Exhibit 99.6
EXECUTION COPY
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Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.,
Purchaser
and
Countrywide Home Loans, Inc.,
Company
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FLOW SELLER'S WARRANTIES AND SERVICING
AGREEMENT
Dated as of June 1, 2006
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Residential Fixed and Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 [Intentionally Omitted]................................... 12
Section 2.02 [Intentionally Omitted]................................... 12
Section 2.03 [Intentionally Omitted]................................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.................... 12
Section 3.02 [Intentionally Omitted]................................... 15
Section 3.03 [Intentionally Omitted]................................... 15
Section 3.04 Indemnification........................................... 15
Section 3.05 Restrictions and Requirements Applicable in the
Event that a Mortgage Loan is Acquired by a REMIC...... 15
Section 3.06 [Intentionally Omitted]................................... 16
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer................................ 16
Section 4.02 Liquidation of Mortgage Loans............................. 18
Section 4.03 Collection of Mortgage Loan Payments...................... 19
Section 4.04 Establishment of and Deposits to Custodial Account........ 19
Section 4.05 Permitted Withdrawals From Custodial Account.............. 21
Section 4.06 Establishment of and Deposits to Escrow Account........... 22
Section 4.07 Permitted Withdrawals From Escrow Account................. 23
Section 4.08 Payment of Taxes, Insurance and Other Charges............. 23
Section 4.09 Protection of Accounts.................................... 24
Section 4.10 Maintenance of Hazard Insurance........................... 24
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Section 4.11 Maintenance of Mortgage Impairment Insurance.............. 26
Section 4.12 Maintenance of Fidelity Bond and Errors and
Omissions Insurance.................................... 26
Section 4.13 Inspections............................................... 27
Section 4.14 Restoration of Mortgaged Property......................... 27
Section 4.15 Maintenance of LPMI Policy; Claims........................ 27
Section 4.16 Title, Management and Disposition of REO Property......... 28
Section 4.17 Real Estate Owned Reports................................. 29
Section 4.18 Liquidation Reports....................................... 30
Section 4.19 Reports of Foreclosures and Abandonments of
Mortgaged Property..................................... 30
Section 4.20 Credit Reporting.......................................... 30
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances............................................... 30
Section 5.02 Statements to Purchaser................................... 31
Section 5.03 Monthly Advances by Company............................... 31
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property........................... 32
Section 6.02 Satisfaction of Mortgages and Release of Mortgage
Files.................................................. 32
Section 6.03 Servicing Compensation.................................... 33
Section 6.04 Annual Statement as to Compliance......................... 33
Section 6.05 Annual Independent Public Accountants' Servicing
Report................................................. 33
Section 6.06 Right to Examine Company Records.......................... 34
Section 6.07 Appointment and Designation of Master Servicer............ 34
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, or a
Pass-Through Transfer on One or More
Reconstitution Dates................................... 34
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.................................. 36
Section 8.02 Financial Statements; Servicing Facility.................. 37
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ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims....................... 37
Section 9.02 Merger or Consolidation of the Company.................... 38
Section 9.03 Limitation on Liability of Company and Others............. 38
Section 9.04 Limitation on Resignation and Assignment by
Company................................................ 38
ARTICLE X
DEFAULT
Section 10.01 Events of Default......................................... 39
Section 10.02 Waiver of Defaults........................................ 41
ARTICLE XI
TERMINATION
Section 11.01 Termination............................................... 41
Section 11.02 Termination Without Cause................................. 41
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company...................................... 42
Section 12.02 Amendment................................................. 43
Section 12.03 Governing Law............................................. 43
Section 12.04 Duration of Agreement..................................... 43
Section 12.05 Notices................................................... 43
Section 12.06 Severability of Provisions................................ 43
Section 12.07 Relationship of Parties................................... 44
Section 12.08 Execution; Successors and Assigns......................... 44
Section 12.09 Recordation of Assignments of Mortgage.................... 44
Section 12.10 Assignment by Purchaser................................... 44
Section 12.11 No Personal Solicitation.................................. 44
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EXHIBITS
EXHIBIT A MORTGAGE LOAN SCHEDULE
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C MORTGAGE LOAN DOCUMENTS
EXHIBIT D-1 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT D-2 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT E-1 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT E-2 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT F FORM OF ACKNOWLEDGMENT AND CONVEYANCE
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This is a Flow Seller's Warranties and Servicing Agreement for
conventional residential first lien mortgage loans, dated and effective as of
June 1, 2006, and is executed between Xxxxxx Capital, A Division of Xxxxxx
Brothers Holdings Inc., as purchaser (the "Purchaser"), and Countrywide Home
Loans, Inc., as seller and servicer (the "Company").
WITNESSETH:
WHEREAS, from time to time, the Purchaser has agreed to purchase from
the Company and, from to time, the Company has agreed to sell to the Purchaser
certain Mortgage Loans (excluding the right to service the Mortgage Loans which
the Company expressly retains), which shall be delivered as a pool of whole
loans;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the management, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Acknowledgment and Conveyance Agreement: An Acknowledgment and
Conveyance Agreement in the form of Exhibit F hereto dated as of the related
Closing Date, by and between the Company and the Purchaser.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement, the Mortgage Interest Rate of which is adjusted from time to
time in accordance with the terms of the related Mortgage Note.
Agency Transfer: The sale or transfer by Purchaser of some or all of
the Mortgage Loans to Xxxxxx Xxx under its Cash Purchase Program or its MBS Swap
Program (Special Servicing Option) or to Xxxxxxx Mac under its Xxxxxxx Xxx Xxxx
Program or Gold PC Program, retaining the Company as "servicer thereunder".
Agreement: This Flow Seller's Warranties and Servicing Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Approved Flood Certification Provider: Any provider acceptable to
Xxxxxx Xxx or Xxxxxxx Mac.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the States of New
York, Texas, or California are authorized or obligated by law or executive order
to be closed.
Closing Date: The date or dates set forth on the related
Acknowledgment and Conveyance on which the Purchaser from time to time shall
purchase and the Company from time to time shall sell, the Mortgage Loans listed
on the related Mortgage Loan Schedule.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Combined Loan-to-Value Ratio or CLTV: With respect to any Mortgage
Loan, the sum of the original principal balance of such Mortgage Loan and the
outstanding principal balance of any related first lien as of the date of
origination of the Mortgage Loan, divided by the lower of (a) the Appraised
Value of the Mortgaged Property and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property.
Company: Countrywide Home Loans Inc., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
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Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: That certain Custodial Agreement, dated as of
September 1, 1999 by and between the Purchaser and U.S. Bank Trust National
Association, as amended.
Custodian: The Custodian under the Custodial Agreement, or its
successor in interest or assigns or any successor to the Custodian under the
Custodial Agreement as provided therein.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage Loan
Package, the date set forth on the related Mortgage Loan Schedule.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the
Company in accordance with the terms of this Agreement and which is, in the case
of a substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Determination Date: The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately following such 15th day) of the month
of the related Remittance Date.
Disqualified Organization: An organization defined as such in Section
860E(e) of the Code.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month of such Due Date.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending in the first day of the month of the Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution
or trust company incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, so long as at the
time of such investment or contractual commitment providing for such
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investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal subsidiary
of a holding company, the commercial paper or other short-term debt
obligations of such holding company) are rated "P-1" by Xxxxx'x Investors
Service, Inc. and the long-term debt obligations of such holding company)
are rated "P-1" by Xxxxx'x Investors Service, Inc. and the long-term debt
obligations of such depository institution or trust company (or, in the
case of a depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by Xxxxx'x Investors Service,
Inc.;
(iii) investments and securities otherwise acceptable to Xxxxxx Mae
and Xxxxxxx Mac.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, if applicable, and any other payments required to
be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Mae: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FICO Score: A statistical credit score obtained by mortgage lenders in
connection with the loan application to help assess a borrower's credit
worthiness.
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Fidelity Bond: A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which amount is
added to the Index in accordance with the terms of the related Mortgage Note to
determine on each Interest Rate Adjustment Date the Mortgage Interest Rate for
such Mortgage Loan.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that requires payments of
interest only during its term and the entire original principal balance at
maturity, and that does not amortize during its term.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date as specified in the related Mortgage Note with respect
to the initial Interest Rate Adjustment Date, or the related Mortgage Loan
Schedule, with respect to subsequent Interest Rate Adjustment Dates.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the Stated Principal Balance of the Mortgage Loan as of the related
Cut-off Date (unless otherwise indicated) to the lesser of (a) the Appraised
Value of the Mortgaged Property and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
LPMI Loan: A Mortgage Loan with a LPMI Policy.
LPMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer pursuant to which the related premium is to be paid by the
Company of the related Mortgage Loan from payments of interest made by the
Mortgagor.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth on the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such
period prior to the required cancellation of the LPMI Policy, shall be used to
pay the premium due on the related LPMI Policy.
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MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Monthly Advance: The portion of Monthly Payment delinquent with
respect to each Mortgage Loan at the close of business on the Determination Date
required to be advanced by the Company pursuant to Section 5.03 on the Business
Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents listed in Exhibit B hereto.
Mortgage Loan Package: A pool of Mortgage Loans sold to the Purchaser
by the Company on a Closing Date and set forth on the Mortgage Loan Schedule
annexed to the related Acknowledgment and Conveyance Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus (i) the Servicing Fee Rate and (ii) with respect to
LPMI Loans, the LPMI Fee.
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Mortgage Loan Schedule: With respect to each Mortgage Loan Package, a
schedule of Mortgage Loans annexed to the Acknowledgment and Conveyance, each
such schedule setting forth the information delineated in Exhibit A, with
respect to each Mortgage Loan. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by (a) an assistant Vice
President or higher ranking officer and (b) by the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Company, reasonably acceptable to the Purchaser, provided that
any Opinion of Counsel relating to (a) qualification of the Mortgage Loans in a
REMIC or (b) compliance with the REMIC Provisions, must be an opinion of counsel
who (i) is in fact independent of the Company and any master servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Company or any master servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Company or any master
servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly-issued and/or
privately placed, rated or unrated, mortgage pass-through transaction, retaining
the Company as "servicer" (with or without a master servicer) thereunder.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan,
the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI: PMI Mortgage Insurance Co., or any successor thereto.
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Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during any
Due Period, which Principal Prepayment was applied to such Mortgage Loan prior
to such Mortgage Loan's Due Date in such Due Period, the amount of interest (net
the related Servicing Fee) that would have accrued on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in the "Money Rates" section of The Wall
Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, excluding
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: The second day of the month preceding the
month in which the related Remittance Date occurs through the first day of the
month in which the related Remittance Date occurs.
Purchase Price and Terms Letter: With respect to each purchase of a
Mortgage Loan Package hereunder, that certain letter agreement setting forth the
general terms and conditions of such transaction consummated herein and
identifying the Mortgage Loans to be purchased hereunder, by and between the
Company and the Purchaser.
Purchaser: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
or its successor in interest or any successor to the Purchaser under this
Agreement as herein provided.
Qualified Depository: A depository the accounts of which are insured
by the FDIC through the BIF or the SAIF and the debt obligations of which are
rated AA or better by Standard & Poor's Corporation.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less
than and not more than 2% greater than the Mortgage Loan Remittance Rate of the
Deleted Mortgage Loan; (iii) have a remaining term to maturity not greater than
and not more than one year less than that of the Deleted Mortgage Loan; (iv)
have a Gross Margin not less than that of the Deleted Mortgage Loan; (v) have a
Lifetime Rate Cap not less than that of the Deleted Mortgage Loan; (vi) have a
Periodic Rate Cap not less than that of the Deleted Mortgage Loan; (vii)
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comply with each representation and warranty set forth in Sections 3.01 and
3.02; and (viii) be a REMIC Eligible Mortgage Loan.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's or their
respective successors.
