
SERVICERS AND THE SPECIAL SERVICER
Section
6.01 Liability
of the Servicers and the Special Servicer.
The
Special Servicer and each Servicer shall be liable in accordance herewith only
to the extent of the obligations specifically imposed upon and undertaken by
the
Special Servicer or such Servicer herein.
Section
6.02 Merger
or Consolidation of, or Assumption of the Obligations of the Special Servicer
or
a Servicer.
Any
corporation or other entity into which the Special Servicer or a Servicer may
be
merged or converted or with which it may be consolidated, or any corporation
or
other entity resulting from any merger, conversion or consolidation to which
the
Special Servicer or a Servicer shall be a party, or any corporation or other
entity succeeding to the business of the Special Servicer or a Servicer, shall
be the successor of the Special Servicer or such Servicer, 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.
Each
Servicer or the Special Servicer may assign its rights and delegate its duties
and obligations under this Servicing Agreement (including in connection with
the
sale or transfer of substantially all of its assets); provided
that the
Person accepting such assignment or delegation shall be a Person which is
qualified to service mortgage loans similar to those in the Trust Estate, is
reasonably satisfactory to the Indenture Trustee, the Insurer and the Issuer,
is
willing to service the related Loans and executes and delivers to the Indenture
Trustee and the Issuer an agreement, in form and substance reasonably
satisfactory to the Indenture Trustee, the Insurer and the Issuer, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
related Servicer or the Special Servicer, as applicable, under this Servicing
Agreement; provided
further
that each Rating Agency’s rating of the Securities without regard to the Policy,
in effect immediately prior to such assignment and delegation will not be
qualified, reduced, or withdrawn as a result of such assignment and delegation
(as evidenced by a letter to such effect from each Rating Agency); and provided
further that the Owner Trustee receives an Opinion of Counsel to the effect
that
such assignment or delegation shall not cause the Issuer to be treated as a
corporation for federal or state income tax purposes. Any Person accepting
such
assignment or delegation as a Servicer or as Special Servicer shall be
considered “reasonably satisfactory” to the Indenture Trustee and the Issuer if
the Indenture Trustee or the Issuer, as applicable, does not object to such
assignment within 30 days after notification from the related Servicer or the
Special Servicer of such proposed assignment to such Person.
Section
6.03 Limitation
on Liability of the Servicers, the Special Servicer and Others.
None of
the Special Servicer nor a Servicer nor any of the directors or officers or
employees or agents of the Special Servicer or a Servicer shall be under any
liability to the Issuer, the Owner Trustee, the Indenture Trustee, the Indenture
Trustee or the Securityholders for any action taken or for refraining from
the
taking of any action in good faith pursuant to this Servicing Agreement,
provided, however, that this provision shall not protect the Special Servicer
or
a Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence
in
the performance of its duties hereunder or by reason of its reckless disregard
of its obligations and duties hereunder. The Special Servicer and each Servicer
and any director or officer or employee or agent of the Special Servicer and
each Servicer may rely in good faith on any document of any kind prima facie
properly
executed and submitted by any Person respecting any matters arising hereunder.
The Special Servicer and each Servicer and any director or officer or employee
or agent of the Special Servicer or a Servicer shall be indemnified by the
Issuer and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Servicing Agreement or the
Securities, other than any loss, liability or expense incurred by reason of
its
willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations
and
duties hereunder. None of the Special Servicer nor any Servicer shall be under
any obligation to appear in, prosecute or defend any legal action which is
not
incidental to its duties to service or master service the related Loans in
accordance with this Servicing Agreement, and which in its opinion may involve
it in any expense or liability; provided,
however,
that
the Special Servicer and each Servicer may in its sole discretion undertake
any
such action which it may deem necessary or desirable in respect of this
Servicing Agreement, and the rights and duties of the parties hereto and the
interests of the Securityholders. In such event, the reasonable legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Issuer, the Special Servicer or the
related Servicer shall be entitled to be reimbursed therefor. The Special
Servicer’s and each Servicer’s right to indemnity or reimbursement pursuant to
this Section 6.03 shall survive any resignation or termination of the
Special Servicer or such Servicer pursuant to Section 6.04 or 7.01 with
respect to any losses, expenses, costs or liabilities arising prior to such
resignation or termination (or arising from events that occurred prior to such
resignation or termination).
Section
6.04 Special
Servicer and Servicers Not to Resign.
Subject
to the provisions of Section 6.02, none of the Special Servicer nor any
Servicer shall resign from the obligations and duties hereby imposed on it
except (i) upon determination that the performance of its obligations or duties
hereunder are no longer permissible under applicable law or are in material
conflict by reason of applicable law with any other activities carried on by
it
or its subsidiaries or Affiliates, the other activities of the Special Servicer
or such Servicer so causing such a conflict being of a type and nature carried
on by the Special Servicer or such Servicer or its subsidiaries or Affiliates
at
the date of this Servicing Agreement or (ii) upon satisfaction of the following
conditions: (a) the Special Servicer or such Servicer has proposed a successor
special servicer or servicer to the Issuer and Indenture Trustee in writing
and
such proposed successor special servicer or servicer is reasonably acceptable
to
the Issuer, the Insurer and Indenture Trustee; and (b) each Rating Agency shall
have delivered a letter to the Issuer and Indenture Trustee prior to the
appointment of the successor special servicer or successor servicer stating
that
the proposed appointment of such successor special servicer as Special Servicer
or such successor servicer as Servicer hereunder will not result in the
reduction or withdrawal of the then current rating of the Securities without
regard to the Policy; provided, however, that no such resignation by the Special
Servicer or a Servicer shall become effective until, with
the
consent of the Insurer with respect to a successor servicer of
the
Group 2 Loans, such special servicer or servicer shall have assumed such
Servicer’s or Special Servicer’s responsibilities and obligations hereunder or
the Indenture Trustee shall have designated a special servicer or servicer
in
accordance with Section 7.02. Any such resignation shall not relieve the
Special Servicer or a Servicer of responsibility for any of the obligations
specified in Sections 7.01 and 7.02 as obligations that survive the resignation
or termination of the Special Servicer or a Servicer. Any such determination
permitting the resignation of the Special Servicer or a Servicer as contemplated
by clause (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Indenture Trustee and the Insurer.
Notwithstanding
the foregoing, at the Seller’s request and with the consent of the Insurer with
regards to PNC and the Group 2 Loans, so long as it is the owner of the
servicing rights, PNC, Wilshire, Ocwen or the Special Servicer shall resign
upon
the Seller’s selection and appointment of a successor servicer; provided that
the conditions described in clause (ii) of the above paragraph are
satisfied.
Section
6.05 Delegation
of Duties.
In the
ordinary course of business, each Servicer at any time may delegate any of
its
duties hereunder to any Person, including any of its Affiliates, who agrees
to
conduct such duties in accordance with standards comparable to those with which
such Servicer complies pursuant to Section 3.01. Such delegation shall not
relieve the related Servicer of its liabilities and responsibilities with
respect to such duties and shall not constitute a resignation within the meaning
of Section 6.04.
ARTICLE
VII
Default
Section
7.01 Servicing
Default.
If any
one of the following events (“Servicing Default”) shall occur and be
continuing:
(i) Any
failure by a Servicer to deposit in the related Custodial Account or Payment
Account any deposit required to be made under the terms of this Servicing
Agreement which continues unremedied for a period of three Business Days after
the date upon which written notice of such failure shall have been given to
such
Servicer by the Issuer or the Indenture Trustee; or
(ii) Failure
on the part of a Servicer duly to observe or perform in any material respect
any
other covenants or agreements of such Servicer set forth in this Servicing
Agreement, which failure, in each case, materially and adversely affects the
interests of Securityholders or the Insurer and which continues unremedied
for a
period of 45 days after the date on which written notice of such failure,
requiring the same to be remedied, and stating that such notice is a “Notice of
Default” hereunder, shall have been given to such Servicer by the Issuer or the
Indenture Trustee; or
(iii) The
entry
against a Servicer of a decree or order by a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a trustee,
conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order undischarged or unstayed and in
effect for a period of 60 consecutive days; or
(iv) a
Servicer shall voluntarily go into liquidation, consent to the appointment
of a
conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such Servicer or of or relating to all or
substantially all of its property, or a decree or order of a court, agency
or
supervisory authority having jurisdiction in the premises for the appointment
of
a conservator, receiver, liquidator or similar person in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against such Servicer and such decree or order shall have remained
in force undischarged, unbonded or unstayed for a period of 60 days; or such
Servicer shall admit in writing its inability to pay its debts generally as
they
become due, file a petition to take advantage of any applicable insolvency
or
reorganization statute, make an assignment for the benefit of its creditors
or
voluntarily suspend payment of its obligations; or
(v) any
failure of a Servicer to make any Advance, to the extent required under Section
3.19 in the manner and at the time required to be made from its own funds
pursuant to this Agreement and after receipt of notice from the Indenture
Trustee, which failure continues unremedied after the close of business on
the
Business Day immediately preceding the related Payment Date; or
(vi) with
respect to Ocwen, failure of clause (A) of the Ocwen Termination Test;
(vii) with
respect to PNC, the satisfaction of clause (l) of the definition of “Rapid
Amortization Event”; or
(viii) any
failure of a Servicer to deliver to the Indenture Trustee and the Depositor
the
items required by Section 3.10, 3.11 and 3.15(b) within two Business Days of
notice thereof after the requisite due date from the Indenture Trustee or the
Depositor.
