MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
Exhibit
99.15b
EXECUTION
COPY
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
and
WILMINGTON
FINANCE INC.,
Seller
Dated
as
of November 1, 2006
Conventional,
Fixed
and
Adjustable Rate, Prime/Alt-A Residential Mortgage Loans
TABLE
OF
CONTENTS
Page
|
SECTION
1.
|
DEFINITIONS.
|
1
|
|
SECTION
2.
|
AGREEMENT
TO PURCHASE.
|
13
|
|
SECTION
3.
|
MORTGAGE
SCHEDULES.
|
14
|
|
SECTION
4.
|
PURCHASE
PRICE.
|
14
|
|
SECTION
5.
|
EXAMINATION
OF MORTGAGE FILES.
|
15
|
|
SECTION
6.
|
CONVEYANCE
FROM SELLERS TO PURCHASER.
|
15
|
|
SECTION
7.
|
SERVICING
OF THE MORTGAGE LOANS.
|
17
|
|
SECTION
8.
|
TRANSFER
OF SERVICING.
|
19
|
|
SECTION
9.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.
|
21
|
|
SECTION
10.
|
CLOSING.
|
41
|
|
SECTION
11.
|
CLOSING
DOCUMENTS.
|
41
|
|
SECTION
12.
|
COSTS.
|
43
|
|
SECTION
13.
|
COOPERATION
OF SELLER WITH A RECONSTITUTION.
|
43
|
|
SECTION
14.
|
THE
SELLER.
|
44
|
|
SECTION
15.
|
FINANCIAL
STATEMENTS.
|
46
|
|
SECTION
16.
|
MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST.
|
46
|
|
SECTION
17.
|
NOTICES.
|
47
|
|
SECTION
18.
|
SEVERABILITY
CLAUSE.
|
48
|
|
SECTION
19.
|
COUNTERPARTS.
|
48
|
|
SECTION
20.
|
GOVERNING
LAW.
|
48
|
|
SECTION
21.
|
INTENTION
OF THE PARTIES.
|
48
|
|
SECTION
22.
|
SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
00
|
-x-
|
XXXXXXX
00.
|
WAIVERS.
|
49
|
|
SECTION
24.
|
EXHIBITS.
|
49
|
|
SECTION
25.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
49
|
|
SECTION
26.
|
REPRODUCTION
OF DOCUMENTS.
|
50
|
|
SECTION
27.
|
FURTHER
AGREEMENTS.
|
50
|
|
SECTION
28.
|
RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
|
50
|
|
SECTION
29.
|
NO
SOLICITATION
|
50
|
|
SECTION
30.
|
WAIVER
OF TRIAL BY JURY.
|
51
|
|
SECTION
31.
|
GOVERNING
LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.
|
51
|
|
SECTION
32.
|
CONFIDENTIALITY
|
51
|
|
SECTION
33.
|
COMPLIANCE
WITH REGULATION AB.
|
52
|
EXHIBITS
|
EXHIBIT
A
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
B
|
[RESERVED]
|
|
EXHIBIT
C
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
D
|
[RESERVED]
|
|
EXHIBIT
E
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
F
|
FORM
OF SECURITY RELEASE CERTIFICATION
|
|
EXHIBIT
G
|
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
|
|
EXHIBIT
H
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
I
|
FORM
OF ASSIGNMENT AND RECOGNITION AGREEMENT
|
-ii-
This
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the “Agreement”),
dated
as of November 1, 2006, by and between Xxxxxx Xxxxxxx Mortgage Capital Inc.,
a
New York corporation, having an office at 0000 Xxxxxxxx, 0xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the “Purchaser”)
and
WILMINGTON FINANCE INC., a Delaware corporation, having an office at 000
Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Meeting, Pennsylvania 19462 (the
“Seller”).
W I T N E S S E T H:
WHEREAS,
the Seller desires to sell, from time to time, to the Purchaser on a
nonexclusive basis, and the Purchaser desires to purchase, from time to time,
from the Seller, without recourse to the Seller but subject to the terms of
this
Agreement, certain first and second lien, adjustable-rate and fixed-rate
prime/Alt-A residential mortgage loans (the “Mortgage
Loans”)
on a
servicing released basis as described herein, and which shall be delivered
in
pools of whole loans (each, a “Mortgage
Loan Package”)
on
various dates as provided herein (each, a “Closing
Date”);
WHEREAS,
each Mortgage Loan is secured by a mortgage, deed of trust or other security
instrument creating a first or second lien on a residential dwelling located
in
the jurisdiction indicated on the Mortgage Loan Schedule for the related
Mortgage Loan Package;
WHEREAS,
the Purchaser and the Seller wish to prescribe the manner of the conveyance,
servicing and control of the Mortgage Loans; and
WHEREAS,
following its purchase of the Mortgage Loans from the Seller, the Purchaser
desires to sell some or all of the Mortgage Loans to one or more purchasers
as a
whole loan transfer or a public or private, rated or unrated mortgage
Securitization Transaction;
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. Definitions.
For
purposes of this Agreement the following capitalized terms shall have the
respective meanings set forth below.
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.
Act:
The
National Housing Act, as amended from time to time.
Adjustable
Rate Mortgage Loan:
An
adjustable rate Mortgage Loan purchased pursuant to this Agreement.
Affiliate:
With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes of this
definition, “control” when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or
otherwise and the terms “controlling” and “controlled” have meanings correlative
to the foregoing.
Agency
Transfer:
A
Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement:
This
Mortgage Loan Purchase and Warranties 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.
Assignment
and Conveyance Agreement:
As
defined in Subsection 6.01.
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.
Balloon
Mortgage Loan:
Any
Mortgage Loan (a) that requires only payments of interest until the stated
maturity date of the Mortgage Loan or (b) for which Monthly Payments of
principal (not including the payment due on its stated maturity date) are based
on an amortization schedule that would be insufficient to fully amortize the
principal thereof by the stated maturity date of the Mortgage Loan.
Business
Day:
Any day
other than (i) a Saturday or Sunday, (ii) a day on which banking and
savings and loan institutions, in the State of New York or the State in which
either Seller’s servicing operations are located or (iii) the state in
which the Custodian’s operations are located, are authorized or obligated by law
or executive order to be closed.
Closing
Date:
The
date or dates on which the Purchaser from time to time shall purchase, and
the
Seller from time to time shall sell, the Mortgage Loans listed on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
CLTV:
As of
any date and as to any Second Lien Loan, the ratio, expressed as a percentage,
of the (a) sum of (i) the outstanding principal balance of the Second
Lien Loan and (ii) the outstanding principal balance as of such date of any
mortgage loan or mortgage loans that are senior or equal in priority to the
Second Lien Loan and which are secured by the same Mortgaged Property to
(b) the Appraised Value as determined pursuant to the Underwriting
Guidelines of the related Mortgaged Property as of the origination of the Second
Lien Loan.
-2-
Code:
Internal Revenue Code of 1986, as amended.
Commission:
The
United States Securities and Exchange Commission.
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.
Covered
Loan:
A
Mortgage Loan categorized as Covered pursuant to Appendix E of Standard &
Poor’s Glossary.
Custodial
Agreement:
The
agreement(s) governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents. If more
than
one Custodial Agreement is in effect at any given time, all of the individual
Custodial Agreements shall collectively be referred to as the “Custodial
Agreement.”