Reconstitution: A Pass-Through Transfer, a Whole Loan Transfer or an
Agency Transfer.
Reconstitution Agreements: The agreement or agreements entered into by
the Purchaser, the Company, Xxxxxx Mae or Xxxxxxx Mac or certain third parties
on the Reconstitution Date(s) with respect to any or all of the Mortgage Loans
serviced hereunder, in connection with a Pass-Through Transfer or an Agency
Transfer as set forth in Section 7.01, including, but not limited to, (i) a
Xxxxxx Mae Mortgage Selling and Servicing Contract, a Pool Purchase Contract,
and any and all servicing agreements and tri-party agreements reasonably
required by Xxxxxx Xxx with respect to a Xxxxxx Mae Transfer, (ii) a Purchase
Contract and all purchase documents associated therewith as set forth in the
Xxxxxxx Xxx Xxxxxxx' & Servicers' Guide, and any and all servicing agreements
and tri-party agreements reasonably required by Xxxxxxx Mac with respect to a
Xxxxxxx Mac Transfer, and (iii) a Pooling and Servicing Agreement and/or a
subservicing/master servicing agreement and related custodial/trust agreement
and related documents with respect to a Pass-Through Transfer. Such agreement or
agreements shall prescribe the rights and obligations of the Company in
servicing the related Mortgage Loans and shall provide for servicing
compensation to the Company (calculated on a weighted average basis for all the
related Mortgage Loans as of the Reconstitution Date), net of any guarantee fees
due Xxxxxx Xxx or Xxxxxxx Mac, if applicable, at least equal to the Servicing
Fee due the Company in accordance with this Agreement. The form of relevant
Reconstitution Agreement to be entered into by the Purchaser and/or master
servicer or trustee and the Company with respect to Pass-Through Transfers shall
be reasonably satisfactory in form and substance to the Purchaser and the
Company (giving due regard to any rating or master servicing requirements),
shall not materially increase the Company's obligations or materially diminish
the Company's rights under this Agreement, and the representations and
warranties and servicing provisions contained therein shall be substantially
similar to those contained in this Agreement as of the related Closing Date,
unless otherwise mutually agreed by the parties.
Reconstitution Date: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of an Agency Transfer or a Pass-Through
Transfer pursuant to Section 7.01 hereof. On such date or dates, the Mortgage
Loans transferred shall cease to be covered by this Agreement and the Company's
servicing responsibilities shall cease under this Agreement (but not its
obligations as Company and originator for representations made as of the related
Closing Date hereunder or its servicing obligations prior to the Reconstitution
Date) with respect to the related transferred Mortgage Loans.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act of 1933 Release No. 33-8518, 70 Fed. Reg. 1,506,
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1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided
by the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Documents: The document or documents creating and governing the
administration of a REMIC.
REMIC Eligible Mortgage Loan: A Mortgage Loan held by a REMIC which
satisfies and/or complies with all applicable REMIC Provisions.
REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 86OG of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf
of the Purchasers through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the date on
which interest has last been paid and distributed to the Purchaser to the date
of repurchase, less amounts received or advanced in respect of such repurchased
Mortgage Loan which are being held in the Custodial Account for distribution in
the month of repurchase plus (iii) any costs and damages incurred by the
Purchaser or trust with respect to any securitization of the Mortgage Loan in
connection with any violation by such Mortgage Loan of any predatory- or
abusive-lending law plus (iv) all reasonable costs and expenses incurred by the
Purchaser in the enforcement of the Company's repurchase obligation hereunder.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the
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management and liquidation of any REO Property, (d) in connection with the
liquidation of a Mortgage Loan, any expenditures relating to the purchase or
maintenance of any Superior Lien pursuant to Section 4.21 hereof, and (e)
compliance with the obligations under Section 4.08.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: With respect to each Mortgage Loan and each
Mortgage Loan Package, the Servicing Fee Rate set forth in the related Purchase
Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Company consisting of originals of all documents in the Mortgage File
which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in Exhibit B the originals of which are delivered to the
Custodian pursuant to Section 2.01.
Servicing LP: Countrywide Home Loans Servicing LP, or any successor
thereto
Servicing Officer: Any officer of the Company involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not received, minus
(ii) all amounts previously distributed to the Purchaser with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Subservicer: Any Subservicer which is subservicing the Mortgage Loans
pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 4.01.
Subservicing Agreement: An agreement between the Company and a
Subservicer for the servicing of the Mortgage Loans.
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss
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Allocation, or any successor forms, to be filed on behalf of any REMIC under the
REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the certificate holders under a
REMIC or filed with the Internal Revenue Service or any other governmental
taxing authority under any applicable provisions of federal, state or local tax
laws.
Underwriting Guidelines: The underwriting guidelines of the Company
applicable to a Mortgage Loan Package, provided to the Purchaser in advance of
the related Closing Date.
Whole Loan Transfer: The sale or transfer of some or all of the
Mortgage Loans to a third party purchaser in a whole loan transaction pursuant
to a seller's warranties and servicing agreement or a participation and
servicing agreement, retaining the Company as "servicer" thereunder.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; DELIVERY OF DOCUMENTS
Section 2.01 [Intentionally Omitted]
Section 2.02 [Intentionally Omitted]
Section 2.03 [Intentionally Omitted]
ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company represents and warrants to the Purchaser that as of each
Closing Date:
(a) Due Organization and Authority. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state where a
Mortgaged Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the Company,
and in any event the Company is in compliance with the laws of any such state to
the extent necessary to ensure the enforceability of the related Mortgage Loan
and the servicing of such Mortgage Loan in accordance with the terms of this
Agreement; the Company has the full corporate power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Company and the
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consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Company; and all requisite corporate action has been taken by
the Company to make this Agreement valid and binding upon the Company in
accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Company, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Company pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans by the Company, the sale of the
Mortgage Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Company's charter or by-laws or any legal restriction or any
agreement or instrument to which the Company is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its property is subject, or impair
the ability of the Purchaser to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Ability to Service. The Company is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Company
is in good standing to sell mortgage loans to and service mortgage loans for
Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred, including but not limited
to a change in insurance coverage, which would make the Company unable to comply
with Xxxxxx Mae or Xxxxxxx Mac eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee. The Company acknowledges and agrees that
the Servicing Fee, as calculated at the Servicing Fee Rate, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax purposes,
as compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement.
(f) Ability to Perform. The Company does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Company is solvent and the sale of the Mortgage
Loans is not undertaken to hinder, delay or defraud any of the Company's
creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or to the best of the Company's knowledge threatened
against the Company which, either in any one instance or in the aggregate, may
result in any material adverse change in the business, operations, financial
condition, prospects, properties or assets of the Company, or in any material
impairment of the right or ability of the Company to carry on its business
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substantially as now conducted, or in any material liability on the part of the
Company, or which would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with the
obligations of the Company contemplated herein, or which would be likely to
impair materially the ability of the Company to perform under the terms of this
Agreement;
(h) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company with
this Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among the
one- to four-family mortgage loans in the Company's portfolio at the related
Closing Date as to which the representations and warranties set forth in Section
3.02 could be made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(j) Pool Characteristics. The Mortgage Loans in the related Mortgage
Loan Package have the characteristics as set forth on Annex 2 to the related
Acknowledgment and Conveyance.
(k) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(l) Sale Treatment. The Company has determined that the disposition of
the Mortgage Loans pursuant to this Agreement will be afforded sale treatment
for accounting and tax purposes;
(m) Financial Statements. There has been no change in the business,
operations, financial condition, properties or assets of the Company since the
date of the Company's most recent financial statements that would have a
material adverse effect on its ability to perform its obligations under this
Agreement;
(n) No Brokers' Fees. The Company has not dealt with any broker,
investment banker, agent or other person that may be entitled to any commission
or compensation in connection with the sale of the Mortgage Loans;
(o) Origination. The Company's decision to originate any mortgage loan
or to deny any mortgage loan application is an independent decision based upon
Company's Underwriting Guidelines, and is in no way made as a result of
Purchaser's decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated; and
(p) MERS. The Company 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
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servicing of the MERS Mortgage Loans for as long as such Mortgage Loans are
registered with MERS.
Section 3.02 [Intentionally Omitted]
Section 3.03 [Intentionally Omitted]
Section 3.04 Indemnification.
The Company agrees to indemnify the Purchaser and hold it harmless
from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser may sustain in any way related any assertion
based on, grounded upon resulting from a Breach of any of the Company's
representations and warranties contained herein. The provisions of this Section
3.04 shall survive termination of this Agreement.
It is understood and agreed that the obligations of the Company set
forth in Sections 3.03 and 3.04 to cure, substitute for or repurchase a
defective Mortgage Loan and to indemnify the Purchaser constitute the sole
remedies of the Purchaser respecting a Breach of the foregoing representations
and warranties.
Section 3.05 Restrictions and Requirements Applicable in the Event
that a Mortgage Loan is Acquired by a REMIC.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, the following
provisions shall be applicable to such Mortgage Loan:
(A) Repurchase of Mortgage Loans.
With respect to any Mortgage Loan that is not in default or as to
which no default is imminent, no repurchase or substitution pursuant to
Subsection 3.03, shall be made, unless, if so required by the applicable REMIC
Documents, the Company has obtained an Opinion of Counsel to the effect that
such repurchase will not (i) result in the imposition of taxes on "prohibited
transactions" of such REMIC (as defined in Section 860F of the Code) or
otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify
as a REMIC at any time.
(B) General Servicing Obligations.
The Company shall sell any REO Property within two years after its
acquisition by the REMIC unless (i) the Company applies for an extension of such
two-year period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Company obtains for the
Purchaser an Opinion of Counsel, addressed to the Purchaser and the Company, to
the effect that the holding by the REMIC of such REO Property subsequent to such
two year period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause the REMIC to fail
to qualify as a REMIC under the REMIC Provisions or comparable provisions of
relevant state laws at any time. The Company
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shall manage, conserve, protect and operate each REO Property for the Purchaser
solely for the purpose of its prompt disposition and sale in a manner which does
not cause such REO Property to fail to qualify as "foreclosure property" within
the meaning of Section 860G(a)(8) or result in the receipt by the REMIC of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code or any "net income from foreclosure property" which is subject to
taxation under Section 860G(a)(1) of the Code. Pursuant to its efforts to sell
such REO Property, the Company shall either itself or through an agent selected
by the Company protect and conserve such REO Property in the same manner and to
such extent as is customary in the locality where such REO Property is located
and may, incident to its conservation and protection of the interests of the
Purchaser, rent the same, or any part thereof, as the Company deems to be in the
best interest of the Company and the Purchaser for the period prior to the sale
of such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
(C) Additional Covenants.
In addition to the provision set forth in this Section 3.05, if a
REMIC election is made with respect to the arrangement under which any of the
Mortgage Loans or REO Properties are held, then, with respect to such Mortgage
Loans and/or REO Properties, and notwithstanding the terms of this Agreement,
the Company shall not take any action, cause the REMIC to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on "prohibited transactions" as
defined in Section 860F(a)(2) of the Code and the tax on "contributions" to a
REMIC set forth in Section 860G(d) of the Code) unless the Company has received
an Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
Section 3.06 [Intentionally Omitted].