then,
and
in every such case, so long as a Servicing Default shall not have been remedied
by the related Servicer, either the Issuer, the Indenture Trustee, or in the
case of the Group 2 Loans, the Insurer, by notice then given in writing to
the
related Servicer shall terminate all of the rights and obligations of the
related Servicer as servicer under this Servicing Agreement other than its
right
to receive servicing compensation and expenses for servicing the Loans hereunder
and the rights to reimburse itself for Advances and Servicing Advances made
during any period prior to the date of such termination and the Issuer or the
Indenture Trustee may exercise any and all other remedies available at law
or
equity. Any such notice to a Servicer shall also be given to each Rating Agency,
the Insurer and the Issuer. On or after the receipt by a Servicer of such
written notice, all authority and power of such Servicer under this Servicing
Agreement, whether with respect to the Securities or the Loans or otherwise,
shall, subject to Section 7.02 of this Servicing Agreement, pass to and be
vested in the Indenture Trustee (in the case of the termination of a Servicer,
pursuant to and under this Section 7.01; and, without limitation, the
Indenture Trustee, the Indenture Trustee, is hereby authorized and empowered
to
execute and deliver, on behalf of such Servicer , as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of
such
notice of termination, whether to complete the transfer and endorsement of
each
related Loan and related documents, or otherwise. Each Servicer agrees to
cooperate with the Indenture Trustee, the Indenture Trustee, in effecting the
termination of the responsibilities and rights of such Servicer hereunder,
including, without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts relating to the related Loans that
shall at the time be held by such Servicer and to be deposited by it in the
related Custodial Account, or that have been deposited by such Servicer in
the
related Custodial Account or thereafter received by such Servicer with respect
to the related Loans. All reasonable costs and expenses (including, but not
limited to, attorneys’ fees) incurred in connection with amending this Servicing
Agreement to reflect such succession as a Servicer pursuant to this
Section 7.01 shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses.
In
the
case of a Servicing Default pursuant to Section 7.01(v) resulting from the
failure of a Servicer to make a required Advance, the Indenture Trustee shall
prior to the next Payment Date, immediately make such Advance, unless such
Advance would, in its judgment, be a Nonrecoverable Advance, and immediately
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the related Loans and the proceeds thereof, other than
its rights as a Securityholder hereunder and the rights to reimburse itself
for
Advances and Servicing Advances previously made pursuant to this Agreement
and
the right to accrued and unpaid Servicing Fees.
Notwithstanding
any termination of the activities of a Servicer hereunder, such Servicer shall
be entitled to receive, out of any late collection of a payment on a Loan which
was due prior to the notice terminating such Servicer ’s rights and obligations
hereunder and received after such notice, that portion to which the related
Servicer would have been entitled pursuant to Sections 3.03 and 3.09 as well
as
its Servicing Fee in respect thereof, and any other Advances or other amounts
payable to such Servicer hereunder the entitlement to which arose prior to
the
termination of its activities hereunder.
Notwithstanding
the foregoing, a delay in or failure of performance under Section 7.01(i)
or under Section 7.01(ii) after the applicable grace periods specified in
such Sections, shall not constitute a Servicing Default if such delay or failure
could not be prevented by the exercise of reasonable diligence by the related
Servicer and such delay or failure was caused by an act of God or the public
enemy, acts of declared or undeclared war, public disorder, rebellion or
sabotage, epidemics, landslides, lightning, fire, hurricanes, earthquakes,
floods or similar causes. The preceding sentence shall not relieve a Servicer
from using reasonable efforts to perform its respective obligations in a timely
manner in accordance with the terms of this Servicing Agreement and the related
Servicer shall provide the Indenture Trustee, the Insurer and the
Securityholders with notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations. Each Servicer shall
immediately notify the Indenture Trustee and the Owner Trustee in writing of
any
Servicing Default.
Section
7.02 Indenture
Trustee to Act; Appointment of Successor.
(a)
On and
after the time a Servicer receives a notice of termination pursuant to
Section 7.01 or sends a notice pursuant to Section 6.04, the Indenture
Trustee shall be the successor in all respects to that Servicer in its capacity
as a servicer under this Servicing Agreement and the transactions set forth
or
provided for herein and shall be subject to all the responsibilities, duties
and
liabilities relating thereto placed on such Servicer by the terms and provisions
hereof. Nothing in this Servicing Agreement shall be construed to permit or
require the Indenture Trustee to (i) be responsible or accountable for any
act
or omission of a Servicer prior to the issuance of a notice of termination
hereunder, (ii) require or obligate the Indenture Trustee, in its capacity
as
successor Servicer, to purchase, repurchase or substitute any Loan, (iii) fund
any Additional Balances with respect to any Loan, (iv) pay any deductible under
an insurance policy pursuant to Section 3.04, (v) fund any losses on any
Permitted Investment directed by any other Servicer, (vi) make Advances if
it is
prohibited from doing so by applicable law or (vii) be responsible for the
representations and warranties of a Servicer . As compensation therefor, the
Indenture Trustee shall be entitled to such compensation as the related Servicer
would have been entitled to hereunder, in each case if no such notice of
termination had been given. Notwithstanding the above, (i) if the Indenture
Trustee is unwilling to act as successor Servicer, or (ii) if the Indenture
Trustee is legally unable so to act, the Indenture Trustee may (in the situation
described in clause (i)) or shall (in the situation described in clause (ii))
appoint or petition a court of competent jurisdiction to appoint any established
housing and home finance institution, bank or other mortgage loan or home equity
loan servicer having a net worth of not less than $10,000,000 as the successor
to the related Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer hereunder; provided
that the
appointment of any such successor Servicer will not result in the qualification,
reduction or withdrawal of the ratings assigned to the Securities by the Rating
Agencies. Pending appointment of a successor to a Servicer hereunder, unless
the
Indenture Trustee is prohibited by law from so acting, the Indenture Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on related Loans in an amount equal to the
compensation which the related Servicer would otherwise have received pursuant
to Section 3.09 (or such lesser compensation as the Indenture Trustee and
such successor shall agree). The appointment of a successor Servicer shall
not
affect any liability of the predecessor Servicer which may have arisen under
this Servicing Agreement prior to its termination as a Servicer (including,
without limitation, the obligation to pay any deductible under an insurance
policy pursuant to Section 3.04), nor shall any successor Servicer be
liable for any acts or omissions of the predecessor Servicer or for any breach
by such Servicer of any of its representations or warranties contained herein
or
in any related document or agreement. The Indenture Trustee and such successor
shall take such action, consistent with this Servicing Agreement, as shall
be
necessary to effectuate any such succession.
(b) Any
successor, including the Indenture Trustee, to the related Servicer as servicer
shall during the term of its service as servicer (i) continue service and
administer the related Loans for the benefit of the Securityholders and, in
the
case of the Group 2 Loans, the Insurer and (ii) maintain in force a policy
or
policies of insurance covering errors and omissions in the performance of its
obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as such Servicer is so
required pursuant to Section 3.13.
(c) Any
successor Servicer, including the Indenture Trustee, shall not be deemed in
default or to have breached its duties hereunder if the predecessor Servicer
shall fail to deliver any required deposit to the related Custodial Account
or
otherwise cooperate with any required servicing transfer or succession
hereunder.
(d) In
connection with the termination or resignation of a Servicer hereunder, either
(i) the successor Servicer (including the Indenture Trustee as a successor
Servicer), shall represent and warrant that it is a member of MERS in good
standing and shall agree to comply in all material respects with the rules
and
procedures of MERS in connection with the servicing of the Loans that are
registered with MERS, in which case the predecessor Servicer shall cooperate
with the successor Servicer (including the Indenture Trustee, if applicable)
in
causing MERS to revise its records to reflect the transfer of servicing to
the
successor Servicer as necessary under MERS’ rules and regulations, or (ii) the
predecessor Servicer shall cooperate with the successor Servicer in causing
MERS
to execute and deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Indenture Trustee and to execute and deliver
such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Loan or servicing of such Loan on the MERS® System
to the successor Servicer. The predecessor Servicer shall file or cause to
be
filed any such assignment in the appropriate recording office. In connection
with the termination or resignation (other than a resignation pursuant to the
second paragraph of Section 6.04) of a Servicer, the predecessor Servicer shall
bear any and all fees of MERS, costs of preparing any assignments of Mortgage,
and fees and costs of filing any assignments of Mortgage that may be required
under this subsection (d). The successor Servicer shall cause such
assignment to be delivered to the Indenture Trustee or the Custodian promptly
upon receipt of the original with evidence of recording thereon or a copy
certified by the public recording office in which such assignment was
recorded.
Section
7.03 Notification
to Securityholders.
Upon
any termination of or appointment of a successor to a Servicer pursuant to
this
Article VII or Section 6.04, the Indenture Trustee shall give prompt
written notice thereof to the Securityholders, the Insurer, the Issuer and
each
Rating Agency.
ARTICLE
VIII
Miscellaneous
Provisions
Section
8.01 Amendment.
This
Servicing Agreement may be amended, with the consent of the Insurer, from time
to time by the parties hereto, provided that any amendment be accompanied by
a
letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Securities without
regard to the Policy and a tax opinion to the effect that neither such amendment
nor any action permitted by such amendment and not otherwise permitted by this
Agreement will cause either REMIC IA, REMIC IB, REMIC IC, REMIC ID, REMIC IIA,
REMIC IIB or REMIC IIC to fail to qualify as a REMIC or give rise to the
imposition of a tax on “prohibited transactions” of a REMIC on either REMIC IA,
REMIC IB, REMIC IC, REMIC ID, REMIC IIA, REMIC IIB or REMIC IIC. Promptly after
the execution by the Servicers, the Issuer, the Special Servicer and Indenture
Trustee of any amendment of this Servicing Agreement pursuant to this
Section 8.01, the Indenture Trustee shall provide the Custodian with
written copies thereof. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amendment.
Section
8.02 GOVERNING
LAW.