Custodian:
LaSalle
Bank, National Association, a national banking association, and its successors
in interest or any successor to the Custodian under the Custodial Agreement
as
therein provided.
Cut-off
Date:
The
date or dates designated as such on the related Mortgage Loan Schedule with
respect to the related Mortgage Loan Package.
Deemed
Material and Adverse Representation:
Each
representation and warranty identified as such in Subsection 9.02
of this
Agreement.
Deleted
Mortgage Loan:
A
Mortgage Loan that is repurchased or replaced or to be replaced with a Qualified
Substitute Mortgage Loan by the Seller in accordance with the terms of this
Agreement.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date:
The
second Business Day of the month in which the related Remittance Date
occurs.
Due
Date:
The day
of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive
of any days of grace.
Eligible
Account:
Any of
(i) an account maintained with a federal or state chartered depository
institution or trust company the short-term unsecured debt obligations of which
(or, in the case of a depository institution or trust company that is a
subsidiary of a holding company, the short-term unsecured debt obligations
of
such holding company) are rated A-1 by Standard & Poor’s or Prime-1 by
Moody’s (or a comparable rating if another Rating Agency is specified by the
Purchaser by written notice to the Seller) at the time any amounts are held
on
deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iii) a trust account or accounts maintained
with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity.
-3-
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other document.
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.
Xxxxxx
Mae Transfer:
As
defined in Section 13.
FHA:
The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
First
Lien Loan:
A
Mortgage Loan secured by a first lien Mortgage on the related Mortgaged
Property.
Fitch:
Fitch,
Inc., or its successor in interest.
Fixed
Rate Mortgage Loan:
A fixed
rate mortgage loan purchased pursuant to this Agreement.
Xxxxxxx
Mac:
The
Federal Home Loan Mortgage Corporation, or any successor thereto.
Xxxxxxx
Mac Transfer:
As
defined in Section 13.
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.
High
Cost Loan:
A
Mortgage Loan (a) covered by the Home Ownership and Equity Protection Act
of 1994 (“HOEPA”),
(b)
with an “annual percentage rate” or total “points and fees” payable by the
related Mortgagor (as each such term is calculated under HOEPA) that exceed
the
thresholds set forth by HOEPA and its implementing regulations, including 12
C.F.R. § 226.32(a)(1)(i) and (ii), (c) classified as a “high cost home,”
“threshold,” “covered,” (excluding New Jersey “Covered Home Loans” as that term
is defined in clause (1) of the definition of that term in the New Jersey
Home Ownership Security Act of 2002 that were originated between November 26,
2003 and July 7, 2004), “high risk home,” “predatory” or similar loan under any
other applicable federal, state or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (d) categorized as High Cost pursuant
to
Appendix E of Standard & Poor’s Glossary. For avoidance of doubt, the
parties agree that this definition shall apply to any law regardless of whether
such law is presently, or in the future becomes, the subject of judicial review
or litigation.
-4-
Home
Loan: A
Mortgage Loan categorized as Home Loan pursuant to Appendix E of
Standard & Poor’s Glossary.
HUD:
The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to Mortgage Insurance issued by the FHA. The term “HUD,”
for
purposes of this Agreement, is also deemed to include subdivisions thereof
such
as the FHA and Government National Mortgage Association.
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
Rate Adjustment Date:
With
respect to each Adjustable Rate Mortgage Loan, the date, specified in the
related Mortgage Note and the related Mortgage Loan Schedule, on which the
Mortgage Interest Rate is adjusted.
Interim
Funder:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the interim funder pursuant to the MERS Procedures
Manual.
Investor:
With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
Lifetime
Rate Cap:
The
provision of each Mortgage Note related to an Adjustable Rate Mortgage Loan
which provides for an absolute maximum Mortgage Interest Rate thereunder. The
Mortgage Interest Rate during the terms of each Adjustable Rate Mortgage Loan
shall not at any time exceed the Mortgage Interest Rate at the time of
origination of such Adjustable Rate Mortgage Loan by more than the amount per
annum set forth on the related Mortgage Loan Schedule.
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.
-5-
Loan
Performance Information:
As
defined in Subsection 34.03(e).
Loan-to-Value
Ratio
or
LTV:
With
respect to any Mortgage Loan, the ratio (expressed as a percentage) of the
outstanding principal amount 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 at origination and (b) if the Mortgage Loan was made
to finance the acquisition of the related Mortgaged Property, the purchase
price
of the Mortgaged Property.
Manufactured
Home:
A
single
family residential unit that is constructed in a factory in sections in
accordance with the Federal Manufactured Home Construction and Safety Standards
adopted on July 15, 1976, by the Department of Housing and Urban
Development (“HUD Code”), as amended in 2000, which preempts state and local
building codes. Each unit is identified by the presence of a HUD
Plate/Compliance Certificate label. The sections are then transported to the
site and joined together and affixed to a pre-built permanent foundation (which
satisfies the manufacturer’s requirements and all state, county, and local
building codes and regulations). The manufactured home is built on a
non-removable, permanent frame chassis that supports the complete unit of walls,
floors, and roof. The underneath part of the home may have running gear (wheels,
axles, and brakes) that enable it to be transported to the permanent site.
The
wheels and hitch are removed prior to anchoring the unit to the permanent
foundation. The manufactured home must be classified as real estate and taxed
accordingly. The permanent foundation may be on land owned by the mortgager
or
may be on leased land.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and
its
successors in interest.
MERS
Designated Mortgage Loan:
Mortgage Loans for which (a) the Seller has designated or will designate
MERS as, and has taken or will take such action as is necessary to cause MERS
to
be, the mortgagee of record, as nominee for the Seller, in accordance with
MERS
Procedures Manual and (b) the Seller has designated or will designate the
Purchaser as the Investor on the MERS System.
MERS
Procedures Manual:
The
MERS Procedures Manual, as it may be amended, supplemented or otherwise modified
from time to time.
MERS
Report:
The
report from the MERS System listing MERS Designated Mortgage Loans and other
information.
MERS
System:
MERS
mortgage electronic registry system, as more particularly described in the
MERS
Procedures Manual.
Monthly
Payment:
The
scheduled monthly payment of principal and interest on a Mortgage
Loan.
Moody’s:
Xxxxx’x
Investors Service, Inc., and any successor thereto.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien, in the case of a First Lien Loan, or a second lien, in
the
case of a Second Lien Loan, on the Mortgaged Property.
-6-
Mortgage
File:
The
items pertaining to a particular Mortgage Loan referred to in Exhibit A
annexed
hereto, and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note with respect to each Mortgage
Loan.
Mortgage
Interest Rate Cap:
With
respect to an Adjustable Rate Mortgage Loan, the limit on each Mortgage Interest
Rate adjustment as set forth in the related 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
applicable Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage File, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing
Rights and all other rights, benefits, proceeds and obligations arising from
or
in connection with such Mortgage Loan, excluding replaced or repurchased
mortgage loans.
Mortgage
Loan Documents:
The
documents required to be delivered to the Custodian pursuant to Subsection 6.03
hereof
with respect to any Mortgage Loan.
Mortgage
Loan Package:
Each
pool of Mortgage Loans, which shall be purchased by the Purchaser from the
Seller from time to time on each Closing Date.