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company shall service and administer the Mortgage Loans from the
related Closing Date and shall have full power and authority, acting alone, to
do any and all things in connection with such servicing and administration which
the Company may deem necessary or desirable, consistent with the terms of this
Agreement and with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Company may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that the Company shall not make any
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future advances with respect to a Mortgage Loan and (unless the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Company, imminent and the Company has obtained the prior written consent of
the Purchaser) the Company shall not permit any modification of any material
term of any Mortgage Loan including any modifications that would change the
Mortgage Interest Rate, defer or forgive the payment of principal or interest,
reduce or increase the outstanding principal balance (except for actual payments
of principal) or change the final maturity date on such Mortgage Loan. In the
event of any such modification which permits the deferral of interest or
principal payments on any Mortgage Loan, the Company shall, on the Business Day
immediately preceding the Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 5.03, the difference
between (a) such month's principal and one month's interest at the Mortgage Loan
Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b)
the amount paid by the Mortgagor. The Company shall be entitled to reimbursement
for such advances to the same extent as for all other advances made pursuant to
Section 5.03. Without limiting the generality of the foregoing, the Company
shall continue, and is hereby authorized and empowered, to execute and deliver
on behalf of itself and the Purchaser, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. If reasonably required by the Company, the Purchaser shall
furnish the Company with any powers of attorney and other documents necessary or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
The Mortgage Loans may be subserviced by the Subservicer on behalf of
the Company provided that the Subservicer is a Xxxxxx Xxx-approved lender or a
Xxxxxxx Mac seller/servicer in good standing, and no event has occurred,
including but not limited to a change in insurance coverage, which would make it
unable to comply with the eligibility requirements for lenders imposed by Xxxxxx
Xxx or for seller/servicers imposed by Xxxxxxx Mac, or which would require
notification to Xxxxxx Xxx or Xxxxxxx Mac. The Company may perform any of its
servicing responsibilities hereunder or may cause the Subservicer to perform any
such servicing responsibilities on its behalf, but the use by the Company of the
Subservicer shall not release the Company from any of its obligations hereunder
and the Company shall remain responsible hereunder for all acts and omissions of
the Subservicer as fully as if such acts and omissions were those of the
Company. The Company shall pay all fees and expenses of the Subservicer from its
own funds, and the Subservicer's fee shall not exceed the Servicing Fee.
At the cost and expense of the Company, without any right of
reimbursement from the Custodial Account, the Company shall be entitled to
terminate the rights and responsibilities of the Subservicer and arrange for any
servicing responsibilities to be performed by a successor Subservicer meeting
the requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Company, at
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the Company's option, from electing to service the related Mortgage Loans
itself. In the event that the Company's responsibilities and duties under this
Agreement are terminated pursuant to Section 9.04, 10.01 or 11.02, and if
requested to do so by the Purchaser, the Company shall at its own cost and
expense terminate the rights and responsibilities of the Subservicer as soon as
is reasonably possible. The Company shall pay all fees, expenses or penalties
necessary in order to terminate the rights and responsibilities of the
Subservicer from the Company's own funds without reimbursement from the
Purchaser.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Company and the Subservicer or any
reference herein to actions taken through the Subservicer or otherwise, the
Company shall not be relieved of its obligations to the Purchaser and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Company shall be
entitled to enter into an agreement with the Subservicer for indemnification of
the Company by the Subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any Subservicing Agreement and any other transactions or services
relating to the Mortgage Loans involving the Subservicer shall be deemed to be
between the Subservicer and Company alone, and the Purchaser shall have no
rights, obligations, duties or liabilities with respect to the Subservicer
including no obligation, duty or liability of Purchaser to pay the Subservicer's
fees and expenses. For purposes of distributions and advances by the Company
pursuant to this Agreement, the Company shall be deemed to have received a
payment on a Mortgage Loan when the Subservicer has received such payment.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related LPMI Policy, if
applicable. In the event that any payment due under any Mortgage Loan is not
postponed pursuant to Section 4.01 and remains delinquent for a period of 90
days or any other default continues for a period of 90 days beyond the
expiration of any grace or cure period, the Company shall commence foreclosure
proceedings, provided that, prior to commencing foreclosure proceedings, the
Company shall notify the Purchaser or its designee in writing of the Company's
intention to do so. In such connection, the Company shall from its own funds
make all necessary and proper Servicing Advances, provided, however, that the
Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Purchaser after reimbursement to itself for such expenses and (b) that
such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall
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have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Company has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Purchaser
or its designee otherwise requests an environmental inspection or review of such
Mortgaged Property to be conducted by a qualified inspector. Upon completion of
the inspection, the Company shall promptly provide the Purchaser or its designee
with a written report of the environmental inspection.
After reviewing the environmental inspection report, the Purchaser or
its designee shall determine how the Company shall proceed with respect to the
Mortgaged Property. In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Purchaser or its designee directs the Company
to proceed with foreclosure or acceptance of a deed in lieu of foreclosure, the
Company shall be reimbursed for all reasonable costs associated with such
foreclosure or acceptance of a deed in lieu of foreclosure and any related
environmental clean up costs, as applicable, from the related Liquidation
Proceeds, or if the Liquidation Proceeds are insufficient to fully reimburse the
Company, the Company shall be entitled to be reimbursed from amounts in the
Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser or
its designee directs the Company not to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Company shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from the
Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Countrywide Home Loans
Inc. in trust for the Purchaser of Conventional Residential Conventional
Residential Mortgage Loans, and various Mortgagors". The Custodial Account shall
be established with a Qualified Depository. Any funds deposited in the Custodial
Account shall at all times be fully insured to the full extent permitted under
applicable law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.05. The creation of any Custodial Account
shall be evidenced by a certification in the form of Exhibit D-1 hereto, in the
case of an account established with the Company, or by a
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letter agreement in the form of Exhibit D-2 hereto, in the case of an account
held by a depository other than the Company. A copy of such certification or
letter agreement shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
The Company shall deposit in the Custodial Account within two Business
Days of receipt, and retain therein, the following collections received by the
Company and payments made by the Company after the related Cut-off Date, (other
than payments of principal and interest due on or before the related Cut-off
Date, or received by the Company prior to the related Cut-off Date but allocable
to a period subsequent thereto or with respect to each LPMI Loan, in the amount
of the LPMI Fee):
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10, Section 4.11, Section 4.14 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 4.09, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts required to be
deposited by the Company in connection with a shortfall in principal amount
of any Qualified Substitute Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment in full or in part,
the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Company's own funds,
without reimbursement therefore, which, in the aggregate, for any month,
shall not exceed one twelfth of 0.50% of the outstanding principal balance
of the Mortgage Loans;
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any blanket hazard
insurance policy; and
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 4.16.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing,
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payments in the nature of late payment charges, prepayment penalties, assumption
fees, and other ancillary fees need not be deposited by the Company into the
Custodial Account. Any interest paid on funds deposited in the Custodial Account
by the depository institution shall accrue to the benefit of the Company and the
Company shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's funds
made pursuant to Section 5.03, the Company's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the
related Mortgage Loan which represent late payments of principal and/or
interest respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Company's right thereto
shall be prior to the rights of Purchaser, except that, where the Company
is required to repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02,
the Company's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for
any unpaid Servicing Fees, the Company's right to reimburse itself pursuant
to this subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and
such other amounts as may be collected by the Company from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in the
case of any such reimbursement, the Company's right thereto shall be prior
to the rights of Purchaser except where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02, in which case
the Company's right to such reimbursement shall be subsequent to the
payment to the Purchasers of the Repurchase Price pursuant to such sections
and all other amounts required to be paid to the Purchasers with respect to
such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial
Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 9.01;
(vi) to pay LPMI Fees in accordance with Section 4.15 hereof;
(vii) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that in the case of any
such expenditure or withdrawal related to a particular REO Property, the
amount of such expenditure or
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withdrawal from the Custodial Account shall be limited to amounts on
deposit in the Custodial Account with respect to the related REO Property;
(viii) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(ix) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Countrywide Home Loans Inc., in trust for the Purchaser of Conventional
Residential Mortgage Loans, and various Mortgagors". The Escrow Accounts shall
be established with a Qualified Depository, in a manner which shall provide
maximum available insurance thereunder. Funds deposited in the Escrow Account
may be drawn on by the Company in accordance with Section 4.07. The creation of
any Escrow Account shall be evidenced by a certification in the form of Exhibit
E-1 hereto, in the case of an account established with the Company, or by a
letter agreement in the form of Exhibit E-2 hereto, in the case of an account
held by a depository other than the Company. A copy of such certification shall
be furnished to the Purchaser and, upon request, to any subsequent Purchaser.
The Company shall deposit in the Escrow Account or Accounts within two
Business Days of receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Company shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
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Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Company only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments for
the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only from amounts received on the related Mortgage Loan which represent
late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination of
this Agreement; and
(viii) to withdraw funds deposited in error.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and other charges which are or
may become a lien upon the Mortgaged Property and the status of LPMI Policy
premiums and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges (including renewal premiums) and
shall effect payment thereof prior to the applicable penalty or termination
date, employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Company in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage. To the
extent that a Mortgage does not provide for Escrow Payments, the Company shall
determine that any such payments are made by the Mortgagor at the time they
first become due. The Company assumes full responsibility for the timely payment
of all such bills and shall effect timely payment of all such charges
irrespective of each Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments, and the Company shall make advances from its
own funds to effect such payments.
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Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. Upon any such transfer,
the Company shall promptly notify the Purchaser and deliver to the Purchaser a
Custodial Account Certification or Escrow Account Certification (as applicable)
in the form of Exhibit D-1 or E-1 to this Agreement.
The Company shall bear any expenses, losses or damages sustained by
the Purchaser because the Custodial Account and/or the Escrow Account are not
demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Company be invested in Eligible Investments; provided that
in the event that amounts on deposit in the Custodial Account or the Escrow
Account exceed the amount fully insured by the FDIC (the "Insured Amount") the
Company shall be obligated to invest the excess amount over the Insured Amount
in Eligible Investments on the same Business Day as such excess amount becomes
present in the Custodial Account or the Escrow Account. Any such Eligible
Investment shall mature no later than the Determination Date next following the
date of such Eligible Investment, provided, however, that if such Eligible
Investment is an obligation of a Qualified Depository (other than the Company)
that maintains the Custodial Account or the Escrow Account, then such Eligible
Investment may mature on such Remittance Date. Any such Eligible Investment
shall be made in the name of the Company in trust for the benefit of the
Purchaser. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Company and may be withdrawn at any time by the
Company. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Company out of
its own funds immediately as realized.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by a
generally acceptable insurer rated A:VI or better in the current Best's Key
Rating Guide ("Best's") against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property is
located, in an amount which is at least equal to the lesser of (i) the
replacement value of the improvements securing such Mortgage Loan and (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier rated A:VI or better
in Best's in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a
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replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Company determines in accordance with applicable law that a
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance or is covered in an amount less than the amount required by
the Flood Disaster Protection Act of 1973, as amended, the Company shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Company shall
immediately force place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Company shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current Xxxxxx Xxx requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
The Company shall cause to be maintained on each Mortgaged Property
earthquake or such other or additional insurance as may be required pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance, or pursuant to the requirements of any
private mortgage guaranty insurer, or as may be required to conform with
Accepted Servicing Practices.
In the event that any Purchaser or the Company shall determine that
the Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Company shall communicate and consult
with the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.
All policies required hereunder shall name the Company as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice
in selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are rated A:VI or better in Best's and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property address. The Company shall furnish to the Mortgagor a formal notice
of expiration of any such insurance in sufficient time for the Mortgagor to
arrange for renewal coverage by the expiration date.
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Pursuant to Section 4.04, any amounts collected by the Company under
any such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to
Section 4.05. Section 4.11 Maintenance of Mortgage Impairment
Insurance.
In the event that the Company shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section
4.10 and otherwise complies with all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth in
Section 4.10. Any amounts collected by the Company under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to deposited from the Company's funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Company shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and
Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Company against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 4.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be acceptable to Xxxxxx Mae or Xxxxxxx Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certified true copy of such fidelity bond and insurance policy.