THIS
SERVICING 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
8.03 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 certified
mail, return receipt requested, to (a) in the case of Wilshire, Wilshire Credit
Corporation, 00000 XX Xxxxxxxx Xxx, Xxxxx 000, Xxxxxxxxx, Xxxxxx 00000
Attention: Xxx Xxxxxxx, with a copy to Stoel Rives LLP, 000 XX Xxxxx, Xxxxxxxx,
Xxxxxx 00000 Attention: Xxxx Xxxxxx, (b) in the case of Ocwen, Ocwen Loan
Servicing, LLC, 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx
Xxxxx, XX 00000, Attention: Secretary, (c) in the case of PNC, PNC Bank, N.A.,
0000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: PNCCS Manager,
with a copy to One PNC Plaza - 21st Floor, 000 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Chief Counsel, Consumer Bank Group, (d) in the
case of SPS, Select Portfolio Servicing, Inc., 0000 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx
Xxxx, Xxxx, Attention: General Counsel, (e) in the case of Xxxxx’x, Home Loan
Monitoring Group, 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
(f) in the case of Standard & Poor’s, 00 Xxxxx Xxxxxx - 41st Floor, New
York, New York 10041, Attention: Residential Mortgage Surveillance Group, (g)
in
the case of Fitch, Inc. Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (h)
in
the case of the Owner Trustee, Wilmington Trust Company, as set forth in the
Trust Agreement, (i) in the case of the Indenture Trustee, U.S. Bank National
Association, Corporate Trust Services, 00 Xxxxxxxxxx Xxxxxx, Mailcode:
EP-MN-WS3D, Xx. Xxxx, Xxxxxxxxx 00000-0000, Attention: Structured Finance -
ABSC
HEMT 2006-2 and (j) in the case of the Underwriter, at Credit Suisse Securities
(USA) LLC, 00 Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Home Equity Mortgage Trust 2006-2, (i) or, as to each party, at
such
other address as shall be designated by such party in a written notice to each
other party. Any notice required or permitted to be mailed to a Securityholder
shall be given by first class mail, postage prepaid, at the address of such
Securityholder as shown in the Register. Any notice so mailed within the time
prescribed in this Servicing Agreement shall be conclusively presumed to have
been duly given, whether or not the Securityholder receives such notice. Any
notice or other document required to be delivered or mailed by the Indenture
Trustee to any Rating Agency shall be given on a reasonable efforts basis and
only as a matter of courtesy and accommodation and the Indenture Trustee shall
have no liability for failure to delivery such notice or document to any Rating
Agency.
Section
8.04 Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Servicing
Agreement shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Servicing Agreement and
shall
in no way affect the validity or enforceability of the other provisions of
this
Servicing Agreement or of the Securities or the rights of the Securityholders
thereof.
Section
8.05 Third-Party
Beneficiaries.
This
Servicing Agreement will inure to the benefit of and be binding upon the parties
hereto, the Securityholders, the Insurer with regard to the Group 2 Loans,
the
Owner Trustee and their respective successors and permitted assigns. Except
as
otherwise provided in this Servicing Agreement, no other Person will have any
right or obligation hereunder.
Section
8.06 Counterparts.
This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
8.07 Effect
of Headings and Table of Contents.
The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section
8.08 Termination.
The
respective obligations and responsibilities of the Servicers, the Special
Servicer, the Issuer and the Indenture Trustee created hereby shall terminate
upon the last action required to be taken by the Issuer pursuant to the Trust
Agreement and by the Indenture Trustee pursuant to the Indenture following
the
later of the date on or before which the Indenture or Trust Agreement is
terminated.
Section
8.09 Certain
Matters Affecting the Indenture Trustee.
For all
purposes of this Servicing Agreement, in the performance of any of its duties
or
in the exercise of any of its powers hereunder, the Indenture Trustee shall
be
subject to and entitled to the benefits of Article VI of the
Indenture.
Section
8.10 Owner
Trustee Not Liable for Loan Files.
The
recitals contained herein shall not be taken as the statements of the Owner
Trustee, and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Servicing Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Loan Files. The Owner Trustee shall at
no
time have any responsibility or liability with respect to the sufficiency of
the
Owner Trust Estate or its ability to generate the payments to be distributed
to
Certificateholders under the Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
It
is
expressly understood and agreed by the parties hereto that with respect to
the
execution of this Servicing Agreement by Wilmington Trust Company (the “Trust
Company”) for the Issuer (a) this Servicing Agreement is executed and delivered
by the Trust Company, not individually or personally, but solely as Owner
Trustee, in the exercise of the powers and authority conferred and vested in
it,
pursuant to the Trust Agreement, (b) each of the representations, undertakings
and agreements herein made on the part of the Issuer is made and intended not
as
personal representations, undertakings and agreements by the Trust Company
but
is made and intended for the purpose for binding only the Issuer, (c) nothing
herein contained shall be construed as creating any liability on the Trust
Company, individually or personally, to perform any covenant either expressed
or
implied contained herein, all such liability, if any, being expressly waived
by
the parties hereto and by any person claiming by, through or under the parties
hereto, and (d) under no circumstances shall the Trust Company be personally
liable for the payment of any indebtedness or expenses of the Issuer or be
liable for the breach or failure of any obligation, representation, warranty
or
covenant made or undertaken by the Issuer under this Servicing Agreement or
any
other related documents.
Section
8.11 Entire
Agreement.
(a) This
Servicing Agreement shall constitute the entire agreement between the parties
with respect to the matters contained herein and shall supercede any prior
written or oral agreements relating thereto.
IN
WITNESS WHEREOF, the Servicers, the Special Servicer, the Indenture Trustee
and
the Issuer have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
| WILSHIRE CREDIT CORPORATION, as a Servicer | ||
| |
|
|
| By: | /s/ Xxx Xxxx | |
|
Name: Xxx Xxxx |
||
| Title: Senior Vice President | ||
| OCWEN LOAN SERVICING, LLC, as a Servicer | ||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxx | |
|
Name: Xxxxxxx Xxxxxxx |
||
| Title: Authorized Representative | ||
| PNC BANK, N.A., as a Servicer | ||
| |
|
|
| By: | /s/ Xxxxx XxXxxxxx | |
|
Name: Xxxxx XxXxxxxx |
||
| Title: Senior Vice President | ||
| SELECT PORTFOLIO SERVICING, INC., as a Special Servicer | ||
| |
|
|
| By: | /s/ Xxxxxxx X. X'Xxxxx | |
|
Name: Xxxxxxx X. X'Xxxxx |
||
| Title: Executive Vice President of Operations | ||
| HOME EQUITY MORTGAGE TRUST 2006-2 | ||
| |
|
WILMINGTON
TRUST COMPANY, not in its individual capacity but solely as
Owner
Trustee |
| By: |
/s/
Xxxxx X. Xxxxxxx
|
|
|
Name: Xxxxx X. Xxxxxxx |
||
| Title: Senior Financial Services Officer | ||
|
U.S.
BANK NATIONAL ASSOCIATION,
not
in its individual capacity but solely as Indenture
Trustee
|
||
| |
|
|
| By: |
/s/
Xxxxx
Xxxxxx
|
|
|
Name: Xxxxx Xxxxxx |
||
| Title: Assistant Vice President | ||
|
XXXXXXX
FIXED INCOME SERVICES INC.
hereby
acknowledges Section 3.17 and Section
3.18
of this Agreement
|
|||
| By: /s/ Xxx Xxxxxx | |||
|
|
|||
|
Name:
Xxx Xxxxxx
Title:
Vice President
|
EXHIBIT
A
LOAN
SCHEDULE
[TO
BE PROVIDED UPON REQUEST]
|
|
EXHIBIT
B
LIMITED
POWER OF ATTORNEY
KNOW
ALL
MEN BY THESE PREMISES:
In
connection with the servicing of the Loans (each a “Loan” and collectively, the
“Loans”) under the Servicing Agreement, dated as of April 28, 2006, among
Wilshire Credit Corporation (“Wilshire”), Ocwen Loan Servicing, LLC (“Ocwen”),
PNC Bank, N.A. (“PNC”), Select Portfolio Servicing, Inc. (“SPS”), Home Equity
Mortgage Trust 2006-2 (“Issuer”) and U.S. Bank National Association ( “Indenture
Trustee”), Indenture Trustee does hereby constitute and appoint [______________]
(the “Servicer”) as true and lawful attorneys for Indenture Trustee (but only
for the purposes set forth herein) and pursuant to Section 3.01(and Section
3.08, if applicable) of the Servicing Agreement hereby authorizes and empowers
each such attorney, for and in the name and stead of Indenture Trustee to
endorse, execute or deliver any and all documents or instruments of satisfaction
or cancellations or of partial or full release or discharge, and all other
comparable instruments, with respect to the related Loans, all in accordance
with the terms of the Servicing Agreement, including, without limitation, the
recording or filing with the appropriate public officials of such documents
or
instruments and the endorsement and deposit of any such instrument in connection
with the foreclosure of any such Loan or bankruptcy or receivership of the
Mortgagor of any such Loan. Capitalized terms used and not otherwise defined
herein shall have the respective meaning ascribed to such term in the Serving
Agreement.
Indenture
Trustee covenants and agrees that it shall, from time to time after the date
hereof, at the request of Servicer, execute instruments confirming all of the
foregoing authority of any of the attorneys or substitute attorneys. The
foregoing shall not be deemed to be a breach by reason of any action or omission
of any of the attorneys or such substitute attorneys as may be appointed
hereunder.
This
power of attorney is revocable by the Indenture Trustee.
IN
WITNESS WHEREOF, the Indenture Trustee has caused this instrument to be signed
by its duly authorized officer on this ____ of ________-, 200_.
U.S.
BANK
NATIONAL ASSOCIATION, not in its individual capacity, but solely as Indenture
Trustee under the Indenture
By:_____________________________________
Name:
__________________________________
Title:___________________________________
|
|
STATE
OF
)
SS.