Mortgage
Loan Schedule:
The
schedule of Mortgage Loans setting forth the following information with respect
to each Mortgage Loan in the related Mortgage Loan Package: (1) the
Seller’s Mortgage Loan identifying number; (2) the Mortgagor’s name;
(3) the street address of the Mortgaged Property including the city, state
and zip code; (4) a code indicating whether the Mortgagor is self-employed;
(5) a code indicating whether the Mortgaged Property is owner-occupied;
(6) the number and type of residential units constituting the Mortgaged
Property; (7) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule; (8) with respect to
each First Lien Loan, the Loan-to-Value Ratio at origination, and with respect
to each Second Lien Loan, the CLTV at origination; (9) the Mortgage
Interest Rate as of the related Cut-off Date; (10) the date on which the
Monthly Payment was due on the Mortgage Loan and, if such date is not consistent
with the Due Date currently in effect, such Due Date; (11) the stated
maturity date; (12) the first payment date; (13) the amount of the Monthly
Payment as of the related Cut-off Date; (14) the last payment date on which
a payment was actually applied to the outstanding principal balance;
(15) the original principal amount of the Mortgage Loan; (16) the
principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (17) delinquency status as of the
related Cut-off Date; (18) with respect to each Adjustable Rate Mortgage
Loan, the Interest Rate Adjustment Date; (19) with respect to each
Adjustable Rate Mortgage Loan, the Gross Margin; (20) with respect to each
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap under the terms of the
Mortgage Note; (21) with respect to each Adjustable Rate Mortgage Loan, a
code indicating the type of Index; (22) the type of Mortgage Loan (i.e.,
Fixed or Adjustable Rate Mortgage Loan, First or Second Lien Loan); (23) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (24) a code indicating the
documentation style (i.e., full, alternative or reduced); (25) asset
verification (Y/N); (26) the loan credit classification (as described in
the Underwriting Guidelines); (27) whether such Mortgage Loan provides for
a Prepayment Penalty and, if applicable, the
Prepayment Penalty period;
(28) the Mortgage Interest Rate as of origination; (29) the credit
risk score (FICO score); (30) the date of origination; (31) with
respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate adjustment
period; (32) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate adjustment percentage; (33) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate floor; (34) with
respect to each Adjustable Rate Mortgage Loan, the Mortgage Interest Rate Cap
as
of the first Interest Rate Adjustment Date; (35) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Rate Cap subsequent to the first
Interest Rate Adjustment Date; (36) with respect to each Adjustable Rate
Mortgage Loan, a code indicating whether the Mortgage Loan provides for negative
amortization; (37) with respect to each Adjustable Rate Mortgage Loan with
negative amortization, the negative amortization limit; (38) a code
indicating whether the Mortgage Loan is a Home Loan; (39) a code indicating
whether the Mortgage Loan is a Balloon Mortgage Loan; (40) the Due Date for
the first Monthly Payment; (41) the original Monthly Payment due;
(42) a code indicating the PMI Policy provider and percentage of coverage,
if applicable; (43) Appraised Value; (44) appraisal type;
(45) automated valuation model (AVM); (46) appraisal date;
(47) with respect to the related Mortgagor, the debt-to-income ratio; (48)
whether the Mortgage Loan has Monthly Payments that are interest-only for a
period of time, and the interest-only period, if applicable (and with respect
to
each Second Lien Loan, whether the related first lien mortgage loan has monthly
payments that are interest-only for a period of time, and the interest-only
period, if applicable); (49) the social security number of the Mortgagor;
(50) a code indicating whether the Mortgagor’s race and/or ethnicity is
(i) native American or Alaskan native, (ii) Asian/Pacific islander,
(iii) African American, (iv) white, (v) Hispanic or Latino,
(vi) other minority, (vii) not provided by the Mortgagor,
(viii) not applicable (if the Mortgagor is an entity) and (ix) unknown
or missing; (51) a description of the Prepayment Penalty, if applicable,
including whether the applicable Prepayment Penalty provision is “hard” or
“soft”; and (52) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage Loan and the MERS Identification Number, if applicable.
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; (4) the weighted
average maturity of the Mortgage Loans; (5) the applicable Cut-off Date;
and (6) the applicable Closing Date.
-7-
Mortgage
Note:
The
note or other evidence of the indebtedness of a Mortgagor secured by a
Mortgage.
Mortgaged
Property:
With
respect to each Mortgage Loan, the Mortgagor’s real property securing repayment
of a related Mortgage Note, consisting of an unsubordinated estate in fee simple
or, with respect to real property located in jurisdictions in which the use
of
leasehold estates for residential properties is a widely-accepted practice,
a
leasehold estate, in a single parcel or multiple parcels of real property
improved by a Residential Dwelling.
Mortgagor:
The
obligor on a Mortgage Note.
Officer’s
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or a President or a Vice President and by the Treasurer or the Secretary
or one of the Assistant Treasurers or Assistant Secretaries of the Seller,
and
delivered to the Purchaser as required by this Agreement.
Periodic
Rate Cap:
The
provision of each Mortgage Note related to an Adjustable Rate Mortgage Loan
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. The Periodic Rate
Cap
for each Adjustable Rate Mortgage Loan is the rate set forth as such on the
related Mortgage Loan Schedule.
Person:
Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy:
A
policy of primary mortgage guaranty insurance issued by an insurer acceptable
under the Underwriting Guidelines and qualified to do business in the
jurisdiction where the Mortgaged Property is located.
Preliminary
Mortgage Schedule:
As
defined in Section 3.
Prepayment
Penalty:
With
respect to each Mortgage Loan, the penalty if the Mortgagor prepays such
Mortgage Loan as provided in the related Mortgage Note or Mortgage.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any Prepayment
Penalty
or
premium thereon, and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Purchase
Price:
The
price paid on the related Closing Date by the Purchaser to the Seller in
exchange for the Mortgage Loans purchased on such Closing Date as calculated
in
Section 4
of this
Agreement.
Purchase
Price and Terms Agreement:
Those
certain agreements setting forth the general terms and conditions of the
transactions consummated herein and identifying the Mortgage Loans to be
purchased from time to time hereunder, by and between the Seller and the
Purchaser.
Purchaser:
Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, and its successors in
interest and assigns, or any successor to the Purchaser under this Agreement
as
herein provided.
Qualified
Appraiser:
An
appraiser, accepted by the Seller, who had no interest, direct or indirect,
in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation was not affected by the approval or disapproval of the Mortgage
Loan, and such appraiser and the appraisal made by such appraiser both satisfied
the requirements of Title XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated.
-8-
Qualified
Correspondent:
Any
Person from which the Seller purchased Mortgage Loans, provided that the
following conditions are satisfied: (i) such Mortgage Loans were originated
pursuant to an agreement between the Seller and such Person that contemplated
that such Person would underwrite mortgage loans from time to time, for sale
to
the Seller, in accordance with underwriting guidelines designated by the Seller
(“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 were acquired by the Seller within 180 days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same
type
as the Mortgage Loans for the Seller’s own accounts or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, 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
Seller.
Qualified
Substitute Mortgage Loan:
A
mortgage loan eligible to be substituted by the Seller 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 outstanding principal balance of the Deleted Mortgage Loan (the amount
of
any shortfall will be remitted to the Purchaser by the Seller in accordance
with
the terms of this Agreement in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than 1% greater than the
Mortgage Interest 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) be of the same type as the Deleted Mortgage
Loan (i.e., fixed rate or adjustable rate with same Mortgage Interest Rate
Caps); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 9.