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Section 4.13 Inspections.
The Company shall inspect the Mortgaged Property as often as deemed
necessary by the Company to assure itself that the value of the Mortgaged
Property is being preserved. In addition, if any Mortgage Loan is more than 60
days delinquent, the Company immediately shall inspect the Mortgaged Property
and shall conduct subsequent inspections in accordance with Accepted Servicing
Practices or as may be required by the primary mortgage guaranty insurer. The
Company shall keep a written report of each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. At a minimum, the Company
shall comply with the following conditions in connection with any such release
of Insurance Proceeds or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to
requiring waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Custodial Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of LPMI Policy; Claims.
With respect to LPMI Loans, maintain in full force and effect an LPMI
Policy, and from time to time, withdraw the LPMI Fee with respect to such LPMI
Loan from the Custodial Account in order to pay the premium thereon on a timely
basis. In the event that the interest payments made with respect to any LPMI
Loan are less than the LPMI Fee, the Company shall advance from its own funds
the amount of any such shortfall in the LPMI Fee, in payment of the premium on
the related LPMI Policy. Any such advance shall be a Servicing Advance subject
to reimbursement pursuant to the provisions on Section 4.05. In the event that
such LPMI Policy shall be terminated, the Company shall obtain from another
Qualified Insurer a comparable replacement policy, with a total coverage equal
to the remaining coverage of such terminated LPMI Policy, at substantially the
same fee level. If the insurer shall cease to be a Qualified Insurer, the
Company shall determine whether recoveries under the LPMI Policy are jeopardized
for reasons related to the financial condition of such insurer, it being
understood that the Company shall in no event have any responsibility or
liability for any failure to recover under
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the LPMI Policy for such reason. If the Company determines that recoveries are
so jeopardized, it shall notify the Purchaser and the Mortgagor, if required,
and obtain from another Qualified Insurer a replacement insurance policy. The
Company shall not take any action which would result in noncoverage under any
applicable LPMI Policy of any loss which, but for the actions of the Company
would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Company shall promptly notify the insurer under the related LPMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such LPMI Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
such LPMI Policy. If such LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Company shall obtain a replacement
LPMI Policy as provided above.
(b) In connection with its activities as servicer, the Company agrees
to prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any LPMI Policy in a timely fashion in accordance with the terms
of such LPMI Policy and, in this regard, to take such action as shall be
necessary to permit recovery under any LPMI Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Company
under any LPMI Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.
(c) Purchaser, in its sole discretion, at any time, may (i) either
obtain an additional LPMI Policy on any Mortgage Loan which already has a LPMI
Policy in place, or (ii) obtain a LPMI Policy for any Mortgage Loan which does
not already have a LPMI Policy in place. In any event, the Company agrees to
administer such LPMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or its designee, or in the event the
Purchaser is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an Opinion of Counsel obtained by the Company from any
attorney duly licensed to practice law in the state where the REO Property is
located. The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser or its designee.
The Company shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the purpose of its prompt disposition and
sale. The Company, either itself or through an agent selected by the Company,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Company shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided
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below) on such terms and conditions as the Company deems to be in the best
interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within one
year after title has been taken to such REO Property, unless (i) (A) a REMIC
election has not been made with respect to the arrangement under which the
Mortgage Loans and the REO Property are held, and (ii) the Company determines,
and gives an appropriate notice to the Purchaser to such effect, that a longer
period is necessary for the orderly liquidation of such REO Property. If a
period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property the Company shall report monthly to the
Purchaser as to the progress being made in selling such REO Property.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter the expenses of such sale shall be paid and the Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03, and on
the Remittance Date immediately following the Principal Prepayment Period in
which such sale proceeds are received the net cash proceeds of such sale
remaining in the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw the Custodial Account funds necessary for
the proper operation, management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any managing agent of the Company, a Subservicer, or the Company itself.
The REO management fee shall be an amount that is reasonable and customary in
the area where the Mortgaged Property is located. The Company shall make monthly
distributions on each Remittance Date to the Purchasers of the net cash flow
from the REO Property (which shall equal the revenues from such REO Property net
of the expenses described in the Section 4.16 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information as the Purchaser shall reasonably request.
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Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Company shall report to the Purchaser such foreclosure or
abandonment as required pursuant to Section 6050J of the Code.
Section 4.20 Credit Reporting
For each Mortgage Loan, the Company shall accurately and fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information on its borrower credit files to
each of the following credit repositories: Equifax Credit Information Services,
Inc., TransUnion, LLC and Experian Information Solution, Inc. on a monthly
basis.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii),
and minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date, which amounts shall be remitted on the Remittance Date next succeeding the
Due Period for such amounts.
With respect to any remittance received by the Purchaser after the
second Business Day following the Business Day on which such payment was due,
the Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period commencing with the day following such second Business Day and ending
with the
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Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Company of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Company.
Section 5.02 Statements to Purchaser.
Not later than the 10th day of each calendar month, the Company shall
furnish to the Purchaser or its designee (a) a Monthly Remittance Advice, with a
trial balance report as to the Due Period in the month of remittance, and (b) a
monthly default report as to the preceding calendar month, in each case, (i) by
electronic medium, and (ii) in a form, mutually acceptable to the parties.
In addition, not more than 60 days after the end of each calendar
year, the Company shall furnish to each Person who was a Purchaser at any time
during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, either
(a) the Company shall deposit in the Custodial Account from its own funds or (b)
if funds are on deposit in the Custodial Account which are not required to be
remitted on the related Remittance Date, the Company may make an appropriate
entry in its records that such funds shall be applied toward the related Monthly
Advance (provided, that any funds so applied shall be replaced by the Company no
later than the Business Day immediately preceding the next Remittance Date), in
each case, in an aggregate amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due prior
to the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan.
In no event shall the Company be obligated to make an advance under
this section 5.03 if at the time of such advance it deems such advance to be
non-recoverable. The Company shall promptly deliver an officer's certificate to
the Purchaser upon determining that any advance is non-recoverable. In the event
that upon liquidation of the Mortgage Loan, the Liquidation Proceeds are
insufficient to reimburse the Company for any Monthly Advances, the Company
shall notify the Purchaser of such shortfall by registered mail with sufficient
supporting documentation. The Purchaser shall respond to the Company within 60
days of receipt of such request. In the event that the Purchaser fails to
respond within 60 days, the Company shall have the right to deduct such
shortfall from the next remittance to be paid to the Purchaser.
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ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related LPMI Policy, if any.
If the Company reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement, it will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan
nor the outstanding principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the Underwriting Guidelines for approving the credit of the proposed
transferee. If the credit of the proposed transferee does not meet such
Underwriting Guidelines, the Company diligently shall, to the extent permitted
by the Mortgage or the Mortgage Note and by applicable law, accelerate the
maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
Monthly Remittance Advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents. In connection with any such prepayment
in full, the Company shall comply with all applicable laws regarding
satisfaction, release or reconveyance with respect to the Mortgage.
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If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within 2 Business Days of receipt of such demand by the
Purchaser. The Company shall maintain the Fidelity Bond and Errors and Omissions
Insurance Policy as provided for in Section 4.12 insuring the Company against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which
payment is in fact made of the entire amount of the Monthly Payment. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion of such Monthly Payments collected by the
Company.
Additional servicing compensation in the form of assumption fees, late
payment charges, and prepayment penalties, shall be retained by the Company. The
Company shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
thereof except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
The Company shall deliver to the Purchaser, on or before March 15 each
year beginning March 15, 2007 an Officer's Certificate, stating that (i) a
review of the activities of the Company during the preceding calendar year and
of performance under this Agreement has been made under such officer's
supervision, and (ii) the Company has complied fully with the servicing
provisions of the Agreement, and (iii) to the best of such officer's knowledge,
based on such review, the Company has fulfilled all its obligations under this
Agreement in all material respects throughout such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof and the action being
taken by the Company to cure such default.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
On or before March 15th of each year beginning March 15, 2007, the
Company, at its expense, shall (i) deliver to the Purchaser a report regarding
the Company's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB and shall address each of the
applicable Servicing Criteria; and (ii) deliver to the Purchaser a report of a
registered public accounting firm that attests to, and reports on, the
assessment of
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compliance made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and
2-02(g) of Regulation S-X under the Securities Act of 1933 and the Exchange Act.
Section 6.06 Right to Examine Company Records.
The Purchaser shall have the right to examine and audit any and all of
the books, records, or other information of the Company, whether held by the
Company or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance notice
at the sole cost and expense of the Purchaser.
Section 6.07 Appointment and Designation of Master Servicer.
The Purchaser hereby appoints and designates Aurora Loan Services,
Inc. as its master servicer (the "Master Servicer") for the Mortgage Loans
subject to this Agreement. The Company is hereby authorized and instructed to
take any and all instructions with respect to servicing the Mortgage Loans
hereunder as if the Master Servicer were the Purchaser hereunder. The
authorization and instruction set forth herein shall remain in effect until such
time as the Company shall receive written instruction from the Purchaser that
such authorization and instruction is terminated.
ARTICLE VII
AGENCY TRANSFER; PASS-THROUGH TRANSFER
Section 7.01 Removal of Mortgage Loans from Inclusion Under this
Agreement Upon an Agency Transfer, or a Pass-Through
Transfer on One or More Reconstitution Dates.
The Purchaser and the Company agree that with respect to any
Pass-Through Transfer, Whole Loan Transfer or Agency Transfers, as applicable,
the Company shall cooperate with the Purchaser in effecting such transfers and
shall negotiate in good faith and execute any Reconstitution Agreement required
to effectuate the foregoing, provided that such Reconstitution Agreement shall
be reasonably acceptable to the Company, shall not materially increase the
Company's obligations or liabilities hereunder, nor diminish any of the
Company's rights and remedies, and provide to any master servicer or the
trustee, as applicable, and/or the Purchaser any and all publicly available
information and appropriate verification of information which may be reasonably
available to the Company, whether through letters of its auditors and counsel or
otherwise, as the Purchaser, trustee or a master servicer shall reasonably
request as to the related Mortgage Loans. Purchaser shall reimburse Company for
any and all costs or expenses incurred by Company in complying with such
requests for information for which the Company shall, if requested by the
Purchaser, provide indemnification through an indemnification agreement or
otherwise; provided, however, each Purchaser and depositor shall indemnify the
Company and its subsidiaries and affiliates for all information not specifically
provided by the Company for inclusion in any disclosure statement. Such
information may be included in any disclosure document prepared in connection
with the Pass-Through Transfer, Whole Loan Transfer or
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Agency Transfer, as applicable. The Company shall execute any Reconstitution
Agreements required within a reasonable period of time after receipt of such
agreements which time shall not exceed ten (10) Business Days from the date of
receipt of such Reconstitution Agreement.
Nothing in this Section 7.01 shall be deemed to materially increase
the Company's obligations or liabilities under this Agreement.