COUNTY
OF )
On
this
__ day of ____________, 2006, before me the undersigned, Notary Public of said
State, personally appeared _______________________________ and
_____________________ personally known to me to be duly authorized officers
of
U.S. Bank National Association that executed the within instrument and
personally known to me to be the persons who executed the within instrument
on
behalf of U.S. Bank National Association therein named, and acknowledged to
me
such U.S. Bank National Association executed the within instrument pursuant
to
its by-laws.
| WITNESS my hand and official seal. | ||||
| Notary Public in and for the | ||||
| State of | ||||
| After recording, please mail to: | ||||
| Attn:. | ||||
|
|
EXHIBIT
C
FORM
OF
REQUEST FOR RELEASE
MBMS
Standard Collateral Release File Layout
This
format is used for RELEASING COLLATERAL RECORDS.
|
Data
|
Type
|
Length
|
Dec
|
Definition
/ Comments
|
|
Customer
Code
|
C
|
4
|
0
|
Assigned
by custodian
|
|
Pool
Number
|
C
|
10
|
0
|
Pool
number
|
|
Loan
Number
|
C
|
13
|
0
|
Loan
number of collateral
|
|
Estimated
Return Date
|
C
|
8
|
0
|
Date
loan is expected to be returned (optional) YYYYMMDD
|
|
Ship
Destination
|
C
|
6
|
0
|
Location
Code
|
|
Release
Code
|
C
|
2
|
0
|
Release
Code Value (Ex. 1 - Payoff, 2- Foreclosure)
|
|
Document
List
|
C
|
30
|
0
|
Free-form
list of documents to be released with collateral file
(optional)
|
|
Description
|
C
|
30
|
0
|
Notations
(optional)
|
|
Requestor
|
C
|
20
|
0
|
Name
of party requesting release of documents
|
|
Signator
|
C
|
4
|
0
|
Signator
ID for electronic signator must be assigned by LaSalle
|
|
Amend
|
C
|
1
|
0
|
Signifies
if the release is amended:
0
-
Do not amend
1
-
Amend Existing Release
|
NOTES:
1.) File
is
128 characters in length.
2.) Dates
should be YYYYMMDD.
Customer
Code = 1007
Pool
Number = CSFB-BULK or the private security deal itself
Loan
Number = CSFB Loan #
EST
Return is blank
Ship
Destination =
PDPO
=
PAID IN
FULL
SALE =
SOLD TO
ANOTHER INVESTOR OR CUSTODIAN
FORC
=
FORECLOSURE
NLIQ
=
NON
LIQUIDATION
OLIQ
=
OTHER
LIQUIDATION - REPURCHASE
Release
Codes =
1
- PAID
IN FULL
2
-
FORECLOSURE
4- OTHER
LIQUIDATION
5- NON-LIQUIDATION
8- SALE
Document
List = blank
Description
= blank
Requestor
= who is requesting file
Signator
= who’s electronic signature to use - once we set this up
Amend
= 0
= do not amend
1
= Amend
- this is used when you have a file out for foreclosure and you pay it off
-
never intending to return the file to LaSalle
|
|
EXHIBIT
D-1
[RESERVED]
|
|
EXHIBIT
D-2
FORM
OF
SERVICER CERTIFICATION
|
Re:
|
Asset
Backed Securities Corporation
Home
Equity Loan-Backed Notes, Series
2006-2
|
I,
___________________________, a duly elected and acting officer of
[__________________] (the “Servicer”), certify pursuant to Section 3.15(c) of
the Servicing Agreement to the Depositor, the Indenture Trustee and each Person,
if any, who “controls” the Depositor or the Indenture Trustee within the meaning
of the Securities Act of 1933, as amended, and their respective officers and
directors, with respect to the calendar year immediately preceding the date
of
this Certificate (the “Relevant Year”), as follows:
(a) For
purposes of this Certificate, “Relevant Information” means the information in
the certificate provided pursuant to Section 3.10 of the Servicing Agreement
(the “Annual Statement of Compliance”) and the assessment provided pursuant to
Section 3.11 of the Servicing Agreement (the “Assessment of Compliance”) for the
Relevant Year and the information in all servicing reports required pursuant
to
the Indenture to be provided by the Servicer to the Indenture Trustee during
the
Relevant Year (as such information is amended or corrected in writing and
delivered to the Indenture Trustee). Based on my knowledge, the Relevant
Information, taken as a whole, does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein
which is necessary to make the statements made therein, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the Relevant Year;
(b) The
Relevant Information required to be provided to the Indenture Trustee under
the
Indenture has been provided to the Indenture Trustee;
(c) I
am
responsible for reviewing the activities performed by the Servicer under the
Indenture during the Relevant Year. Based upon the review required under the
Servicing Agreement and my knowledge and except as disclosed in the Annual
Statement of Compliance, Assessment
of Compliance
or the
accountants’ attestation provided pursuant to Section 3.11 of the Servicing
Agreement, the Servicer has fulfilled its obligations under the Servicing
Agreement in all material respects throughout the Relevant Year.
Capitalized
terms used but not defined herein have the meanings ascribed to them in the
Indenture, dated April 1, 2007 (the “Indenture”), among Asset Backed Securities
Corporation, as depositor (the “Depositor”), Wilshire Credit Corporation, as a
servicer (“Wilshire”), Ocwen Loan Servicing, LLC, as a servicer (“Ocwen”),
Select Portfolio Servicing, Inc. as special servicer (“SPS”) and U.S. Bank
National Association as Indenture Trustee (the “Indenture
Trustee”).
[_________________],
as
Servicer
By:
Name:
Title:
Date:
|
|
EXHIBIT
E
CHARGED
OFF LOAN DATA REPORT
(Available
Upon Request)
|
|
EXHIBIT
F
SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Key:
X
-
obligation
Where
there are multiple checks for criteria the attesting party will identify in
their management assertion that they are attesting only to the portion of the
distribution chain they are responsible for in the related transaction
agreements.
|
Reg
AB Reference
|
Servicing
Criteria
|
Servicer
and
Special
Servicer
|
Custodian
|
IndentureTrustee
|
||||
|
General
Servicing Considerations
|
||||||||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
(Ocwen
and PNC only)
|
X
|
|||||
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
||||||
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the Pool Assets are maintained.
|
N/A
|
||||||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
||||||
|
Cash
Collection and Administration
|
||||||||
|
1122(d)(2)(i)
|
Payments
on pool assets are deposited into the appropriate custodial bank
accounts
and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
||||||
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
X
|
|||||
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
||||||
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
N/A
|
X
|
|||||
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
||||||
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
(n/a
for PNC)
|
||||||
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
||||||
|
Investor
Remittances and Reporting
|
||||||||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of Pool Assets serviced by the Servicer.
|
X
|
||||||
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
||||||
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
||||||
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
||||||
|
Pool
Asset Administration
|
||||||||
|
1122(d)(4)(i)
|
Collateral
or security on pool assets is maintained as required by the transaction
agreements or related pool asset documents.
|
X
|
X
|
|||||
|
1122(d)(4)(ii)
|
Pool
assets and related documents are safeguarded as required by the
transaction agreements
|
X
|
X
|
|||||
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
X
|
|||||
|
1122(d)(4)(iv)
|
Payments
on pool assets, including any payoffs, made in accordance with the
related
pool asset documents are posted to the Servicer’s obligor records
maintained no more than two business days after receipt, or such
other
number of days specified in the transaction agreements, and allocated
to
principal, interest or other items (e.g., escrow) in accordance with
the
related pool asset documents.
|
X
|
||||||
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the pool assets agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
||||||
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
||||||
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
||||||
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
pool
asset is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
||||||
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for pool assets with variable
rates
are computed based on the related pool asset documents.
|
X
|
||||||
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s pool asset documents,
on at least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents and
state
laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such other
number of
days specified in the transaction agreements.
|
X
(n/a
for PNC)
|
||||||
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
||||||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
||||||
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
||||||
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
||||||
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
N/A
|
X
|
|||||
|
|
EXHIBIT
G
FORM
OF
PNC REPORT TO CREDIT RISK MANAGER
|
Name*
|
Text
|
|||||||||||
|
Loan
Number
|
Number | |||||||||||
|
Deal
Identifier by Loan
|
Text | |||||||||||
|
Original
FICO Score*
|
Number | |||||||||||
|
Original
Occupancy*
|
Text | |||||||||||
|
Documentation
(full, limited, stated, etc.)*
|
Text | |||||||||||
|
Purpose
(home improvement, debt consolidation, purchase)*
|
Text | |||||||||||
|
Original
Maximum Credit Line*
|
Number | |||||||||||
|
Original
Balance or Initial Draw*
|
Number | |||||||||||
|
Original
Appraisal Value*
|
Number | |||||||||||
|
Original
Maximum LTV*
|
Number | |||||||||||
|
Original
Senior Lien LTV*
|
Number | |||||||||||
|
Original
Senior Lien Balance*
|
Number | |||||||||||
|
Original
Interest Rate*
|
Number | |||||||||||
|
First
Payment Date*
|
MM/DD/YY | |||||||||||
|
Origination
Date*
|
MM/DD/YY | |||||||||||
|
Originator*
|
Text | |||||||||||
|
Loan
Term*
|
Number | |||||||||||
|
Product
Type (adjustable rate or fixed rate)*
|
Text | |||||||||||
|
Property
Type (single family residence, condo, etc)*
|
Text | |||||||||||
|
Street
Address*
|
Text | |||||||||||
|
City*
|
Text | |||||||||||
|
Zip
Code*
|
Text | |||||||||||
|
State*
|
Text | |||||||||||
|
Lien
Position*
|
Text/Number | |||||||||||
|
Date
Loan Transferred (if applicable)
|
MM/DD/YY | |||||||||||
|
Current
Senior Lien Balance
|
Number | |||||||||||
|
Current
Senior Lien Holder
|
Text | |||||||||||
|
Senior
Lien in Foreclosure Flag
|
Text (Y or N) | |||||||||||
|
Estimated
or Actual Senior Lien Foreclosure Sale Date
|
MM/DD/YY | |||||||||||
|
Current
FICO
|
Number | |||||||||||
|
Current
Outstanding Balance
|
Number | |||||||||||
|
Current
LTV
|
Number | |||||||||||
|
Current
Interest Rate
|
Number | |||||||||||
|
Current
Monthly Payment Amount
|
Number | |||||||||||
|
Number
of Advances (number
of advances per loan per month)
|
Number
|
|||||||||||
|
Monthly
Advances ($ amount of each loan’s advances for the month)
|
Number
|
|||||||||||
|
Last
Interest Payment Date (date of last due date advancing
payment)
|
MM/DD/YY
|
|||||||||||
|
Last
Interest Payment Amount
|
Number | |||||||||||
|
Frozen
Account Flag
|
Text (Y or N) | |||||||||||
|
Force-Placed
Insurance Flag
|
Text (Y or N) | |||||||||||
|
Force-Placed
Flood Insurance Flag
|
Text (Y or N) | |||||||||||
|
Re-aged
Account Flag
|
Text (Y or N) | |||||||||||
|
Last
Principal Payment Amount
|
Number | |||||||||||
|
Last
Principal Payment Date
|
MM/DD/YY | |||||||||||
|
Paid
Off Code (write off, charge off, borrower payoff)
|
Text | |||||||||||
|
Payoff
Date
|
MM/DD/YY | |||||||||||
|
Delinquency
Status (30-days, 60-days, etc.)