Rating
Agency:
Any of
Fitch, Moody’s or Standard & Poor’s, or their respective successors
designated by the Purchaser.
Reconstitution:
A Whole
Loan Transfer or a Securitization Transaction.
Reconstitution
Agreement:
As
defined in Section 13.
Reconstitution
Date:
As
defined in Section 13.
-9-
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§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. 1,506-1,631 (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.
Relief
Act:
The
Servicemembers’ Civil Relief Act.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G 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
fifth Business Day of any month, beginning with the first Remittance Date after
the related Closing Date.
Repurchase
Price:
With
respect to any Mortgage Loan, a price equal to (a) during the first year
immediately following the related Closing Date, an amount equal to the
percentage of par as stated in the related Purchase Price and Terms Agreement
multiplied by the then outstanding principal balance of such Mortgage Loan
as of
the date of such repurchase, plus accrued interest on such Mortgage Loan at
the
Mortgage Interest Rate from the date to which interest had last been paid
through the day immediately preceding the date of such repurchase, plus the
amount of any outstanding advances owed to any servicer, plus all costs and
expenses incurred by the Purchaser arising out of or based upon such breach,
including without limitation costs and expenses incurred in the enforcement
of
the Seller's repurchase obligation hereunder, (b) during the second year
following the Closing Date, an amount equal to the product of (i) 100% plus
an
amount equal to (A) a fraction, whose numerator is equal to 12 less the number
of months since the first anniversary of the Closing Date and whose denominator
is equal to 12, multiplied by (B) the percentage of par as stated in the related
Purchase Price and Terms Agreement less 100%, multiplied by (ii) the then
outstanding principal balance of such Mortgage Loan as of the date of such
repurchase, plus accrued interest on such Mortgage Loan at the Mortgage Interest
Rate from the date to which interest had last been paid through the day
immediately preceding the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred
by the Purchaser arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder, and (c) thereafter, an amount equal to the
then
outstanding principal balance of such Mortgage Loan as of the date of such
repurchase plus accrued interest on such Mortgage Loan at the Mortgage Interest
Rate from the date to which interest had last been paid through the day
immediately preceding the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred
by the Purchaser arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder.
-10-
Residential
Dwelling:
Any one
of the following: (i) a detached one-family dwelling, (ii) a detached
two- to four-family dwelling, (iii) a one-family dwelling unit in a
condominium project or (iv) a one-family dwelling in a planned unit
development, none of which is a dwelling unit in a residential cooperative
housing corporation, mobile home or Manufactured Home.
RESPA:
Real
Estate Settlement Procedures Act, as amended from time to time.
Second
Lien Loan:
A
Mortgage Loan secured by a second lien Mortgage on the related Mortgaged
Property.
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 or privately placed, rated or unrated
mortgage-backed securities or (2) an issuance of publicly offered or privately
placed, rated or unrated 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.
Seller:
As
defined in the initial paragraph of the Agreement, together with its successors
in interest.
Sellers:
As
defined in the initial paragraph of the Agreement.
Seller
Information:
As
defined in Subsection 33.04(a).
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Seller consisting of
originals of all documents in the Mortgage File which are not delivered to
the
Purchaser or the Custodian and copies of the Mortgage Loan Documents set forth
in Section 2
of the
Custodial Agreement.
Servicing
Representations and Warranties:
The
representations and warranties set forth in Subsection 9.02(a), (f), (h), (ii),
(ll), (mm) and (qq).
Servicing
Rights:
Any and
all of the following: (a) any and all rights to service the Mortgage Loans;
(b) any payments to or monies received by the Seller for servicing the
Mortgage Loans; (c) any late fees, penalties or similar payments with
respect to the Mortgage Loans; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate
to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all
accounts and other rights to payment related to any of the property described
in
this paragraph; and (g) any and all documents, files, records, servicing
files, servicing documents, servicing records, data tapes, computer records,
or
other information pertaining to the Mortgage Loans or pertaining to the past,
present or prospective servicing of the Mortgage Loans.
-11-
Sponsor:
The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard
& Poor’s:
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx
Companies Inc., and any successor thereto.
Standard &
Poor’s Glossary: The
Standard & Poor’s LEVELS®
Glossary, as may be in effect from time to time.
Static
Pool Information:
Static
pool information as described in Item 1105(a)(1)-(3) and 1105(c) of Regulation
AB.
Successor
Servicer:
Any
servicer of one or more Mortgage Loans designated by the Purchaser as being
entitled to the benefits of the indemnifications set forth in Subsections 9.03
and 14.01.
Stated
Principal Balance:
As to
each Mortgage Loan on any date of determination, (i) the principal balance
of such Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser
with respect to the related Mortgage Loan representing payments or recoveries
of
principal on such Mortgage Loan.
Third-Party
Originator:
Each
Person, other than a Qualified Correspondent, that originated Mortgage Loans
acquired by the Seller.
Transfer
Date:
The
date on which the Purchaser, or its designee, shall receive the transfer of
servicing responsibilities and begin to perform the servicing of the Mortgage
Loans with respect to the related Mortgage Loan Package, and the Seller shall
cease all servicing responsibilities. Such date shall occur on the day indicated
by the Purchaser to the Seller in the related Purchase Price and Terms
Agreement.
Underwriting
Guidelines:
The
underwriting guidelines of the Seller, a copy of which is attached as an exhibit
to the related Assignment and Conveyance.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.
SECTION
2. Agreement
to Purchase.
The
Seller agrees to sell from time to time on a nonexclusive basis, and the
Purchaser agrees to purchase from time to time without recourse to the Seller
but subject to the representations and warranties and terms contained in this
Agreement, Mortgage Loans having an aggregate principal balance on the related
Cut-off Date in an amount as set forth in the related Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller
as
evidenced by the actual aggregate principal balance of the Mortgage Loans
accepted by the Purchaser on each Closing Date.
-12-
SECTION
3. Mortgage
Schedules.
The
Seller from time to time shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
each
Closing Date in accordance with the related Purchase Price and Terms Agreement
and this Agreement (each, a “Preliminary
Mortgage Schedule”).
The
Seller shall deliver the related Mortgage Loan Schedule for the Mortgage Loans
to be purchased on a particular Closing Date to the Purchaser at least five
(5)
Business Days prior to the related Closing Date. The related Mortgage Loan
Schedule shall be the related Preliminary Mortgage Schedule with those Mortgage
Loans which have not been funded prior to the related Closing Date
deleted.
SECTION
4. Purchase
Price.
The
Purchase Price for each Mortgage Loan shall be the percentage of par as stated
in the related Purchase Price and Terms Agreement (subject to adjustment as
provided therein), multiplied by the aggregate principal balance, as of the
related Cut-off Date, of the Mortgage Loans listed on the related Mortgage
Loan
Schedule, after application of scheduled payments of principal due on or before
the related Cut-off Date, but only to the extent such payments were actually
received. The initial principal amount of the related Mortgage Loans shall
be
the aggregate principal balance of the Mortgage Loans, so computed as of the
related Cut-off Date. If so provided in the related Purchase Price and Terms
Agreement, portions of the Mortgage Loans shall be priced
separately.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest on the current principal amount of
the
related Mortgage Loans as of the related Cut-off Date at the weighted average
Mortgage Interest Rate of those Mortgage Loans. The Purchase Price plus accrued
interest as set forth in the preceding paragraph shall be paid to the Seller
by
wire transfer of immediately available funds to an account designated by the
Seller in writing.