Any Reconstitution Agreement may require the Company to remit premium
payments with respect to any LPMI Policy or "pool insurance policy" to the
related insurer;
(a) With respect to each Pass-Through Transfer, Whole Loan Transfer or
Agency Transfer entered into by the Purchaser, the Company agrees:
(i) to cooperate reasonably with the Purchaser, Xxxxxx Xxx, Xxxxxxx
Mac, the trustee or a third party purchaser and any prospective purchaser, at
the Purchaser's expense, with respect to all reasonable requests and due
diligence procedures including participating in meetings with rating agencies,
Xxxxxx Mae, Xxxxxxx Mac, bond insurers, guarantors, loss mitigation or credit
risk management advisors and such other parties as the Purchaser shall designate
and participating in meetings with prospective purchasers of the Mortgage Loans
or interests therein and providing information contained in the Mortgage Loan
Schedule including any diskette or other related data tapes provided as
reasonably requested by such purchasers;
(ii) to negotiate and execute one or more loss mitigation advisory or
credit risk management agreements between the Company and any loss mitigation or
credit risk management advisor designated by the Purchaser in its sole
discretion;
(iii) to deliver to the Purchaser and to any Person designated by the
Purchaser (a) specifically for inclusion in any prospectus or other offering
material such publicly available information regarding the Company, its
financial condition and its mortgage loan delinquency, foreclosure and loss
experience and any additional information reasonably requested by the Purchaser,
(b) any similar non-public, unaudited financial information (which the Purchaser
may, at its option and at its cost, have audited by certified public
accountants) and such other information as is reasonably requested by the
Purchaser and which the Company is capable of providing without unreasonable
effort or expense, and to indemnify the Purchaser and its affiliates for
material misstatements contained in such information specifically provided for
inclusion in a prospectus or other offering material, and if such
indemnification from the Company is provided, the Purchaser shall indemnify the
Company and its affiliates for material misstatements contained in such
prospectus or offering material that was not specifically provided by the
Company for inclusion in such prospectus or offering material, and (c) such
statements and audit letters of reputable, certified public accountants
pertaining to information provided by the Company pursuant to clause (a) above
as shall be reasonably requested by the Purchaser; and
(iv) to provide, on an ongoing basis from information obtained through
its servicing of the Mortgage Loans, any information necessary to enable the
"tax matters person" for any REMIC in a Pass-Through Transfer, including any
master servicer or trustee acting in
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such capacity, to perform its obligations in accordance with applicable law and
customary secondary mortgage market standards for securitized transactions.
(b) The Company shall provide to the Purchaser or issuer, as the case
may be, and any other participants in such Agency Transfer, Whole Loan Transfer
or Pass-Through Transfer, (i) any and all information with respect to itself,
its servicing portfolio or the Mortgage Loans and appropriate verification of
information which may be reasonably available to the Company, whether through
letters of its auditors and counsel or otherwise, as the Purchaser or any such
other participant shall request upon reasonable demand and (ii) such additional
corporate representations, warranties, covenants, opinions of counsel, letters
from auditors, and certificates of officers of the Company as are reasonably
believed necessary in connection with such transactions.
(c) To the extent required by the applicable Reconstitution Agreements
or otherwise requested by the Purchaser in connection with a Reconstitution, the
Company shall prepare Assignments of Mortgage in form and substance acceptable
to Xxxxxx Mae, Xxxxxxx Mac, the trustee or such third party, as the case may be,
for each Mortgage Loan that is part of a Reconstitution. The Company shall
execute each Assignment of Mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by Xxxxxx Mae,
Xxxxxxx Mac, the trustee or such third party, as the case may be, upon the
Company's receipt thereof. The Purchaser shall pay all fees associated with the
preparation, recording and tracking of such Assignments of Mortgage.
All Mortgage Loans not sold or transferred pursuant to an Agency
Transfer, Pass-Through Transfer or Whole Loan Transfer and any and all Mortgage
Loans repurchased by the Purchaser pursuant to Section 7.03 below with respect
to an Agency Transfer, Pass-Through Transfer or Whole Loan Transfer shall be
subject to this Agreement and shall continue to be serviced in accordance with
the terms of this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
(d) If required at any time by the Rating Agencies, Purchaser or
successor Purchaser in connection with any Agency Transfer, Pass-Through
Transfer or Whole Loan Transfer, the Company shall deliver such additional
documents from its Mortgage File within 10 days to the Custodian, successor
Purchaser or other designee of the Purchaser as the Rating Agencies, Purchaser
or successor Purchaser may require.
ARTICLE VIII
COMPANY TO COOPERATE
Section 8.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan, whether or not provided for herein, as shall be necessary, reasonable, or
appropriate with respect to the Purchaser, any regulatory requirement pertaining
to the Purchaser or the purposes of this Agreement. All such reports,
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documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Purchaser may give. Purchaser
shall pay any costs related to any special reports.
The Company shall execute and deliver all such instruments and take
all such action as the Purchaser may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
Section 8.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may
make available to a prospective Purchaser a Consolidated Statement of Operations
of the Company for the most recently completed five fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Company (and are available upon request to members or stockholders of the
Company or to the public at large). If it has not already done so, the Company
shall furnish promptly to the Purchaser copies of the statement specified above.
Unless requested by the Purchaser, the Company shall not be required to deliver
any documents which are publicly available on XXXXX.
The Company also shall make available to Purchaser or prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective Purchaser to
inspect the Company's servicing facilities or those of any Subservicer for the
purpose of satisfying such prospective Purchaser that the Company and any
Subservicer have the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE IX
THE COMPANY
Section 9.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against
any and all claims, losses, damages, penalties, fines, and forfeitures,
including, but not limited to reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser may
sustain in any way related to the failure of the Company to (a) perform its
duties and service the Mortgage Loans in strict compliance with the terms of
this Agreement, and/or (b) comply with applicable law. The Company immediately
shall notify the Purchaser if a claim is made by a third party with respect to
this Agreement or the Mortgage Loans, assume (with the prior written consent of
the Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company
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for all amounts advanced by it pursuant to the preceding sentence except when
the claim is in any way related to the Company's indemnification pursuant to
Section 3.03, or the failure of the Company to (a) service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement, and/or (b)
comply with applicable law.
Section 9.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution (i) having a net worth
of not less than $25,000,000, (ii) whose deposits are insured by the FDIC
through the BIF or the SAIF, and (iii) which is a Xxxxxx Xxx and Xxxxxxx
Mac-approved company in good standing.
Section 9.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such Person against any
Breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. The Company and any
director, officer, employee or agent of the Company may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder. The Company shall not be under
any obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Company may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable in respect to
this Agreement and the rights and duties of the parties hereto. In such event,
the Company shall be entitled to reimbursement from the Purchaser of the
reasonable legal expenses and costs of such action.
Section 9.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent Purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, plant, personnel,
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records and procedures, its integrity, reputation and financial standing, and
the continuance thereof. Therefore, the Company shall neither assign this
Agreement or the servicing hereunder or delegate its rights or duties hereunder
or any portion hereof (to other than a Subservicer) or sell or otherwise dispose
of all or substantially all of its property or assets without the prior written
consent of the Purchaser, which consent shall be granted or withheld in the sole
discretion of the Purchaser; provided, however, notwithstanding any of the
foregoing or any other provision in this Agreement, the Company may assign its
right and obligations hereunder to Servicing LP or any entity that is directly
or indirectly owned or controlled by the Company and the Company guarantees the
performance by Servicing LP or such entity of all obligations hereunder.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 9.04, in
the event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof (to other than a Subservicer) or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Purchaser, then the Purchaser shall have the right to terminate this
Agreement upon notice given as set forth in Section 10.01, without any payment
of any penalty or damages and without any liability whatsoever to the Company or
any third party.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part
of the Company:
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of two days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Company
set forth in this Agreement which continues unremedied for a period of 30
days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by the Purchaser;
or
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(iii) the Company fails to be in compliance with the "doing business"
or licensing laws of any jurisdiction which noncompliance materially and
adversely affects the Company's ability to service the Mortgage Loans in
compliance with the terms of this Agreement which continues unremedied for
a period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Company by
the Purchaser; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceedings of or relating to the
Company or of or relating to all or substantially all of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three Business
Days; or
(vii) the Company ceases to meet the qualifications of Xxxxxx Xxx or
Xxxxxxx Mac lender; or
(viii) the Company fails to maintain a minimum net worth of
$25,000,000; or
(ix) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all of its
property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof (to other than a Subservicer) in violation of Section 9.04.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatsoever rights the Purchaser may have at
law or equity to damages, including injunctive relief and specific performance,
the Purchaser, by notice in writing to the Company, may terminate all the rights
and obligations of the Company under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. Notwithstanding the foregoing, with respect to
the Event of Default delineated in (iii) above, the Purchaser may terminate all
the rights and obligations of the Company under this Agreement solely with
respect to the Mortgage Loans affected by such Event of Default.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written
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request from any Purchaser, the Company shall prepare, execute and deliver to
the successor entity designated by the Purchaser any and all documents and other
instruments, place in such successor's possession all Mortgage Files, and do or
cause to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including but not limited to the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, at the Company's sole expense. The Company shall cooperate with the
Purchaser and such successor in effecting the termination of the Company's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Company to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the
Company in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, after providing 30 days' written notice,
at its sole option, any rights the Company may have hereunder, without cause, as
provided in this Section 11.02. Any such notice of termination shall be in
writing and delivered to the Company by registered mail as provided in Section
12.05.
In the event the Purchaser terminates the Company without cause with
respect to some or all of the Mortgage Loans, the Purchaser shall be required to
pay to the Company a Termination Fee in an amount equal to 2.00% of the
outstanding principal balance of the terminated Mortgage Loans as of the date of
such termination.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties
under this Agreement pursuant to Sections 9.04, 10.01, 11.01 or pursuant to
Section 11.02 after the 30 day period has expired, the Purchaser shall, (i)
succeed to and assume all of the Company's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in clauses (i) through (iii) of Section 9.02 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Company shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Sections 3.03, 3.04, and 3.06, it being understood and agreed
that the provisions of such Sections 3.01, 3.02, 3.03, 3.04, and 3.06 shall be
applicable to the Company notwithstanding any such sale, assignment, resignation
or termination of the Company, or the termination of this Agreement.
Any termination or resignation of the Company or termination of this
Agreement pursuant to Section 9.04, 10.01, 11.01 or 11.02 shall not affect any
claims that any Purchaser may have against the Company arising out of the
Company's actions or failure to act prior to any such termination or
resignation.
The Company shall deliver promptly to the successor servicer the Funds
in the Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company
shall notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
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Section 12.02 Amendment.
This Agreement may be amended from time to time by the Company and the
Purchaser by written agreement signed by the Company and the Purchaser.
Section 12.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by registered mail, postage prepaid, addressed as follows:
(i) if to the Company:
Countrywide Home Loans Inc.,
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
or such other address as may hereafter be furnished to the Purchaser in
writing by the Company;
(ii) if to Purchaser:
Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Contract Finance
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
-43-
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option accordance
with Section 14 of the Purchase Agreement.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company
but subject to the limit set forth in Section 2.02 hereof, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by (i) executing an Assignment and Assumption Agreement mutually
agreeable to both the Purchaser and the Company, which agreement must not be
unreasonably withheld or delayed or (ii) in connection with a Pass-Through
Transfer, through any related Reconstitution Agreement or assignment agreement
with an affiliate of the Purchaser, a depositor, a trustee or any other
appropriate party in such Pass-Through Transfer. Upon such assignment of rights
and assumption of obligations, the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such Mortgage
Loans and the Purchaser as assignor shall be released from all obligations
hereunder with respect to such Mortgage Loans from and after the date of such
assignment and assumption to the extent provided in the Assignment and
Assumption Agreement or Reconstitution Agreement or other assignment agreement
in a Pass-Through Transfer. All references to the Purchaser in this Agreement
shall be deemed to include its assignee or designee.
Section 12.11 No Personal Solicitation.