|
Text | |||||||||||
|
Current
Market Value
|
Number | |||||||||||
|
Date
of Market Value
|
M/DD/YY | |||||||||||
|
As-is
Value
|
Number | |||||||||||
|
Repaired
Value
|
Number | |||||||||||
|
Type
of Valuation
|
Text | |||||||||||
|
Foreclosure
Flag
|
Text (Y or N) | |||||||||||
|
Bankruptcy
Flag
|
Text (Y or N) | |||||||||||
|
REO
Flag
|
Text (Y or N) | |||||||||||
|
Foreclosure
Start Date (Referral Date)
|
MM/DD/YY | |||||||||||
|
Scheduled
Foreclosure Sale Date
|
MM/DD/YY | |||||||||||
|
Foreclosure
Actual Sale Date
|
MM/DD/YY | |||||||||||
|
Actual
Notice of Intent Date
|
MM/DD/YY | |||||||||||
|
Actual
First Legal Date
|
MM/DD/YY | |||||||||||
|
Bankruptcy
Chapter
|
Number | |||||||||||
|
Actual
Bankruptcy Start Date
|
MM/DD/YY | |||||||||||
|
Actual
Bankruptcy End Date
|
MM/DD/YY | |||||||||||
|
Actual
Payment Plan Start Date
|
MM/DD/YY | |||||||||||
|
Actual
Payment Plan End Date
|
MM/DD/YY | |||||||||||
|
Payment
Plan Term
|
Number | |||||||||||
|
Actual
REO Start Date
|
MM/DD/YY | |||||||||||
|
REO
List Date
|
MM/DD/YY | |||||||||||
|
REO
List Price
|
Number | |||||||||||
|
Vacancy/Occupancy
Status
|
Text | |||||||||||
|
Actual
Eviction Start Date
|
MM/DD/YY | |||||||||||
|
Actual
Eviction Completion Date
|
MM/DD/YY | |||||||||||
|
Sales
Price
|
Number | |||||||||||
|
Actual
Closing Date
|
MM/DD/YY | |||||||||||
|
Net
Sales Proceeds
|
Number | |||||||||||
|
Current
Max Line Amount
|
Number | |||||||||||
|
Number
of times 30-59 (Lifetime to date)
|
Number | |||||||||||
|
Number
of times 60-89 (Lifetime to date)
|
Number | |||||||||||
|
Number
of times 90-119 (Lifetime to date)
|
Number | |||||||||||
|
Number
of times 120-149 (Lifetime to date)
|
Number | |||||||||||
|
Number
of times 150-179 (Lifetime to date)
|
Number | |||||||||||
|
Initial
Debt-to-Income Ratio
|
Number | |||||||||||
|
Initial
Monthly Income
|
Number | |||||||||||
|
Initial
Time at Employer
|
Number | |||||||||||
|
Initial
Time at Residence
|
Number | |||||||||||
|
Employer
|
Text | |||||||||||
|
Charge
off Date
|
MM/DD/YY | |||||||||||
|
Charge
off Amount
|
Number | |||||||||||
|
Current
Past Due Amount
|
Number | |||||||||||
|
Number
of Advances (Year to Date)
|
Number | |||||||||||
|
Dollar
Amount Advanced (Year to Date)
|
Number | |||||||||||
|
Next
Payment Due Date
|
MM/DD/YY | |||||||||||
|
Self
Employed Flag
|
Y/N
|
|||||||||||
|
Fraud
Account Flag
|
Y/N | |||||||||||
|
Type
of Fraud
|
Text | |||||||||||
|
Date
of Fraud Identification
|
MM/DD/YY | |||||||||||
|
Date
of Last Re-Age
|
MM/DD/YY | |||||||||||
|
Number
of Re-Ages
|
Number | |||||||||||
|
Number
of Months Re-Aged
|
Number | |||||||||||
|
Last
Contact Date by Collections
|
MM/DD/YY | |||||||||||
|
Teaser
Rate
|
Number | |||||||||||
|
Teaser
Rate Period
|
Number | |||||||||||
|
Reset
Frequency
|
Text | |||||||||||
|
Initial
Appraisal Type
|
Text | |||||||||||
|
Percentage
of Credit Line Used
|
Number | |||||||||||
|
Credit
Line Closed Flag
|
Text | |||||||||||
|
Early
Termination Fee (where applicable)
|
Number | |||||||||||
|
PPP
Collected (where applicable)
|
Number | |||||||||||
|
PPP
Flag (where applicable)
|
Text | |||||||||||
|
PPP
Waived (where applicable)
|
Number | |||||||||||
|
PPP
Expiration Date (where applicable)
|
MM/DD/YY | |||||||||||
|
|
EXHIBIT
H
DATA
FIELDS FOR WILSHIRE SERVICED LOANS TRANSFERRED TO SPS
|
Fieldname
|
Field
Purpose/Definition
|
|||
|
#
of Units
|
#
of separately livable units in the Collateral
|
|||
|
Balloon
Ind
|
Yes
or No Indicator
|
|||
|
Accelerated
|
Has
the loan been sent a demand letter
|
|||
|
SPS
Loan ID#
|
Assigned
from a pre-established list of available loan#'s provided by
SPS
|
|||
|
Loan
Amount
|
Original
Loan Amount
|
|||
|
Original
Payment Amount
|
Orig
P&I per Note
|
|||
|
P&I
Pmt
|
Current
P&I
|
|||
|
Sch
Prin Balance
|
UPB
purchased from seller
|
|||
|
Unpaid
Principal Balance
|
Transfer
UPB
|
|||
|
Close
Date
|
Date
of Note or date of closing loan
|
|||
|
First
Due
|
1st
Pmt Date per Note
|
|||
|
Next
Due
|
1st
Due to SPS
|
|||
|
Maturity
Date
|
Date
loan matures
|
|||
|
Interest
Paid Thru
|
For
amortizing loans, 1 month and 1 day prior to Next Due
|
|||
|
Term
Months
|
loan
term expressed in # of months to maturity
|
|||
|
Amortization
Term
|
term
in # of months over which P&I is amortized
|
|||
|
Interest
Calc Method
|
Code
for type of interest accrual/application
|
|||
|
Original
Interest Rate
|
Orig
Interest Rate per Note
|
|||
|
Current
Int Rate
|
Current
Effective Interest Rate
|
|||
|
Xxxx
1 First Name
|
|
|||
|
Xxxx
1 Middle Name
|
|
|||
|
Xxxx
1 Last Name
|
|
|||
|
Xxxx
1 Suffix
|
|
|||
|
Xxxx
2 First Name
|
|
|||
|
Xxxx
2 Middle Name
|
|
|||
|
Xxxx
2 Last Name
|
|
|||
|
Xxxx
2 Suffix
|
||||
|
Xxxx
1 SSN
|
Primary
borrower's SS# or TaxID#
|
|||
|
Xxxx
2 SSN
|
Coborrower's
SS# or TaxID#
|
|||
|
Xxxx
1 Home Tele
|
||||
|
Xxxx
2 Home Tele
|
||||
|
Xxxx
1 Work Tele
|
||||
|
Xxxx
2 Work Tele
|
||||
|
Property
Addr 1
|
collateral
property address
|
|||
|
Property
Addr 2
|
collateral
property address
|
|||
|
Property
City
|
collateral
property address
|
|||
|
Property
State
|
collateral
property address
|
|||
|
Property
Zip
|
collateral
property address
|
|||
|
Maling
Addr 1
|
borrower
mailing address/billing address
|
|||
|
Mailing
Addr2
|
borrower
mailing address/billing address
|
|||
|
Mailing
City
|
borrower
mailing address/billing address
|
|||
|
Mailing
State
|
borrower
mailing address/billing address
|
|||
|
Mailing
Zip
|
borrower
mailing address/billing address
|
|||
|
Property
Type
|
||||
|
Lien
Position
|
||||
|
Late
Charge Code
|
Code
for type of late charge
|
|||
|
Late
Chg Amt
|
Fixed
Dollar Amount of late charge, if applicable
|
|||
|
Late
Chg Rate
|
%
of Late Charge for calculation
|
|||
|
Late
Charge Min
|
Minimum
Late Charge per Note terms
|
|||
|
Late
Charge Max
|
Maximum
Late Charge per Note terms
|
|||
|
Days
Before Late Charges
|
Grace
Period before imposing Late Fees
|
|||
|
FHA/VA
Case#
|
if
applicable
|
|||
|
MERS
MIN #
|
Provide
for all loans registered on MERS system
|
|||
|
PMI
Certificate #
|
Populate
if loan carries Mtg Insurance
|
|||
|
Points
|
||||
|
Points
Paid By
|
||||
|
Flood
Zone
|
Zone
per Flood Map
|
|||
|
Flood
Insurance
|
Y/N
flag to indicate if collateral is in zone requiring flood
insurance
|
|||
|
Escrow
Pmt
|
if
applicable
|
|||
|
Escrow
Balance
|
if
applicable
|
|||
|
Int
Paid at Closing
|
Any
interest collected at closing for days to end of month
|
|||
|
Misc
Suspense Balance
|
Sum
of unapplied funds, if any
|
|||
|
Prepay
Indicator
|
Y/N
flag to indicate if the loan terms call for a penalty on
prepayments
|
|||
|
Mortgage
Type
|
Code
for type of loan
|
|||
|
Loan
Purpose
|
Code
for purpose of loan
|
|||
|
Occupancy
Status
|
HMDA
status at origination (provide code definitions, if coded)
|
|||
|
Appraised
Value
|
Value
of appraisal at origination
|
|||
|
Arm
Index
|
if
applicable
|
|||
|
1st
Adj Period (mos)
|
if
applicable
|
|||
|
Rate
Change Frequency
|
if
applicable
|
|||
|
Payment
Change Frequency
|
if
applicable
|
|||
|
1st
Max Adj Cap
|
if
applicable
|
|||
|
1st
Min Adj Cap
|
if