The
Purchaser shall be entitled to (1) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans (minus that portion of any such payment which is allocable to
the
period prior to the related Cut-off Date). The outstanding principal balance
of
each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date,
to the extent actually collected, together with any unscheduled principal
prepayments collected prior to such Cut-off Date; provided, however, that
payments of scheduled principal and interest paid prior to such Cut-off date,
but to be applied on a Due Date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts shall be the property of the Purchaser and shall be remitted by the
Seller to the Purchaser on the next Remittance Date.
-13-
SECTION
5. Examination
of Mortgage Files.
At
least
ten (10) Business Days prior to the related Closing Date, the Seller shall
(a) deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at the Seller’s place of business in Plymouth Meeting, Pennsylvania.
Such examination may be made by the Purchaser or its designee at any reasonable
time before or after the related Closing Date. If the Purchaser makes such
examination prior to the related Closing Date and reasonably determines, in
good
faith, that any Mortgage Loans are unacceptable to the Purchaser for any reason,
such Mortgage Loans shall be deleted from the related Mortgage Loan Schedule,
and may be replaced, at the Seller’s option, by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial
or
complete examination of the Mortgage Files shall not affect the Purchaser’s (or
any of its successor’s) rights to demand repurchase, substitution or other
relief as provided herein.
SECTION
6. Conveyance
from Sellers to Purchaser.
Subsection
6.01 Conveyance
of Mortgage Loans.
The
Seller shall execute and deliver an Assignment and Conveyance Agreement in
the
form attached hereto as Exhibit G (the “Assignment
and Conveyance Agreement”).
The
Seller shall cause the Servicing File retained by the Seller pursuant to this
Agreement to be appropriately identified in the Seller’s computer system and/or
books and records, as appropriate, to clearly reflect the sale of the related
Mortgage Loan to the Purchaser. The Seller shall release from their custody
the
contents of any Servicing File retained by it only in accordance with this
Agreement.
Subsection
6.02 Books
and Records.
Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, an Affiliate of the Seller, the
Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select; provided,
however,
that if
a Mortgage has been recorded in the name of MERS or its designee, the Seller
is
shown as the owner of the related Mortgage Loan on the records of MERS for
purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS. Notwithstanding the foregoing, each Mortgage
and
related Mortgage Note shall be possessed solely by the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received
by
the Seller after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the Purchaser;
provided,
however,
that
all funds received on or in connection with a Mortgage Loan shall be received
and held by the Seller in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as the owner of
the
Mortgage Loans pursuant to the terms of this Agreement.
-14-
The
Seller shall be responsible for maintaining, and shall maintain, a complete
set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular,
the
Seller shall maintain in their possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of prudent mortgage lenders who originate mortgage loans similar
to
the Mortgage Loans in the jurisdiction where the Mortgaged Property is located,
including but not limited to documentation as to the method used in determining
the applicability of the provisions of the National Flood Insurance Act of
1968,
as amended, to the Mortgaged Property and documentation evidencing insurance
coverage. To the extent that original documents are not required for purposes
of
realization of Liquidation Proceeds or Insurance Proceeds, documents maintained
by the Seller may be in the form of microfilm or microfiche so long as the
Seller complies with the requirements of the Xxxxxx Mae Guides or prudent
mortgage lenders who originate mortgage loans similar to the Mortgage Loans
in
the jurisdiction where the Mortgaged Property is located.
The
sale
of each Mortgage Loan shall be reflected on the Seller’s balance sheet and other
financial statements as a sale of assets by the Seller.
Subsection
6.03 Delivery
of Mortgage Loan Documents.
The
Seller shall deliver and release to the Custodian no later than two (2) Business
Days prior to the related Closing Date those Mortgage Loan Documents set forth
on Exhibit A
hereto
as required by the Custodial Agreement with respect to each Mortgage Loan set
forth on the related Mortgage Loan Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement for the related Closing
Date, as evidenced by the Initial Certification of the Custodian in the form
annexed to the Custodial Agreement. The Seller shall comply with the terms
of
the Custodial Agreement and the Purchaser shall pay all fees and expenses of
the
Custodian.
The
Seller shall forward to the Custodian, or after the related Closing Date, to
such other Person as the Purchaser shall designate in writing, original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution, provided, however, that the Seller shall provide
the
Custodian, or to such other Person as the Purchaser shall designate in writing,
with a certified true copy of any such document submitted for recordation within
two weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document certified by
the
appropriate public recording office or title closing agent to be a true and
complete copy of the original within ninety days of its submission for
recordation.
In
the
event any document required to be delivered to the Custodian in the Custodial
Agreement, including an original or copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered
to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, within 90 days following the related Closing Date (other than with
respect to the Assignments of Mortgage which shall be delivered to the Custodian
in blank and recorded subsequently by the Purchaser or its designee), and in
the
event that the Seller does not cure such failure within 30 days of discovery
or
receipt of written notification of such failure from the Purchaser, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by such
Seller at the price and in the manner specified in Subsection 9.03.
The
foregoing repurchase obligation shall not apply in the event that such Seller
cannot deliver an original document submitted for recordation to the appropriate
public recording office within the specified period due to a delay caused by
the
recording office in the applicable jurisdiction; provided that such Seller
shall
instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer’s certificate of a servicing
officer of such Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, such Seller
shall reissue and deliver to the Purchaser or its designee said officer’s
certificate.
-15-
The
Seller shall pay all initial recording fees, if any, for the assignments of
mortgage and any other fees or costs in transferring all original documents
to
the Custodian or, upon written request of the Purchaser, to the Purchaser or
the
Purchaser’s designee. The Purchaser or the Purchaser’s designee shall be
responsible for recording the Assignments of Mortgage and shall be reimbursed
by
the Seller for the costs associated therewith pursuant to the preceding
sentence.
Subsection
6.04 Quality
Control Procedures.
The
Seller shall have an internal quality control program that verifies, on a
regular basis, the existence and accuracy of the legal documents, credit
documents, property appraisals, and underwriting decisions. The program shall
include evaluating and monitoring the overall quality of the Seller’s loan
production and servicing activities. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent
acts; and guard against errors and omissions by officers, employees, or other
authorized persons.
Subsection
6.05 MERS
Designated Loans.
With
respect to each MERS Designated Mortgage Loan, the Seller shall, on or prior
to
the related Closing Date, designate the Purchaser as the Investor and the
Custodian as custodian, and no Person shall be listed as Interim Funder on
the
MERS System. In addition, on or prior to the related Closing Date, Seller shall
provide the Custodian and the Purchaser with a MERS Report listing the Purchaser
as the Investor, the Custodian as custodian and no Person as Interim Funder
with
respect to each MERS Designated Mortgage Loan.
SECTION
7. Servicing
of the Mortgage Loans.
The
Mortgage Loans have been sold by the Seller to the Purchaser on a servicing
released basis. Subject to, and upon the terms and conditions of this Agreement,
the Seller hereby sells, transfers, assigns, conveys and delivers to the
Purchaser the Servicing Rights.