From and after the related Closing Date, the Company hereby agrees
that it will not take any action or permit or cause any action to be taken by
any of its agents or affiliates, or by any independent contractors or
independent mortgage brokerage companies on the
-44-
Company's behalf, to personally, by telephone or mail, solicit the Mortgagor
under any Mortgage Loan for the purpose of refinancing such Mortgage Loan;
provided, that the Company may solicit any Mortgagor for whom the Company has
received a request for verification of mortgage, a request for demand for
payoff, a mortgagor initiated written or verbal communication indicating a
desire to prepay the related Mortgage Loan, or the mortgagor initiates a title
search, provided further, it is understood and agreed that promotions undertaken
by the Company or any of its affiliates which (i) concern optional insurance
products or other additional products or (ii) are directed to the general public
at large, including, without limitation, mass mailings based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 12.11 nor is the Company prohibited
from responding to unsolicited requests or inquiries made by a Mortgagor or an
agent of a Mortgagor. Notwithstanding the foregoing, the following
solicitations, if undertaken by the Company or any affiliate of the Company,
shall not be prohibited under this Section 12.11: (i) solicitations that are
directed to the general public at large, including, without limitation, mass
mailings based on commercially acquired mailing lists and newspaper, radio,
television and other mass media advertisements; (ii) borrower messages included
on, and statement inserts provided with, the monthly statements sent to
Mortgagors; provided, however, that similar messages and inserts are sent to the
borrowers of other mortgage loans serviced by the Company.
[Signature page follows]
-45-
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COUNTRYWIDE HOME LOANS, INC.
By:
------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
A-1
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
[Intentionally Omitted]
B-1
EXHIBIT C
MORTGAGE LOAN DOCUMENTS
[Intentionally Omitted]
C-1
EXHIBIT D-1
CUSTODIAL ACCOUNT CERTIFICATION
_____________________, 200_
Countrywide Home Loans, Inc. hereby certifies that it has established
the account described below as a Custodial Account pursuant to Section 4.04 of
the Flow Seller's Warranties and Servicing Agreement, dated as of June 1, 2006,
Conventional Residential Mortgage Loans.
Title of Account: Countrywide Home Loans, Inc. in trust for the Purchaser
Account Number: ___________________
Address of office or branch
of the Company at
which Account is maintained:
________________________________________
________________________________________
________________________________________
________________________________________
Countrywide Home Loans, Inc.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
X-0-0
XXXXXXX X-0
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________________, 200_
To:
________________________________
________________________________
________________________________
(the "Depository")
As Company under the Flow Seller's Warranties and Servicing Agreement,
dated as of June 1, 2006, Conventional Residential Mortgage Loans (the
"Agreement"), we hereby authorize and request you to establish an account, as a
Custodial Account pursuant to Section 4.04 of the Agreement, to be designated as
"Countrywide Home Loans, Inc., in trust for the Purchaser - Conventional
Residential Mortgage Loans." All deposits in the account shall be subject to
withdrawal therefrom by order signed by the Company. You may refuse any deposit
which would result in violation of the requirement that the account be fully
insured as described below. This letter is submitted to you in duplicate. Please
execute and return one original to us.
Countrywide Home Loans, Inc.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
D-2-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
D-2-2
EXHIBIT E-1
ESCROW ACCOUNT CERTIFICATION
__________________, 200_
Countrywide Home Loans, Inc. hereby certifies that it has established
the account described below as an Escrow Account pursuant to Section 4.06 of the
Flow Seller's Warranties and Servicing Agreement, dated as of June 1, 2006,
Conventional Residential Mortgage Loans.
Title of Account: "Countrywide Home Loans, Inc. in trust for the Purchaser and
various Mortgagors."
Account Number: _______________
Address of office or branch
of the Company at
which Account is maintained: ________________________________________
________________________________________
________________________________________
________________________________________
Countrywide Home Loans, Inc.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
E-1-1
EXHIBIT E-2
ESCROW ACCOUNT LETTER AGREEMENT
___________________, 200_
To: _________________________________
_________________________________
_________________________________
_________________________________
(the "Depository")
As Company under the Flow Seller's Warranties and Servicing Agreement,
dated as of June 1, 2006, Conventional Residential Mortgage Loans (the
"Agreement"), we hereby authorize and request you to establish an account, as an
Escrow Account pursuant to Section 4.07 of the Agreement, to be designated as
"Countrywide Home Loans, Inc., in trust for the Purchaser and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Company. You may refuse any deposit which would
result in violation of the requirement that the account be fully insured as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
Countrywide Home Loans, Inc.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
E-2-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
E-2-2
EXHIBIT F
FORM OF ACKNOWLEDGMENT AND CONVEYANCE AGREEMENT
(Group No. 200_-____)
This is an Acknowledgment and Conveyance Agreement delivered pursuant
to that certain Flow Seller's Warranties and Servicing Agreement, dated as of
June 1, 2006 (the "Purchase Agreement"), between XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC. (the "Purchaser"), and COUNTRYWIDE HOME LOANS,
INC. (the "Company"). All capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Purchase Agreement.
The Purchaser and the Company hereby confirm that they have reached
agreement on the purchase, sale and servicing of the Mortgage Loans described on
the Mortgage Loan Schedule attached as Annex 1 hereto on the terms and
conditions set forth in the Purchase Agreement (which terms and conditions are
incorporated herein by this reference) and the Purchase Price and Terms Letter,
dated as of [___________ __, 200_] between the parties hereto.
Accordingly, on this [___ day of _________, 200_], the Company does
hereby sell, transfer, assign, set over and convey to the Purchaser all right,
title and interest of the Company in and to the Mortgage Loans, excluding the
servicing rights related thereto which shall be retained by the Company, listed
on the Mortgage Loan Schedule attached as Annex 1 hereto, including all interest
and principal received by the Company on or with respect to the Mortgage Loans
after the related Cut-off Date, together with all of the Company's right, title
and interest in and to each Custodial Account. The Company has delivered to the
Custodian the documents for each Mortgage Loan to be purchased as set forth in
the Agreement. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File are vested in the Purchaser and the
ownership of all records and documents required to be included in the Mortgage
Loan File and Servicing File but not delivered or received until after the
Closing Date shall immediately vest in the Purchaser.
By its execution and delivery of this Acknowledgment and Conveyance
Agreement, the Company hereby restates each of the representations and
warranties contained in Sections 3.01 and 3.02 of the Agreement as of the date
hereof and Annex 2 hereto (if attached) is true and correct as of the date
hereof with respect to the Company and each of the Mortgage Loans listed on the
Mortgage Loan Schedule attached as Annex 1 hereto.
By its execution and delivery of this Acknowledgment and Conveyance
Agreement, the Company agrees that it shall service the Mortgage Loans on behalf
of the Purchaser in accordance with the terms and conditions contained in the
Agreement.
This Acknowledgment and Conveyance Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
an original, and all such counterparts shall constitute one and the same
instrument.
F-1
COUNTRYWIDE HOME LOANS, INC., as Company
By:
------------------------------------
Name:
Title:
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., as Purchaser
By:
------------------------------------
Name:
Title:
F-2
Annex 1 to
Acknowledgment and Conveyance Agreement
MORTGAGE LOAN SCHEDULE
[Each Mortgage Loan Schedule shall provide the information required by Exhibit A
to the Purchase Agreement with respect to each Mortgage Loan as of the related
Cut-Off Date]
F-3
Annex 2 to
Acknowledgment and Conveyance Agreement
POOL CHARACTERISTICS
[This Annex shall only apply to a Mortgage Loan Package to the extent such
Mortgage Loan Package has a fixed set of Mortgage Loans as of the Closing Date.]
The Company hereby represents and warrants to the Purchaser, as to each Mortgage
Loan, that as of [_________ __, 200__] or as of such other date specifically
provided therein:
Pool Characteristics. With respect to the aggregate unpaid principal
balance of all of the Mortgage Loans as of the Closing Date, (a) the Mortgage
Loans are secured by real property improved by one- to four- family dwellings
with original terms of up to [___] years, (b) with respect to each ARM Mortgage
Loan the Index shall be as set forth on the Mortgage Loan Schedule, (c) the
maximum Mortgage Interest Rate of the Mortgage Loans is [___]%, (d) the minimum
Mortgage Interest Rate of the Mortgage Loans is [___]%, (e) the Mortgage Loans
have a weighted average remaining term of [___] months, (f) each of the
Mortgaged Properties consists of a single parcel of real property of which (i)
at least [___]% are attached or detached one family residences, (ii)
approximately [___]% are individual condominium units in a condominium project,
(iii) approximately [___]% are units in planned unit developments, (iv)
approximately [___]% are two-to-four family residential dwellings, (v) not more
than [___] % are townhouses and (vi) not more than [___]% are manufactured
housing which are permanently affixed to the ground, (g) no more than [___]% of
the Mortgage Loans are rate-term refinance mortgage loans, (h) no more than
[___]% of the Mortgage Loans are cash out refinance mortgage loans, (i) at least
[___]% of the Mortgage Loans are purchase money mortgage loans, (j) the
Mortgaged Properties are located as follows (i) approximately [___]% in [___],
(ii) approximately [___]% in [_____] and (iii) no other state shall contain a
percentage which is greater than [___]% and (k) with respect to the ARM Mortgage
Loans, the weighted average initial period gross Lifetime Rate Cap shall be
[___]% and the weighted average lifetime Mortgage Interest Rate of [___]%. With
respect to the aggregate unpaid principal balance of the Mortgage Loans at the
time of origination, (a) no more than [___]% of the Mortgaged Properties were
investment properties and (b) at least [___]% of the Mortgaged Properties were
owner-occupied primary residences. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, (a) at least [___]% of the Mortgage
Loans shall have full documentation, (b) no more than [___]% of the Mortgage
Loans shall have stated income documentation and (c) no more than [___]% of the
Mortgage Loans shall have alternate income documentation. The maximum LTV at
origination of the Mortgage Loans in Pool 1 was not more than [___]% and the
maximum LTV at origination of the Mortgage Loans in Pool 2 was not more than
[___]%. The weighted average LTV at origination of the Mortgage Loans in Pool 1
was not more than [___]% and the weighted average LTV at origination of the
Mortgage Loans in Pool 2 was not more than [___]%. The weighted average FICO
Score of the Mortgage Loans in Pool 1 is not less than [___] and the weighted
average FICO Score of the Mortgage Loans in Pool 2 is not less than [___]. Of
the Mortgage Loans in Pool 1, [___]% have a credit grade of [___], [___]% have a
credit grade of [___], [___]% have a credit grade of [___],[___]% have a credit
grade of [___]and [___]% have a credit grade of [___]. Of the Mortgage Loans in
Pool 2, [___]% have a credit grade of [___], [___]% have a credit grade of
[___], [___]% have a credit grade of [___],
F-4
[___]% have a credit grade of [___] and [___]% have a credit grade of [___]. The
Mortgage Loans has the approximate characteristics as set forth in the Purchase
Price and Terms Letter.
F-5
EXECUTION
AMENDMENT REG AB
TO THE FLOW SELLER'S WARRANTIES AND SERVICING AGREEMENT
This is Amendment Reg AB ("Amendment Reg AB"), dated as of June 16,
2006, by and between Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
(the "Purchaser"), and Countrywide Home Loans, Inc. (the "Company") to that
certain Flow Seller's Warranties and Servicing Agreement dated as of June 1,
2006 (the "Existing Agreement") by and between the Company and the Purchaser (as
amended, modified or supplemented).