applicable
|
|||
|
Reg
Max Adj Cap
|
if
applicable
|
|||
|
Reg
Min Adj Cap
|
if
applicable
|
|||
|
Rounding
Factor
|
if
applicable
|
|||
|
Round
Basis
|
if
applicable
|
|||
|
Lookback
Period Days
|
if
applicable
|
|||
|
1st
Index Rate
|
if
applicable
|
|||
|
1st
Rate Adj Date
|
if
applicable
|
|||
|
1st
Pmt Adj Date
|
if
applicable
|
|||
|
2nd
Rate Adj Date
|
if
applicable
|
|||
|
2nd
Pmt Adj Date
|
if
applicable
|
|||
|
Margin
|
if
applicable
|
|||
|
Floor
|
if
applicable
|
|||
|
Ceiling
|
if
applicable
|
|||
|
Max
Neg Am Percent
|
if
applicable
|
|||
|
Last
Change Effective Date
|
if
applicable
|
|||
|
Last
Change P&I Amount
|
if
applicable
|
|||
|
Last
Change Rate
|
if
applicable
|
|||
|
CSFB
Loan No
|
||||
|
Balloon
Term
|
||||
|
Days
DQ
|
Number
of days loan is delinquent
|
|||
|
Total
Late Charges
|
||||
|
Total
NSF Charges
|
||||
|
Corp
Adv Bal
|
Corporate
Advance Balances
|
|||
|
BPO
Value
|
Drive
by appraisal value
|
|||
|
BPO
Date
|
Drive
by appraisal date
|
|||
|
BK
Discharged
|
Date
of previous bankruptcy discharge
|
|||
|
Prev
BK Chap
|
Previous
bankruptcy chapter number
|
|||
|
Prev
BK Case No
|
Previous
bankruptcy case number
|
|||
|
ALT
LOAN NO
|
Originator's
loan# (if available)
|
|||
|
FICO
Score
|
if
available
|
|||
|
Prepay
Term
|
Term
in # of months over which any prepayment penalty applies; populate
0 or
NULL, if Prepay Indicator = 'N' (if available)
|
|||
|
Senior
Loan Amount
|
Aggregate
balance of all Sr. liens (if available)
|
|||
|
Senior
Lienholder
|
Name
of Sr. (1st) lienholder (if available)
|
|||
|
Junior
Loan Amount
|
Amount
of any known liens junior in position (if available)
|
|||
|
Junior
Lienholder
|
Name
of Jr. lienholder (if available)
|
|
|
EXHIBIT
I
FORM
10-D, FORM 8-K AND FORM 10-K REPORTING RESPONSIBILITY
As
to
each item described below, the entity indicated as the Responsible Party shall
be primarily responsible for reporting the information to the Indenture Trustee
pursuant to Section 6.16(a)(i), (ii) and (iii) of the Indenture. If the
Indenture Trustee is indicated below as to any item, then the Indenture Trustee
is primarily responsible for obtaining that information.
Under
Item 1 of Form 10-D: a) items marked “3.25 statement” are required to be
included in the monthly statement under Section 3.25, provided by the Indenture
Trustee based on information received from the Servicers to the extent required
of the Servicers under the Servicing Agreement; and b) items marked “Form 10-D
report” are required to be in the Form 10-D report but not the 3.25 statement,
provided by the party indicated. Information under all other Items of Form
10-D
is to be included in the Form 10-D report. Items indicated as “N/A” are not
applicable to the transaction.
For
purposes of this Exhibit, “Servicer” includes the Special Servicer.
|
Form
|
Item
|
Description
|
Responsible
Party
|
|
10-D
|
|||
|
1
|
Distribution
and Pool Performance Information
|
||
|
Item
1121(a) - Distribution and Pool Performance
Information
|
|||
|
(1)
Any applicable record dates, accrual dates, determination dates for
calculating distributions and actual distribution dates for the
distribution period.
|
3.25
statement
|
||
|
(2)
Cash flows received and the sources thereof for distributions, fees
and
expenses.
|
3.25
statement
|
||
|
(3)
Calculated amounts and distribution of the flow of funds for the
period
itemized by type and priority of payment, including:
|
3.25
statement
|
||
|
(i)
Fees or expenses accrued and paid, with an identification of the
general
purpose of such fees and the party receiving such fees or
expenses.
|
3.25
statement
|
||
|
(ii)
Payments accrued or paid with respect to enhancement or other support
identified in Item 1114 of Regulation AB (such as insurance premiums
or
other enhancement maintenance fees), with an identification of the
general
purpose of such payments and the party receiving such
payments.
|
3.25
statement
|
||
|
(iii)
Principal, interest and other distributions accrued and paid on the
asset-backed securities by type and by class or series and any principal
or interest shortfalls or carryovers.
|
3.25
statement
|
||
|
(iv)
The amount of excess cash flow or excess spread and the disposition
of
excess cash flow.
|
3.25
statement
|
||
|
(4)
Beginning and ending principal balances of the asset-backed
securities.
|
3.25
statement
|
||
|
(5)
Interest rates applicable to the pool assets and the asset-backed
securities, as applicable. Consider providing interest rate information
for pool assets in appropriate distributional groups or incremental
ranges.
|
3.25
statement
|
||
|
(6)
Beginning and ending balances of transaction accounts, such as reserve
accounts, and material account activity during the period.
|
3.25
statement
|
||
|
(7)
Any amounts drawn on any credit enhancement or other support identified
in
Item 1114 of Regulation AB, as applicable, and the amount of coverage
remaining under any such enhancement, if known and
applicable.
|
3.25
statement
|
||
|
(8)
Number and amount of pool assets at the beginning and ending of each
period, and updated pool composition information, such as weighted
average
coupon, weighted average life, weighted average remaining term, pool
factors and prepayment amounts.
|
3.25
statement
Updated
pool composition information fields to be as reasonably requested
by
Depositor in writing to each Servicer and the Indenture Trustee at
least
30 days prior to the related Servicer Data Remittance Date from time
to
time
|
||
|
(9)
Delinquency and loss information for the period.
In
addition, describe any material changes to the information specified
in
Item 1100(b)(5) of Regulation AB regarding the pool
assets.
|
3.25
statement.
Form
10-D report: Servicer/Depositor
|
||
|
(10)
Information on the amount, terms and general purpose of any advances
made
or reimbursed during the period, including the general use of funds
advanced and the general source of funds for
reimbursements.
|
3.25
statement
|
||
|
(11)
Any material modifications, extensions or waivers to pool asset terms,
fees, penalties or payments during the distribution period or that
have
cumulatively become material over time.
|
Form
10-D report: Depositor
|
||
|
(12)
Material breaches of pool asset representations or warranties or
transaction covenants.
|
Form
10-D report: Seller (subject to Depositor approval)
|
||
|
(13)
Information on ratio, coverage or other tests used for determining
any
early amortization, liquidation or other performance trigger and
whether
the trigger was met.
|
3.25
statement
|
||
|
(14)
Information regarding any new issuance of asset-backed securities
backed
by the same asset pool,
[information
regarding] any pool asset changes (other than in connection with
a pool
asset converting into cash in accordance with its terms), such as
additions or removals in connection with a prefunding or revolving
period
and pool asset substitutions and repurchases (and purchase rates,
if
applicable), and cash flows available for future purchases, such
as the
balances of any prefunding or revolving accounts, if
applicable.