-16-
The
Purchaser shall retain the Seller as contract servicer of the Mortgage Loans
for
an interim period pursuant to and in accordance with the terms and conditions
set forth in this section provided that if the related Transfer Date has not
occurred on or prior to the date which is 60 days after the related Closing
Date, the Purchaser and the Seller hereby agrees to negotiate in good faith
and
enter into a more detailed interim servicing agreement mutually acceptable
to
the parties. The Seller shall service the Mortgage Loans on an “actual/actual”
basis and otherwise in accordance with the Accepted Servicing Practices and
the
following provisions of this section. The Seller shall not be entitled to a
servicing fee in connection with the servicing of any Mortgage Loan
hereunder.
In
servicing the Mortgage Loans, the Seller shall comply with all applicable laws,
rules and regulations with respect thereto. The Seller shall take no action
with
respect to any Mortgage Loan, including entering into any litigation, or any
agreement with the related Mortgagor, without the prior written consent of
the
Purchaser. The Seller shall promptly notify the Purchaser in writing of any
action which should be taken with respect to any Mortgage Loan in accordance
with Accepted Servicing Practices. The Seller shall take no action, and shall
not refrain from taking action, which, in either case, (a) would impair the
ability of the Purchaser to realize on or enforce the Mortgage Note or the
lien
of the Mortgage or any other document related thereto or (b) would
jeopardize the rights or remedies available to the Purchaser with respect to
any
Mortgage Loan or otherwise impair the ability of the Purchaser to realize on
the
Mortgaged Property with respect to such Mortgage Loan.
The
Seller shall be obligated to make all advances on the Mortgage Loans with
respect to taxes and insurance premiums due and owing (the “T&I
Servicing Advances”).
Any
other servicing advances in excess of $500 shall be made with the prior written
consent of the Purchaser. The Seller shall be required to notify the Purchaser
in writing of all advances in excess of $500 required to be made in order to
further protect and preserve the Purchaser’s interest in the Mortgage Loans and
the underlying Mortgaged Property (the “Other
Servicing Advances,”
together with the T&I Servicing Advances, the “Servicing
Advances”),
and
shall make such Other Servicing Advances in a timely fashion unless otherwise
instructed by the Purchaser. The Seller shall be entitled to reimbursement
for
all Servicing Advances from the Purchaser within 15 Business Days following
the
Transfer Date.
The
Seller shall segregate and hold all funds collected and received pursuant to
the
Mortgage Loans, including Escrow Payments, separate and apart from any of their
own funds and general assets in one or more Eligible Accounts.
The
Seller shall remit to the Purchaser on each Remittance Date all amounts received
from any source with respect to the Mortgage Loans. On or prior to each
Remittance Date the Seller shall deliver to the Purchaser a remittance advice
in
electronic format acceptable to the Purchaser as to the accompanying remittance
and the period ending on the related Determination Date and shall additionally
specify the number of days which each Mortgage Loan is delinquent, and shall
contain an explanation of all Servicing Advances made, the status of all
Mortgage Loans in foreclosure or otherwise the subject of litigation, and the
status of all other collection efforts with respect to each Mortgage Loan.
-17-
SECTION
8. Transfer
of Servicing.
On
the
applicable Transfer Date, the Purchaser, or its designee, shall assume all
servicing responsibilities related to, and the Seller shall cease all servicing
responsibilities related to, the related Mortgage Loans subject to such Transfer
Date. The Transfer Date shall be the date determined in accordance with
Section 7 herein.
On
or
prior to the applicable Transfer Date, the Seller shall, at its sole cost and
expense, take such steps as may be necessary or appropriate to effectuate and
evidence the transfer of the servicing of the related Mortgage Loans to the
Purchaser, or its designee, including but not limited to the
following:
(a) Notice
to Mortgagors.
The
Seller shall mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall provide the Purchaser with copies of all such related notices no later
than the Transfer Date.
(b) Notice
to Insurance Companies.
The
Seller shall transmit to the applicable insurance companies (including primary
mortgage insurance policy insurers, if applicable) and/or agents, notification
of the transfer of the servicing to the Purchaser, or its designee, and
instructions to deliver all notices, tax bills and insurance statements, as
the
case may be, to the Purchaser from and after the Transfer Date. The Seller
shall
provide the Purchaser with copies of all such notices no later than the Transfer
Date.
(c) Delivery
of Servicing Records.
The
Seller shall forward to the Purchaser, or its designee, all servicing records
and the Servicing File in the Seller’s possession relating to each related
Mortgage Loan.
(d) Escrow
Payments.
The
Seller shall provide the Purchaser, or its designee, with immediately available
funds by wire transfer in the amount of the net Escrow Payments and suspense
balances and all loss draft balances associated with the related Mortgage Loans.
The Seller shall provide the Purchaser with an accounting statement, in
electronic format acceptable to the Purchaser in its sole discretion, of Escrow
Payments and suspense balances and loss draft balances sufficient to enable
the
Purchaser to reconcile the amount of such payment with the accounts of the
Mortgage Loans. Additionally, the Seller shall wire transfer to the Purchaser
the amount of any agency, trustee or prepaid Mortgage Loan payments and all
other similar amounts held by the Seller.
(e) Payoffs
and Assumptions.
The
Seller shall provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Seller on the related Mortgage Loans
from
the related Cut-off Date to the Transfer Date.
(f) Mortgage
Payments Received Prior to Transfer Date.
Prior
to the Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
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(g) Mortgage
Payments Received after Transfer Date.
The
amount of any related Monthly Payments received by the Sellers after the
Transfer Date shall be forwarded to the Purchaser by overnight mail on the
Business Day following the date of receipt. The Seller shall notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller forwards with their payment sufficient
information to permit appropriate processing of the payment by the Purchaser.
The Seller shall assume full responsibility for the necessary and appropriate
legal application of such Monthly Payments received by the Seller after the
Transfer Date with respect to related Mortgage Loans then in foreclosure or
bankruptcy; provided, for purposes of this Agreement, necessary and appropriate
legal application of such Monthly Payments shall include, but not be limited
to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the
Seller after the Transfer Date.
(h) Misapplied
Payments.
Misapplied payments shall be processed as follows:
(i) All
parties shall cooperate in correcting misapplication errors;
(ii) The
party
receiving notice of a misapplied payment occurring prior to the applicable
Transfer Date and discovered after the Transfer Date shall immediately notify
the other party;
(iii) If
a
misapplied payment which occurred prior to the Transfer Date cannot be
identified and said misapplied payment has resulted in a shortage, the Seller
shall be liable for the amount of such shortage. The Seller shall reimburse
the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If
a
misapplied payment which occurred prior to the Transfer Date has created an
improper Purchase Price as the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by the improper payment
application within seven (7) Business Days after notice thereof by the
other party; and
(v) Any
check
issued under the provisions of this Section 8(h) shall be accompanied by a
statement indicating the corresponding Seller and/or the Purchaser Mortgage
Loan
identification number and an explanation of the allocation of any such
payments.
(i) Books
and Records.
On the
Transfer Date, the books, records and accounts of the Seller with respect to
the
related Mortgage Loans shall be in accordance with all applicable Purchaser
requirements.
(j) Reconciliation.