WITNESSETH
WHEREAS, the Company and the Purchaser have agreed, subject to the
terms and conditions of this Amendment Reg AB that the Existing Agreement be
amended to reflect agreed upon revisions to the terms of the Existing Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Agreement is hereby amended as follows:
1. Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Existing Agreement. The Existing Agreement is hereby
amended by adding the following definitions in their proper alphabetical order:
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above; and (iii)
either (x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Company in origination of mortgage loans of the same
type as the Mortgage Loans for the Company's own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Company on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Company; and (iv) the Company employed, at the time
such Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Company.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: An agreement or agreements entered into by the
Company and the Purchaser and/or certain third parties in connection with a
Reconstitution with respect to any or all of the Mortgage Loans serviced under
the Agreement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered, rated
mortgage-backed securities or (2) an issuance of publicly offered, rated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Servicer: As defined in Section 2(c)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, for the avoidance of doubt, that the term
"Subservicer" shall not include (i) any master servicer, or any special servicer
engaged at the
2
request of a Depositor, Purchaser or investor in a Securitization Transaction or
(ii) any "back-up servicer" or trustee performing servicing functions on behalf
of a Securitization Transaction, in each case so long as such party does not act
on behalf of the Company or any Subservicer.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
2. The Purchaser and the Company agree that the Existing Agreement is hereby
amended by adding the following provisions:
(a) Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose of
Article 2 of this Agreement is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. Because Regulation AB is applicable by its terms only to
offerings of asset-backed securities that are registered under the Securities
Act and there are market uncertainties with respect to the disclosure that
investors in privately offered securities may request, the parties agree over
time to negotiate in good faith with respect to the provision of comparable
disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder. The
Company acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets or advice of counsel, and agrees to negotiate in good faith
with the Purchaser or any Depositor with regard to reasonable requests for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary to permit the Purchaser or such Depositor to comply with
the provisions of Regulation AB, together with such disclosures relating to the
Company, any Subservicer, any Third-Party Originator and the Mortgage Loans, or
the servicing of the Mortgage Loans necessary in order to effect such
compliance.
The Purchaser (including any of its assignees or designees) shall cooperate
with the Company by providing timely notice of requests for information under
these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
3
(b) Additional Representations and Warranties of the Company.
(i) The Company shall be deemed to represent to the Purchaser and to any
Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Section 2(c) and as of the Closing Date of each
related Securitization Transaction that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date: (i) the Company is not aware and
has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other securitization due to
any act or failure to act of the Company; (ii) the Company has not been
terminated as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage loans involving
the Company as servicer has been disclosed or reported by the Company; (iv) no
material changes to the Company's policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Company's financial
condition that could have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental proceedings pending
(or known to be contemplated) against the Company, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations or relationships
required to be disclosed under Item 1119 between the Company, any Subservicer or
any Third-Party Originator and any of the parties listed in Section
2(c)(i)(D)(4)-(9) which are identiifed in writing by the Purchaser or Depositor
in advance of the Securitization Transaction pursuant to Section 2(c)(i)(D).
(ii) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Section 2(c), the Company shall make reasonable best efforts
within five Business Days but in no event later than ten Business Days following
such request, confirm in writing the accuracy of the representations and
warranties set forth in paragraph (i) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
(c) Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall (1)
make reasonable best efforts within five Business Days but in no event later
than ten Business Days following request by the Purchaser or any Depositor,
provide to the Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in writing reasonably
necessary for compliance with Regulation AB, the information and materials
specified in paragraphs (i), (ii), (iii) and (vi) of this Section 2(c), and (2)
as promptly as practicable following notice to or discovery by the Company,
provide to the Purchaser and any Depositor (in writing) the information
specified in paragraph (iv) of this Section.
4
(i) If so requested by the Purchaser or any Depositor, the Company shall
provide such information regarding (x) the Company, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent, if applicable), or (y) as applicable, each Third-Party
Originator, and (z) as applicable, each Subservicer, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105 (subject to paragraph (b)
below), 1110, 1117 and 1119 of Regulation AB. Such information shall include, at
a minimum:
(A) the originator's form of organization;
(B) to the extent material, a description of the originator's
origination program and how long the originator has been engaged in
originating residential mortgage loans, which description shall include a
discussion of the originator's experience in originating mortgage loans of
a similar type as the Mortgage Loans; if material, information regarding
the size and composition of the originator's origination portfolio; and
information that may be material to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans and
such other information as the Purchaser or any Depositor may reasonably
request for the purpose of compliance with Item 1110(b)(2) of Regulation
AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated by governmental authorities) against
the Company, each Third-Party Originator, if applicable, and each
Subservicer; and
(D) a description of any affiliation or relationship between the
Company, each Third-Party Originator, if applicable, each Subservicer and
any of the parties to a Securitization Transaction delineated in Section
2(c)(i)(D) (4)-(9) below, as such parties are identified to the Company by
the Purchaser or any Depositor in writing in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide) Static
Pool Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (a) the Company, if the Company is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent, if
applicable), and/or (b) as applicable, each Third-Party Originator. Such Static
Pool Information
5
shall be prepared by the Company (or, if applicable, a Third-Party Originator)
on the basis of its reasonable, good faith interpretation of the requirements of
Item 1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Company (or Third-Party Originator, as applicable) Static Pool
Information with respect to more than one mortgage loan type, the Purchaser or
any Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content of such
Static Pool Information may be in the form customarily provided by the Company,
and need not be customized for the Purchaser or any Depositor. Such Static Pool
Information for each vintage origination year or prior securitized pool, as
applicable, shall be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage origination year or
prior securitized pool. The most recent periodic increment must be as of a date
no later than 135 days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included or incorporated
by reference. The Static Pool Information shall be provided in an electronic
format that provides a permanent record of the information provided, such as a
portable document format (pdf) file, or other such electronic format.
Promptly following notice or discovery of a material error, as determined
in the Company's sole discretion, in Static Pool Information provided pursuant
to the immediately preceding paragraph (including an omission to include therein
information required to be provided pursuant to such paragraph), the Company
shall provide corrected Static Pool Information to the Purchaser or any
Depositor, as applicable, in the same format in which Static Pool Information
was previously provided to such party by the Company.
If so requested by the Purchaser or any Depositor, the Company shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants pertaining to Static Pool
Information relating to prior securitized pools for securitizations closed on or
after January 1, 2006 or, in the case of Static Pool Information with respect to
the Company's or, if applicable, Third-Party Originator's originations or
purchases, to calendar months commencing January 1, 2006, as the Purchaser or
such Depositor shall reasonably request. Such letters shall be addressed to and
be for the benefit of such parties as the Purchaser or such Depositor shall
designate, which shall be limited to any Sponsor, any Depositor, any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction or any other party that is reasonably and
customarily entitled to receive such statements and letters in a Securitization
Transaction at the time of delivery. Any such statement or letter may take the
form of a standard, generally applicable document accompanied by a reliance
letter authorizing reliance by the addressees designated by the Purchaser or
such Depositor.
(iii) If reasonably requested by the Purchaser or any Depositor, the
Company shall provide such information regarding the Company, as servicer of the
Mortgage Loans, and each Subservicer (each of the Company and each Subservicer,
for purposes of this paragraph, a "Servicer"), as is requested for the purpose
of compliance with Item 1108 of Regulation AB. Such information shall include,
at a minimum:
(A) the Servicer's form of organization;
6
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the
Servicer that may be material, in the reasonable determination of the
Purchaser or any Depositor, to any analysis of the servicing of the
Mortgage Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans of a type
similar to the Mortgage Loans involving the Servicer have defaulted or
experienced an early amortization or other performance triggering
event because of servicing during the three-year period immediately
preceding the related Securitization Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to
other securitizations of residential mortgage loans involving the
Servicer as a servicer during the three-year period immediately
preceding the related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing
default or to application of a servicing performance test or trigger;
and
(5) such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item 1108(b)(2)
of Regulation AB;
(C) a description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the
Servicer's policies or procedures with respect to the servicing function it
will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect on
the performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding
the related Securitization Transaction, which may be limited to a statement
by an authorized officer of the Servicer to the effect that the Servicer
has made all advances required to be made on residential mortgage loans
serviced by it during such period, or, if such statement would not be
accurate,
7
information regarding the percentage and type of advances not made as
required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and procedures designed
to address any special or unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(iv) If reasonably requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Company shall notify the
Purchaser and any Depositor in writing of any material litigation or
governmental proceedings pending against the Company, any Subservicer or any
Third-Party Originator, and (b) provide to the Purchaser and any Depositor a
description of such proceedings.
(v) As a condition to the succession to the Company or any Subservicer as
servicer or subservicer under this Agreement or any applicable Reconstitution
Agreement by any Person (i) into which the Company or such Subservicer may be
merged or consolidated, or (ii) which may be appointed as a successor to the
Company or any Subservicer, the Company shall provide to the Purchaser and any
Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Purchaser and any Depositor
of such succession or appointment and (y) in writing, all information reasonably
requested by the Purchaser or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.
(vi) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if
reasonably requested by the Purchaser or any Depositor, the Company shall
provide such information regarding the performance or servicing of the Mortgage
Loans as is reasonably required to facilitate preparation of distribution
reports in accordance with Item 1121 of Regulation AB; provided that to the
extent that any such information requested by the Purchaser or any Depositor is
not readily available to the Company, the time for delivery of such information
by the Company to the Purchaser or any Depositor shall be such period that does
not interfere with the facilitation or preparation of distribution reports in
accordance with Item 1121 of Regulation AB. Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered by the
servicer under this Agreement, commencing with the first such report due not
less than ten Business Days following such request or such longer period as
provided herein.
8
(vii) If reasonably requested in writing by the Purchaser or any Depositor
for the purpose of satisfying its reporting obligation under the Exchange Act
with respect to any class of asset-backed securities, the Company shall provide
to the Purchaser and any Depositor a description of any affiliations or
relationships required to be disclosed under Item 1119 of Regulation AB between
the Company, any Subservicer or any Third-Party Originator and any of the
parties listed clauses (i)(4)-(9) of this Section 2(c) that develop following
the closing date of a Securitization Transaction. For purposes of the foregoing,
to the extent that the Company does not receive notification by March 1 of the
calendar year in which a Form 10-K for the related Securitization Transaction
must be filed, the Company (1) shall be entitled to assume that the parties to
the Securitization Transaction are the same as such parties listed on the most
recent previously delivered written notification (or on the closing date, if no
such written notification has been delivered), (2) shall not be obligated to
disclose any affiliations or relationships that may develop after the closing
date for the Securitization Transaction with any parties not identified to the
Company pursuant to clause (D) of paragraph (i) of this Section 2(c), and (3)
shall be entitled to rely upon any written identification of parties provided by
the Depositor, the Purchaser or any master servicer.
(d) Servicer Compliance Statement.
The Company shall deliver using best reasonable efforts on or before March
1, but in no event later than March 15, of each calendar year, commencing in
2007, to the Purchaser and any Depositor a statement of compliance addressed to
the Purchaser and such Depositor and signed by an authorized officer of the
Company, to the effect that (i) a review of the Company's servicing activities
during the immediately preceding calendar year (or applicable portion thereof)
and of its performance under the servicing provisions of this Agreement and any
applicable Reconstitution Agreement during such period has been made under such
officer's supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Company has fulfilled all of its servicing obligations under
this Agreement and any applicable Reconstitution Agreement in all material
respects throughout such calendar year (or applicable portion thereof) or, if
there has been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the nature
and the status thereof.
(e) Report on Assessment of Compliance and Attestation.
(i) The Company shall using best reasonable efforts on or before March 1,
but in no event later than March 15, of each calendar year, commencing in 2007:
(A) deliver to the Purchaser and any Depositor a report regarding the
Company's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report
shall be addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, and shall address each of the applicable
Servicing Criteria specified on Exhibit B hereto;
9
(B) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm that attests to, and reports on, the
assessment of compliance made by the Company and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;
(C) cause each Subservicer and each Subcontractor determined by the
Company pursuant to Section 2(f)(ii) to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB (each, a
"Participating Entity"), to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and when provided
in paragraphs (i) and (ii) of this Section 2(e); and
(D) if requested in writing by the Purchaser or any Depositor not
later than February 1 of the calendar year in which such certification is
to be delivered, deliver to the Person that will be responsible for signing
the certification (a "Sarbanes Certification") required by Rules 13a-14(d)
and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed issuer with
respect to a Securitization Transaction a certification in the form
attached hereto as Exhibit A; provided that such back-up certification
delivered by the Company shall not be filed as an exhibit to, or included
in, any filing with the Commission unless required by applicable law or
interpretive guidance provided by the Commission or its staff.