Disclose
any material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or pool selection criteria or procedures,
as
applicable, used to originate, acquire or select the new pool
assets.
|
Form
10-D report: Depositor
Form
10-D report: Seller (subject to Depositor approval)
Form
10-D report: Seller (subject to Depositor approval)
|
||
|
Item
1121(b) - Pre-Funding or Revolving Period Information
Updated
pool information as required under Item 1121(b).
|
Seller
(subject to Depositor approval)
|
||
|
2
|
Legal
Proceedings
|
||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
Sponsor
(Seller)
Depositor
Indenture
Trustee
Issuing
entity
Servicer
or any Subservicer to which Servicer delegates servicing function
to that
is servicing 20% or more of pool assets at time of report
Originator
of 20% or more of pool assets as of the Cut-off Date
Custodian
|
Seller
Depositor
Indenture
Trustee
Depositor
Servicer
Depositor
Custodian
|
||
|
3
|
Sales
of Securities and Use of Proceeds
|
||
|
Information
from Item 2(a) of Part II of Form 10-Q:
With
respect to any sale of securities by the sponsor, depositor or issuing
entity, that are backed by the same asset pool or are otherwise issued
by
the issuing entity, whether or not registered, provide the sales
and use
of proceeds information in Item 701 of Regulation S-K. Pricing information
can be omitted if securities were not registered.
|
Depositor
|
||
|
4
|
Defaults
Upon Senior Securities
|
||
|
Information
from Item 3 of Part II of Form 10-Q:
Report
the occurrence of any Event of Default of which the Indenture Trustee
has
received written notice or has actual knowledge (after expiration
of any
grace period and provision of any required notice)
|
Indenture
Trustee
|
||
|
5
|
Submission
of Matters to a Vote of Security Holders
|
||
|
Information
from Item 4 of Part II of Form 10-Q
|
Indenture
Trustee
|
||
|
6
|
Significant
Obligors of Pool Assets
|
||
|
Item
1112(b) - Significant
Obligor Financial Information*
|
N/A
|
||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Item.
|
|||
|
7
|
Significant
Enhancement Provider Information
|
||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information*
Determining
applicable disclosure threshold
Obtaining
required financial information or effecting incorporation by
reference
|
Depositor
Depositor
|
||
|
Item
1115(b) - Derivative Counterparty Financial Information*
Determining
current maximum probable exposure
Determining
current significance percentage
Obtaining
required financial information or effecting incorporation by
reference
|
Depositor
Depositor
Depositor
|
||
|
*This
information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
Items.
|
|||
|
8
|
Other
Information
|
||
|
Disclose
any information required to be reported on Form 8-K during the period
covered by the Form 10-D but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
below
|
||
|
9
|
Exhibits
|
||
|
Distribution
report
|
Indenture
Trustee
|
||
|
Exhibits
required by Item 601 of Regulation S-K, such as material
agreements
|
Depositor
|
||
|
8-K
|
|||
|
1.01
|
Entry
into a Material Definitive Agreement
|
||
|
Disclosure
is required regarding entry into or amendment of any definitive agreement
that is material to the securitization, even if depositor is not
a party.
Examples:
servicing agreement, custodial agreement.
Note:
disclosure not required as to definitive agreements that are fully
disclosed in the prospectus
|
Any
of the following that is entering into a material definitive agreement:
Servicer, Indenture Trustee, Seller, Depositor
|
||
|
1.02
|
Termination
of a Material Definitive Agreement
|
||
|
Disclosure
is required regarding termination of any definitive agreement that
is
material to the securitization (other than expiration in accordance
with
its terms), even if depositor is not a party.
Examples:
servicing agreement, custodial agreement.
|
Any
of the following that is requesting termination of a material definitive
agreement: Servicer, Indenture Trustee, Seller,
Depositor
|
||
|
1.03
|
Bankruptcy
or Receivership
|
||
|
Disclosure
is required regarding the bankruptcy or receivership, if known to
the
Depositor, with respect to any of the following:
Sponsor
(Seller), Depositor, Master Servicer, affiliated Servicer, other
Servicer
servicing 20% or more of pool assets at time of report, other material
servicers, Indenture Trustee, significant obligor, credit enhancer
(10% or
more), derivatives counterparty, Custodian
|
Any
of the following that is in bankruptcy or receivership: Servicer,
Indenture Trustee, Seller, Depositor, Custodian
|
||
|
2.04
|
Triggering
Events that Accelerate or Increase a Direct Financial Obligation
or an
Obligation under an Off-Balance Sheet Arrangement
|
||
|
Includes
an early amortization, performance trigger or other event, including
event
of default, that would materially alter the payment priority/distribution
of cash flows/amortization schedule.
Disclosure
will be made of events other than waterfall triggers which are disclosed
in the 3.25 statement
|
Indenture
Trustee
|
||
|
3.03
|
Material
Modification to Rights of Security Holders
|
||
|
Disclosure
is required of any material modification to documents defining the
rights
of Certificateholders, including the Pooling and Servicing
Agreement
|
Indenture
Trustee (or Depositor, if the Indenture Trustee is not a party to
such
agreement or required to provide prior written consent to such
amendment)
|
||
|
5.03
|
Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
|
||
|
Disclosure
is required of any amendment “to the governing documents of the issuing
entity”
|
Depositor
|
||
|
5.06
|
Change
in Shell Company Status
|
||
|
[Not
applicable to ABS issuers]
|
N/A
|
||
|
6.01
|
ABS
Informational and Computational Material
|
Depositor
|
|
|
[Not
included in reports to be filed under Section 8.12]
|
|||
|
6.02
|
Change
of Servicer or Indenture Trustee
|
||
|
Requires
disclosure of any removal, replacement, substitution or addition
of any
master servicer, affiliated servicer, other servicer servicing 10%
or more
of pool assets at time of report, other material servicers, certificate
administrator or Indenture Trustee. Reg AB disclosure about any new
servicer or Indenture Trustee is also required.
|
Indenture
Trustee
|
||
|
6.03
|
Change
in Credit Enhancement or Other External Support
|
||
|
Covers
termination of any enhancement in manner other than by its terms,
the
addition of an enhancement, or a material change in the enhancement
provided. Applies to external credit enhancements as well as derivatives.
Reg AB disclosure about any new enhancement provider is also
required.
|
Indenture
Trustee
|
||
|
6.04
|
Failure
to Make a Required Distribution
|
Indenture
Trustee
|
|
|
6.05
|
Securities
Act Updating Disclosure
|
||
|
If
any material pool characteristic differs by 5% or more at the time
of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset
pool.
|
Depositor
|
||
|
If
there are any new servicers or originators required to be disclosed
under
Regulation AB as a result of the foregoing, provide the information
called
for in Items 1108 and 1110 respectively.
|
Depositor
|
||
|
7.01
|
Regulation
FD Disclosure
|
Depositor
|
|
|
8.01
|
Other
Events
|
||
|
Any
event, with respect to which information is not otherwise called
for in
Form 8-K, that the registrant deems of importance to security
holders.
|
Depositor
|
||
|
9.01
|
Financial
Statements and Exhibits
|
The
Responsible Party applicable to reportable event
|
|
|
10-K
|
|||
|
9B
|
Other
Information
|
||
|
Disclose
any information required to be reported on Form 8-K during the fourth
quarter covered by the Form 10-K but not reported
|
The
Responsible Party for the applicable Form 8-K item as indicated
above
|
||
|
15
|
Exhibits
and Financial Statement Schedules
|
||
|
Item
1112(b) - Significant
Obligor Financial Information
|
N/A
|
||
|
Item
1114(b)(2) - Credit Enhancement Provider Financial
Information
Determining
applicable disclosure threshold
Obtaining
required financial information or effecting incorporation by
reference
|
Depositor
Depositor
|
||
|
Item
1115(b) - Derivative Counterparty Financial Information
Determining
current maximum probable exposure
Determining
current significance percentage
Obtaining
required financial information or effecting incorporation by
reference
|
Depositor
Depositor
Depositor
|
||
|
Item
1117 - Legal proceedings pending against the following entities,
or their
respective property, that is material to Certificateholders, including
proceedings known to be contemplated by governmental
authorities:
Sponsor
(Seller)
Depositor
Indenture
Trustee
Issuing
entity
Servicer
or any other Subservicer to which Servicer delegates servicing function
to
that is servicing 20% or more of pool assets at time of
report
Originator
of 20% or more of pool assets as of the Cut-off Date
Custodian
|
Seller
Depositor
Indenture
Trustee
Depositor
Servicer
Depositor
Custodian
|
||
|
Item
1119 - Affiliations and relationships between the following entities,
or
their respective affiliates, that are material to
Certificateholders:
Sponsor
(Seller)
Depositor
Indenture
Trustee
Servicer
or any other Subservicer to which Servicer delegates servicing function
to
that is servicing 20% or more of pool assets at time of
report
Originator
Custodian
Counterparty
|
Seller
Depositor
Indenture
Trustee
Servicer
Depositor
Custodian
Depositor
|
||
|
Item
1122 - Assessment of Compliance with Servicing
Criteria
|
Indenture
Trustee, Servicer, Custodian
|
||
|
Item
1123 - Servicer Compliance Statement
|
Servicer
|
|
|
EXHIBIT
J
FORM
OF
SERVICING CERTIFICATE
The
following information will be provided by any Servicer to the Trustee in
accordance with Section 4.01 hereof:
|
FIELD
|
DESCRIPTION
|
|
LOAN
|
loan
number
|
|
STOP_ADV_FLAG
|
stop
advance flag (Y = Yes, blank or N = No)
|
|
RATE
|
interest
rate (entered as a %)
|
|
SF_RATE
|
servicing
fee rate (entered as a %)
|
|
LPMI_RATE**
|
lpmi
rate (entered as a %)
|
|
BEG_SCHED**
|
beg
scheduled balance
|
|
END_SCHED**
|
end
scheduled balance
|
|
END_ACT
|
end
actual balance
|
|
P&I
|
monthly
p&i
|
|
GROSS_INT
|
gross
scheduled interest
|
|
NEG_AM**
|
negative
amortization
|
|
SCHED_P**
|
scheduled
principal
|
|
CURTAIL
|
curtailments
|
|
PREPAY
|
prepayments
or liquidation principal
|
|
PREPAY_DATE
|
prepayment
or liquidation date
|
|
PREPAY_CODE
|
PIF=60,
repurchase = 65, liquidation = 2
|
|
NEXT_DUE
|
borrower's
next payment due
|
|
STATUS
|
Bankruptcy,
Foreclosure, REO
|
|
BKCY_DATE
|
date
the loan went into Bkcy
|
|
FCLS_DATE
|
date
the loan went into Fcls
|
|
REO_DATE**
|
date
the loan went into REO
|
|
DELINQ
|
0,1,30,60,90,120
( 1 = 1-29, 30 = 30-59, etc…)
|
|
PPIS**
|
prepayment
interest shortfall (negative is excess)
|
|
RAIS
|
relief
act interest shortfall
|
|
CURRLTV
|
current
loan to value ratio (entered as %)
|
|
BOOK_VALUE
|
latest
BPO or market value or other book value as defined in governing
doc
|
|
PPP_Collected
|
PPPs
collected from borrower