The
Seller shall, on or before the Transfer Date, reconcile principal balances
and
make any monetary adjustments required by the Purchaser. Any such monetary
adjustments will be transferred between the Seller and the Purchaser as
appropriate.
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(k) IRS
Forms.
The
Seller shall file all IRS forms 1099, 1099A, 1098 or 1041 and K-1 which are
required to be filed on or before the Transfer Date in relation to the servicing
and ownership of the related Mortgage Loans. The Seller shall provide copies
of
such forms to the Purchaser upon request and shall reimburse the Purchaser
for
any costs or penalties incurred by the Purchaser due to either Seller’s failure
to comply with this paragraph.
SECTION
9. Representations,
Warranties and Covenants of the Seller; Remedies for Breach.
Subsection
9.01 Representations
and Warranties Regarding the Seller.
The
Seller represents, warrants and covenants to the Purchaser that as of the date
hereof and as of each Closing Date:
(a) Due
Organization and Authority.
The
Seller is a Delaware corporation, validly existing, and in good standing under
the laws of its jurisdiction of incorporation. The Seller has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in the states where the 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 Seller. The Seller has power
and
authority to execute and deliver this Agreement and to perform its obligations
hereunder; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by
the
Seller and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly executed and delivered
and constitutes the valid, legal, binding and enforceable obligation of the
Seller, except as enforceability may be limited by (i) bankruptcy,
insolvency, liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of creditors and
(ii) general principles of equity, whether enforcement is sought in a
proceeding in equity or at law. All requisite action has been taken by the
Seller to make this Agreement valid and binding upon the Seller in accordance
with its terms;
(b) No
Consent Required.
No
consent, approval, authorization or order is required for the transactions
contemplated by this Agreement from any court, governmental agency or body,
or
federal or state regulatory authority having jurisdiction over the Seller is
required or, if required, such consent, approval, authorization or order has
been or will, prior to the related Closing Date, be obtained;
(c) Ordinary
Course of Business.
The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(d) No
Conflicts.
Neither
the execution and delivery of this Agreement, the acquisition or origination
of
the Mortgage Loans by the Seller, the sale of the Mortgage Loans to the
Purchaser, the consummation of 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 Seller’s charter, by-laws or other organizational documents or
any legal restriction or any agreement or instrument to which the Seller 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 Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
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(e) No
Litigation Pending.
There
is no action, suit, proceeding or investigation pending or threatened against
the Seller, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any
of
the transactions contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material adverse change in
the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry
on
its business substantially as now conducted, or in any material liability on
the
part of the Seller, 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 Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Ability
to Perform; Solvency.
The
Seller 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
Seller is solvent and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not undertaken with
the
intent to hinder, delay or defraud any of Seller’s creditors;
(g) Seller’s
Origination.
The
Seller’s decision to originate any mortgage loan or to deny any mortgage loan
application is an independent decision based upon the 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;
(h) Anti-Money
Laundering Laws.
The
Seller has complied with all applicable anti-money laundering laws, regulations
and executive orders, including without limitation the USA Patriot Act of 2001
(collectively, the “Anti-Money
Laundering Laws”);
the
Seller has established an anti-money laundering compliance program as required
by the Anti-Money Laundering Laws, has conducted (or the originator of the
Mortgage Loan has conducted) the requisite due diligence in connection with
the
origination of each Mortgage Loan required by the Anti-Money Laundering Laws,
and has obtained and will maintain information identifying the applicable
Mortgagor as required by the Anti-Money Laundering Laws. Additionally, no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224
(the
“Executive
Order”)
or the
regulations promulgated by the Office of Foreign Assets Control of the United
States Department of Treasury (the “OFAC
Regulations”)
or in
violation of the Executive Order or the OFAC Regulations; and no Mortgagor
is
subject to the provisions of such Executive Order or the OFAC Regulations nor
listed as a “blocked person” for purposes of the OFAC Regulations;
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(i) Financial
Statements.
The
Seller has delivered to the Purchaser financial statements as to its last three
complete fiscal years and any later quarter ended more than 60 days prior to
the
execution of this Agreement. All such financial statements fairly present the
pertinent results of operations and changes in financial position for each
of
such periods and the financial position at the end of each such period of the
Seller and its subsidiaries and have been prepared in accordance with generally
accepted accounting principles of the United States consistently applied
throughout the periods involved, except as set forth in the notes thereto.
There
has been no change in the business, operations, financial condition, properties
or assets of the Seller since the date of the Seller’s financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement. The Seller has completed any forms reasonably requested
by
the Purchaser in a timely manner and in accordance with the provided
instructions;
(j) Selection
Process.
The
Mortgage Loans were selected from among the outstanding one- to four-family
mortgage loans in the Seller’s portfolio at the related Closing Date as to which
the representations and warranties set forth in Subsection 9.02
could be
made and such selection was not made in a manner so as to affect adversely
the
interests of the Purchaser;
(k) Delivery
to the Custodian.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered with respect to each Mortgage Loan pursuant to the
Custodial Agreement, shall be delivered to the Custodian all in compliance
with
the specific requirements of the Custodial Agreement. With respect to each
Mortgage Loan, the Seller will be in possession of a complete Mortgage File
in
compliance with Exhibit A
hereto,
except for such documents as will be delivered to the Custodian;
(l) Mortgage
Loan Characteristics.
The
characteristics of the related Mortgage Loan Package are as set forth on the
description of the pool characteristics for the applicable Mortgage Loan Package
delivered pursuant to Section 11
on the
related Closing Date in the form attached as Exhibit B
to each
related Assignment and Conveyance Agreement;
(m) No
Untrue Information.
Neither
this Agreement nor any information, statement, tape, diskette, report, form,
or
other document furnished or to be furnished by or on behalf of the Seller
pursuant to this Agreement or any Reconstitution Agreement or in connection
with
the transactions contemplated hereby (including any Securitization Transaction
or Whole Loan Transfer) contains or (up to the applicable Transfer Date) will
contain any untrue statement of fact or omits or will omit to state a fact
necessary to make the statements contained herein or therein not
misleading;
(n) No
Brokers.
The
Seller has not dealt with any broker, investment banker, agent or other person
that may be entitled to any commission or compensation in connection with the
sale of the Mortgage Loans;
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(o) Sale
Treatment.
The
Seller expects to be advised by its independent certified public accountants
that under generally accepted accounting principles the transfer of the Mortgage
Loans will be treated as a sale on the books and records of the Seller and
the
Seller has determined that the disposition of the Mortgage Loans to the
Purchaser pursuant to this Agreement will be afforded sale treatment for tax
and
accounting purposes;
(p) Owner
of Record.
The
Seller is the owner of record of each Mortgage and the indebtedness evidenced
by
each Mortgage Note, except for the Assignments of Mortgage which have been
sent
for recording, and upon recordation the Seller will be the owner of record
of
each Mortgage and the indebtedness evidenced by each Mortgage Note, and upon
the
sale of the Mortgage Loans to the Purchaser, the Seller will retain the Mortgage
Files with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan; and
(q) Reasonable
Purchase Price.
The
consideration received by the Seller upon the sale of the Mortgage Loans under
this Agreement constitutes fair consideration and reasonably equivalent value
for the Mortgage Loans.
Subsection
9.02 Representations
and Warranties Regarding Individual Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage
Loans as Described.