The Company acknowledges that the party identified in clause (i)(D) above may
rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (i)(D) above unless a Depositor is required under the Exchange Act to
file an annual report on Form 10-K with respect to an issuing entity whose asset
pool includes Mortgage Loans.
(ii) Each assessment of compliance provided by a Subservicer pursuant to
Section 2(e)(i)(A) shall address each of the applicable Servicing Criteria
specified on Exhibit B hereto. An assessment of compliance provided by a
Participating Entity pursuant to Section 2(e)(i)(C) need not address any
elements of the Servicing Criteria other than those specified by the Company
pursuant to Section 2(f).
(f) Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any Reconstitution Agreement unless the Company complies with
the provisions of paragraph (i) of this subsection (f). The Company shall not
hire or otherwise utilize the services of any Subcontractor, and shall not
permit any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Company as servicer
under this Agreement or any applicable Reconstitution Agreement unless the
Company complies with the provisions of paragraph (ii) of this subsection (f).
10
(i) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subservicer. The Company
shall cause any Subservicer used by the Company (or by any Subservicer) for the
benefit of the Purchaser and any Depositor to comply with the provisions of this
Section and with Sections 2(b), 2(c)(iii), 2(c)(v), 2(d) and 2(e) of this
Agreement to the same extent as if such Subservicer were the Company, and to
provide the information required with respect to such Subservicer under Section
2(c)(iv) of this Agreement. The Company shall be responsible for obtaining from
each Subservicer and delivering to the Purchaser and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
2(d), any assessment of compliance and attestation required to be delivered by
such Subservicer under Section 2(e) and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Section 2(e) as and when required to be delivered.
(ii) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The Company
shall promptly upon request provide to the Purchaser and any Depositor (or any
designee of the Depositor, such as a master servicer or administrator) a written
description of the role and function of each Subcontractor utilized by the
Company or any Subservicer, specifying (A) the identity of each such
Subcontractor, (B) which (if any) of such Subcontractors are Participating
Entities, and (C) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified pursuant to
clause (B) of this paragraph; provided that such request shall be made for the
purpose of satisfying the Depositor's reporting obligation under the Securities
Act and the Exchange Act with respect to such information.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Section 2(e) of this Agreement to the
same extent as if such Subcontractor were the Company. The Company shall be
responsible for obtaining from each Subcontractor and delivering to the
Purchaser and any Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Section 2(e), in each case
as and when required to be delivered.
(g) Indemnification; Remedies.
(i) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible for the
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing and of the
Depositor, and shall hold each of them harmless from and against any losses,
11
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(A)(1) any untrue statement of a material fact contained or alleged to
be contained in any information, report, certification, accountants' letter
or other material provided in written or electronic form under this
Amendment Reg AB by or on behalf of the Company, or provided under this
Amendment Reg AB by or on behalf of any Subservicer, Participating Entity
or, if applicable, Third-Party Originator (collectively, the "Company
Information"), or (2) the omission or alleged omission to state in the
Company Information a material fact required to be stated in the Company
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (2) of this paragraph shall
be construed solely by reference to the Company Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Company Information or any
portion thereof is presented together with or separately from such other
information;
(B) any failure by the Company, any Subservicer, any Participating
Entity or any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Amendment Reg AB, including any failure by the Company to
identify pursuant to Section 2(f)(ii) any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of Regulation AB;
or
(C) any breach by the Company of a representation or warranty set
forth in Section 2(b)(i) or in a writing furnished pursuant to Section
2(b)(ii) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such closing date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section 2(b)(ii) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (i)(B) of
this Section, the Company shall promptly reimburse the Purchaser, any Depositor,
as applicable, and each Person responsible for the execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such party
in order to obtain the information, report, certification, accountants' letter
or other material not delivered as required by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator.
(ii) (A) Any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Amendment Regulation AB (including, without limitation, any
statement, writing or notification required by a representation or warranty
set forth in Section 2), shall, except as provided in clause (B) of this
paragraph, if not cured within three (3) Business Days of the Company's
receipt of notice of such
12
failure (or immediately and automatically, without notice or grace period,
in the event that such failure will result or has resulted in the
Purchaser's or its affiliated sponsor's loss of right, for which the
Purchaser or Depositor cannot obtain a waiver from the Commission, to
maintain any registration statement relating to securitization transactions
of the same type as the Securitization Transactions contemplated hereunder)
constitute an Event of Default with respect to the Company under this
Agreement and any applicable Reconstitution Agreement, and shall entitle
the Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable
Reconstitution Agreement to the contrary) of any compensation to the
Company; provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the
Company as servicer, such provision shall be given effect.
(B) Any failure by the Company, any Subservicer or any Participating
Entity to deliver any information, report, certification or accountants'
letter when and as required under Section 2(d) or 2(e), including (except
as provided below) any failure by the Company to identify pursuant to
Section 2(f)(ii) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, which continues
unremedied for ten calendar days after the date on which such information,
report, certification or accountants' letter was required to be delivered
shall constitute an Event of Default with respect to the Company under this
Agreement and any applicable Reconstitution Agreement, and shall entitle
the Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company as servicer under this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Company; provided, however it is understood that the
Company shall remain entitled to receive reimbursement for all unreimbursed
Monthly Advances and Servicing Advances made by the Company under this
Agreement and/or any applicable Reconstitution Agreement. Notwithstanding
anything to the contrary set forth herein, to the extent that any provision
of this Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given
effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate
the rights and obligations of the Company pursuant to this subparagraph
(ii)(B) if a failure of the Company to identify a Subcontractor
"participating in the servicing function" within the meaning of Item 1122
of Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
(C) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser, such as a master servicer) and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the
Mortgage Loans to a successor servicer. The provisions of
13
this paragraph shall not limit whatever rights the Purchaser or any
Depositor may have under other provisions of this Agreement and/or any
applicable Reconstitution Agreement or otherwise, whether in equity or at
law, such as an action for damages, specific performance or injunctive
relief.
(iii) The Purchaser shall indemnify and hold harmless the Company, each
affiliate of the Company, any Subservicer, any Participating Entity, and,
if applicable, any Third-Party Originator, each Person who controls any of
such parties (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) and the respective present and former
directors, officers, employees and agents of each of the foregoing and of
the Company, from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any
other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(A) any untrue statement of a material fact contained or alleged to be
contained in any offering materials and filings with the Commission related
to a Securitization Transaction, including without limitation the
registration statement, prospectus and prospectus supplement, and any
amendments or supplements to the foregoing (collectively, the
"Securitization Materials"), or
(B) the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the Securitization
Materials or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
but, in each case, only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission is other than the Company
Information.
14
3. The Company acknowledges that a Subservicer or Subcontractor that performs
services with respect to mortgage loans involved in a Securitization Transaction
in addition to the Mortgage Loans may be determined by a Depositor to be a
Participating Entity on the basis of the aggregate balance of such mortgage
loans, without regard to whether such Subservicer or Subcontractor would be a
Participating Entity with respect to the Mortgage Loans viewed in isolation. The
Company shall (A) respond as promptly as practicable to any good faith request
by the Purchaser or any Depositor for information regarding each Subservicer and
each Subcontractor and (B) cause each Subservicer and each Subcontractor with
respect to which the Purchaser or any Depositor requests delivery of an
assessment of compliance and accountants' attestation to deliver such within the
time required under Section 2(e). Notwithstanding the foregoing, the liability
of the Company with respect to any information, assessment or attestation
furnished by or on behalf of a Subservicer or Subcontractor under this Section 3
(where such Subservicer or Subcontractor would not have been deemed to be a
Participating Entity based on the Mortgage Loans alone) shall be limited to the
ratable liability incurred in respect of such information, assessment or
attestation furnished by or on behalf of a Subservicer or Subcontractor
determined based upon the value of the Mortgage Loans as a proportionate share
of all mortgage loans included in the related Securitization Transaction for
which such Subservicer or Subcontractor performs services.
4. Notwithstanding any other provision of this Amendment Reg AB, (i) the Company
shall seek the consent of the Purchaser for the utilization of all third party
service providers, including Subservicers and Subcontractors, when required by
and in accordance with the terms of the Existing Agreement and (ii) references
to the Purchaser shall be deemed to include any assignees or designees of the
Purchaser, such as any Depositor, a master servicer or a trustee.
5. The Existing Agreement is hereby amended by adding the Exhibits attached
hereto as Exhibit A and Exhibit B to the end thereto. References in this
Amendment Reg AB to "this Agreement" or words of similar import (including
indirect references to the Agreement) shall be deemed to be references to the
Existing Agreement as amended by this Amendment Reg AB. Except as expressly
amended and modified by this Agreement Reg AB, the Agreement shall continue to
be, and shall remain, in full force and effect in accordance with its terms. In
the event of a conflict between this Amendment Reg AB and any other document or
agreement, including without limitation the Existing Agreement, this Amendment
Reg AB shall control.
6. THIS AMENDMENT REG AB SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
7. This Amendment Reg AB may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
AB shall bind and inure to the benefit of and be enforceable by the Company and
the Purchaser and the respective permitted successors and assigns of the Company
and the successors and assigns of the Purchaser. This Amendment Reg AB shall not
be assigned, pledged or hypothecated by the Company to a third party, except
with respect to an assignment to the Servicing LP or any entity that is directly
or indirectly owned or
15
controlled by the Company as contemplated in Section 9.04 of the Existing
Agreement, without the prior written consent of the Purchaser, which consent may
be withheld by the Purchaser pursuant to Section 9.04 of the Existing Agreement.
The Existing Agreement as amended by this Amendment Reg AB may be assigned,
pledged or hypothecated by the Purchaser in whole or in part, and with respect
to one or more of the Mortgage Loans, without the consent of the Company subject
to Sections 2.02 and 12.10 of the Existing Agreement.
[Signatures Commence on Following Page]
16
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC.
Purchaser
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COUNTRYWIDE HOME LOANS, INC.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Signature page to Amendment Reg AB
EXHIBIT A
FORM OF ANNUAL CERTIFICATION
Re: The [___________] agreement dated as of [_____], 200[_] (the
"Agreement"), among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of
Countrywide Home Loans, Inc., certify to [the Depositor][or] [Master Servicer],
and [its] officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the servicer compliance statement of the Company
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Company's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Company during 200[ ] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing Information, taken as
a whole, does not contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in the
light of the circumstances under which such statements were made, not
misleading with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing Assessment
or the Attestation Report, the Company has fulfilled its obligations under
the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Company
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Company and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
A-1
Date:
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By:
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Name:
Title:
A-2
EXHIBIT B
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
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REFERENCE CRITERIA
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GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a NOT APPLICABLE
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect X
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.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
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.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash X
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
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.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
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.
B-1
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
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REFERENCE CRITERIA
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INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the X
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 mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two X
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree X
with cancelled checks, or other form of payment, or custodial
bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool X
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan 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 mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (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.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
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.
1122(d)(4)(viii) Records documenting collection efforts are maintained during X
the period a mortgage loan 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 mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage X
loans with variable rates are computed based on the related
mortgage loan documents.
B-2
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
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REFERENCE CRITERIA
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1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan 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
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or X
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.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to X
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.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within X
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item NOT APPLICABLE
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
B-3