|
|
PPP_Waived
|
PPPs
waived by the servicer
|
|
PPP_Servicer**
|
PPPs
waived but paid by the servicer
|
|
NON_REC_ADV**
|
nonrecoverable
advances claimed (reimbursed) in the current period
|
|
REIN_STOP_GINT**
|
reinstated
stop advance gross interest
|
|
REIN_STOP_NINT**
|
reinstated
stop advance net interest
|
|
REMIT
|
total
remit for the loan
|
|
MAT_DATE
|
Maturity
Date
|
|
ADV_P&I_CUR**
|
current
period delinquent P&I advances made by servicer
|
|
ADV_P&I_OUT**
|
cumulative
outstanding delinquent P&I advances
|
|
ADV_SERV_MADE**
|
current
period servicer advances made by servicer (not including delinquent
P&I advances)
|
|
ADV_SERV_REIM**
|
current
period servicer advances reimbursed to servicer (not including delinquent
P&I advances)
|
|
ADV_SERV_DESC**
|
description
of current period servicer advances made/reimbursed by servicer (purpose,
terms)
|
|
MOD_EXT_WAIVE_FLAG
|
Y
if mod
|
|
MOD_EXT_WAIVE
|
description
of modification, extensions or waivers to asset terms, fees or
penalties
|
|
MTHROLL**
|
Month
until the next rate adjustment occurs (for ARMs only)
|
|
DNEXTRATE**
|
Next
Rate Adjustment Date
|
|
NEXT_RATE**
|
next
period's interest rate
|
|
LIQUIDATION_FLAG**
|
liquidation
flag (Y = Yes, blank or N = No)
|
|
GROSS_PROCEEDS
|
gross
sales proceeds
|
|
SERV_ADV
|
unpaid
servicing advances
|
|
DEL_ADV**
|
unpaid
delinquency advances
|
|
SERV_FEES_UNPAID
|
unpaid
servicing fees
|
|
LEGAL_FEES
|
unpaid
legal fees
|
|
NET_PROCEEDS
|
net
proceeds (gross_proceeds - serv_adv - del_adv - serv_fees_unpaid
-
legal_fees)
|
|
LOSS
|
loss
(beg_sched - net_proceeds)
|
|
LOSS_ADD
|
trailing
loss/ (gain)
|
|
LOSS_ADD_DATE
|
trailing
loss/ (gain) date
|
|
DRAWS
(only
PNC)
|
draws
taken by borrower
|
**
indicates not applicable to PNC
|
|
SCHEDULE
I
REPRESENTATIONS
AND WARRANTIES OF WILSHIRE
(i) Wilshire
is a corporation duly organized and validly existing under the laws of the
State
of Nevada and has full power and authority to own its assets and to transact
the
business in which it is currently engaged. Wilshire (including, where
appropriate, through its Affiliates and subsidiaries) is duly qualified to
do
business and is in good standing in each jurisdiction in which the character
of
the business transacted by it or properties owned or leased by it requires
such
qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or
otherwise) of Wilshire;
(ii) Wilshire
has full power and authority to make, execute, deliver and perform this
Servicing Agreement and all of the transactions contemplated under this
Servicing Agreement (including, where appropriate, through its subsidiaries),
and has taken all necessary corporate action to authorize the execution,
delivery and performance of this Servicing Agreement. When executed and
delivered, this Servicing Agreement will constitute the legal, valid and binding
obligation of Wilshire enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;
(iii) Wilshire
is not required to obtain the consent of any other Person or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Servicing Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
(iv) The
execution and delivery of this Servicing Agreement and the performance of the
transactions contemplated hereby by Wilshire will not violate any material
provision of any existing law or regulation or any order or decree of any court
applicable to Wilshire or any provision of the articles or bylaws of Wilshire,
or constitute a material breach of any mortgage, indenture, contract or other
agreement to which Wilshire is a party or by which Wilshire may be
bound;
(v) No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of Wilshire
threatened, against Wilshire or any of its properties or with respect to this
Servicing Agreement or the Securities which in the opinion of Wilshire has
a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Servicing Agreement; and
(vi) Wilshire
is a member of MERS in good standing, and will comply in all material respects
with the rules and procedures of MERS in connection with the servicing of the
Loans that are registered with MERS.
|
|
SCHEDULE
II
REPRESENTATIONS
AND WARRANTIES OF OCWEN
(vii) Ocwen
is
a limited liability company duly organized and validly existing under the laws
of the State of Delaware and has full power and authority to own its assets
and
to transact the business in which it is currently engaged. Ocwen (including,
where appropriate, through its Affiliates and subsidiaries) is duly qualified
to
do business and is in good standing in each jurisdiction in which the character
of the business transacted by it or properties owned or leased by it requires
such qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or
otherwise) of Ocwen;
(viii) Ocwen
has
full power and authority to make, execute, deliver and perform this Servicing
Agreement and all of the transactions contemplated under this Servicing
Agreement (including, where appropriate, through its subsidiaries), and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Servicing Agreement. When executed and delivered, this
Servicing Agreement will constitute the legal, valid and binding obligation
of
Ocwen enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies;
(ix) Ocwen
is
not required to obtain the consent of any other Person or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Servicing Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
(x) The
execution and delivery of this Servicing Agreement and the performance of the
transactions contemplated hereby by Ocwen will not violate any material
provision of any existing law or regulation or any order or decree of any court
applicable to Ocwen or any provision of the articles or bylaws of Ocwen, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which Ocwen is a party or by which Ocwen may be bound;
(xi) No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of Ocwen threatened,
against Ocwen or any of its properties or with respect to this Servicing
Agreement or the Securities which in the opinion of Ocwen has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Servicing Agreement; and
(xii) Ocwen
is
a member of MERS in good standing, and will comply in all material respects
with
the rules and procedures of MERS in connection with the servicing of the Loans
that are registered with MERS.
|
|
SCHEDULE
III
REPRESENTATIONS
AND WARRANTIES OF PNC
(xiii) PNC
is a
bank duly organized and validly existing under the laws of the State of
Pennsylvania and has full power and authority to own its assets and to transact
the business in which it is currently engaged. PNC (including, where
appropriate, through its Affiliates and subsidiaries) is duly qualified to
do
business and is in good standing in each jurisdiction in which the character
of
the business transacted by it or properties owned or leased by it requires
such
qualification and in which the failure to so qualify would have a material
adverse effect on the business, properties, assets, or condition (financial
or
otherwise) of PNC;
(xiv) PNC
has
full power and authority to make, execute, deliver and perform this Servicing
Agreement and all of the transactions contemplated under this Servicing
Agreement (including, where appropriate, through its subsidiaries), and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Servicing Agreement. When executed and delivered, this
Servicing Agreement will constitute the legal, valid and binding obligation
of
PNC enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies;
(xv) PNC
is
not required to obtain the consent of any other Person or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Servicing Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
(xvi) The
execution and delivery of this Servicing Agreement and the performance of the
transactions contemplated hereby by PNC will not violate any material provision
of any existing law or regulation or any order or decree of any court applicable
to PNC or any provision of the articles or bylaws of PNC, or constitute a
material breach of any material mortgage, indenture, contract or other agreement
to which PNC is a party or by which PNC may be bound;
(xvii) No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of PNC threatened,
against PNC or any of its properties which in the opinion of PNC has a
reasonable likelihood of resulting in a material adverse effect on the
transactions contemplated by this Servicing Agreement; and
(xviii) PNC
is a
member of MERS in good standing, and will comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the Loans
that are registered with MERS.
|
|
SCHEDULE
IV
REPRESENTATIONS
AND WARRANTIES OF SPS
(xix) SPS
is a
corporation duly organized and validly existing under the laws of the State
of
Utah and has full power and authority to own its assets and to transact the
business in which it is currently engaged. SPS (including, where appropriate,
through its Affiliates and subsidiaries) is duly qualified to do business and
is
in good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such qualification
and in which the failure to so qualify would have a material adverse effect
on
the business, properties, assets, or condition (financial or otherwise) of
SPS;
(xx) SPS
has
full power and authority to make, execute, deliver and perform this Servicing
Agreement and all of the transactions contemplated under this Servicing
Agreement (including, where appropriate, through its subsidiaries), and has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Servicing Agreement. When executed and delivered, this
Servicing Agreement will constitute the legal, valid and binding obligation
of
SPS enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the availability of equitable
remedies;
(xxi) SPS
is
not required to obtain the consent of any other Person or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Servicing Agreement,
except for such consent, license, approval or authorization, or registration
or
declaration, as shall have been obtained or filed, as the case may
be;
(xxii) The
execution and delivery of this Servicing Agreement and the performance of the
transactions contemplated hereby by SPS will not violate any material provision
of any existing law or regulation or any order or decree of any court applicable
to SPS or any provision of the articles or bylaws of SPS, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which
SPS is a party or by which SPS may be bound;
(xxiii) No
litigation or administrative proceeding of or before any court, tribunal or
governmental body is currently pending, or to the knowledge of SPS threatened,
against SPS or any of its properties or with respect to this Servicing Agreement
or the Securities which in the opinion of SPS has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this
Servicing Agreement; and
(xxiv) SPS
is a
member of MERS in good standing, and will comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the Loans
that are registered with MERS.