The
information set forth in the related Mortgage Loan Schedule is complete, true
and correct;
(b) Payments
Current.
All
payments required to be made up to the related Closing Date for the Mortgage
Loan under the terms of the Mortgage Note, other than payments not yet 30 days
delinquent, have been made and credited. No payment required under the Mortgage
Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the
Mortgage Loan. The first Monthly Payment shall be made with respect to the
Mortgage Loan on its related Due Date or within thirty (30) days thereafter,
all
in accordance with the terms of the related Mortgage Note;
(c) No
Outstanding Charges.
There
are no defaults in complying with the terms of the Mortgage, and all taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents which previously became due and
owing have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not advanced funds,
or
induced, solicited or knowingly received any advance of funds by a party other
than the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the date
of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the related Due
Date of the first installment of principal and interest;
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(d) Original
Terms Unmodified.
The
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination except by a written
instrument which has been recorded, if necessary to protect the interests of
the
Purchaser, and which has been delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing, and the terms of which are
reflected in the related Mortgage Loan Schedule. The substance of any such
waiver, alteration or modification has been approved by the title insurer,
if
any, to the extent required by the policy, and its terms are reflected on the
related Mortgage Loan Schedule, if applicable. No Mortgagor has been released,
in whole or in part, except in connection with an assumption agreement, approved
by the issuer of the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No
Defenses.
The
Mortgage Loan is not subject to any right of rescission, set-off, counterclaim
or defense, including without limitation the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or the Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect
thereto;
(f) Hazard
Insurance.
Pursuant to the terms of the Mortgage, all buildings or other improvements
upon
the Mortgaged Property are insured by a generally acceptable insurer against
loss by fire, hazards of extended coverage and such other hazards as are
provided for in the Xxxxxx Xxx Guides or by Xxxxxxx Mac or those of prudent
mortgage lenders who originate mortgage loans similar to the Mortgage Loans
in
the jurisdiction where the related Mortgaged Property is located. If required
by
the National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration as in effect which policy
conforms to Xxxxxx Xxx and Xxxxxxx Mac requirements or those of prudent mortgage
lenders who originate mortgage loans similar to the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located. All individual
insurance policies contain a standard mortgagee clause naming the Seller and
its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor’s cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has
been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a “master”
or
“blanket”
hazard
insurance policy covering a condominium, or any hazard insurance policy covering
the common facilities of a planned unit development. The hazard insurance policy
is the valid and binding obligation of the insurer, is in full force and effect,
and will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement.
Neither the Seller nor the related Mortgagor has engaged in any act or omission
which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the
Seller;
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(g) Compliance
with Applicable Laws.
Any and
all requirements of any federal, state or local law including, without
limitation, usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure and all predatory,
abusive and fair lending laws applicable to the Mortgage Loan, including,
without limitation, any provisions relating to the Illinois Interest Act and
Prepayment Penalties, have been complied with, the consummation of the
transactions contemplated hereby will not involve the violation of any such
laws
or regulations, and the Seller shall maintain in its possession, available
for
the Purchaser’s inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material and Adverse
Representation;
(h) No
Satisfaction of Mortgage.
The
Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor’s failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action
or
inaction by the Mortgagor;
(i) Type
of Mortgaged Property.
The
Mortgaged Property is a fee simple estate, or a leasehold estate located in
a
jurisdiction in which the use of a leasehold estate for residential properties
is a widely-accepted practice, that consists of a single parcel of real property
with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual residential condominium unit in a
condominium project, or an individual unit in a planned unit development, or
an
individual unit in a residential cooperative housing corporation; provided,
however, that any condominium unit, planned unit development or residential
cooperative housing corporation shall conform with the Underwriting Guidelines.
No portion of the Mortgaged Property is used for commercial purposes, and since
the date of origination, no portion of the Mortgaged Property has been used
for
commercial purposes; provided, that Mortgaged Properties which contain a home
office shall not be considered as being used for commercial purposes as long
as
the Mortgaged Property has not been altered for commercial purposes and is
not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. None of the Mortgaged
Properties are Manufactured Homes, log homes, mobile homes, geodesic domes
or
other unique property types;
(j) Valid
First or Second Lien.
The
Mortgage is a valid, subsisting, enforceable, except only as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors’ rights generally and by
general principles of equity (whether considered in a proceeding or action
in
equity or at law) and perfected, first lien (with respect to a First Lien Loan)
or second lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of
the
Mortgage is subject only to:
-25-
(A) with
respect to a Second Lien Loan only, the lien of the first mortgage on the
Mortgaged Property;
(B) the
lien
of current real property taxes and assessments not yet due and
payable;
(C) covenants,
conditions and restrictions, rights of way, easements and other matters of
the
public record as of the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the lender’s title
insurance policy delivered to the originator of the Mortgage Loan and
(A) specifically referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan or (B) which do not adversely
affect the Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(D) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of the related Mortgaged
Property.
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action in equity
or
at law), and perfected first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) and first priority (with respect
to a
First Lien Loan) or second priority (with respect to a Second Lien Loan)
security interest on the property described therein and the Seller has full
right to sell and assign the same to the Purchaser;
(k) Validity
of Mortgage Documents.
The
Mortgage Note and the Mortgage and any other agreement executed and delivered
by
a Mortgagor in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms (including, without limitation, any provisions therein
relating to Prepayment Penalties) except only as such enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action in equity
or
at law). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement,
and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect
to a
Mortgage Loan has taken place on the part of the Seller in connection with
the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place
on the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
-26-
(l) Full
Disbursement of Proceeds.
The
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder,
and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan
and
the recording of the Mortgage were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or Mortgage other
than any amounts placed in a tax or insurance escrow account pursuant to the
Mortgage;
(m) Ownership.
The
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser
or
the Purchaser’s designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is not
assigned or pledged, and the Seller has good, indefeasible and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan to the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
except for any warehouse liens that will be released simultaneously with the
sale of the Mortgage Loan to the Purchaser, and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase
the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing
Business.
All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) either (i) organized under the laws of
such state, or (ii) qualified to do business in such state, or (iii) a
federal savings and loan association, a savings bank or a national bank having
a
principal office in such state, or (3) not doing business in such
state;
(o) LTV.
No
Mortgage Loan has an LTV greater than 100%;
(p) Title
Insurance.
The
Mortgage Loan is covered by an ALTA lender’s title insurance policy, or with
respect to any Mortgage Loan for which the related Mortgaged Property is located
in California a CLTA lender’s title insurance policy, or other generally
acceptable form of policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx
Mac
and each such title insurance policy is issued by a title insurer acceptable
to
Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in the jurisdiction
where
the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second (with
respect to a Second Lien Loan) priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent a Mortgage Note provides
for negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (A), (B) and (C) of paragraph
(j)
of this
Subsection
9.02,
and in
the case of Adjustable Rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of
the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been
given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender’s title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or
any
interest therein. The Seller, its successor and assigns, are the sole insureds
of such lender’s title insurance policy, and such lender’s title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender’s title insurance policy, and no
prior holder of the related Mortgage, including the Seller, has done, by act
or
omission, anything which would impair the coverage of such lender’s title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will
be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
-27-
(q) No
Defaults.
Other
than payments due but not yet 30 days or more delinquent, there is no default,
breach, violation or event which would permit acceleration existing under the
Mortgage or the Mortgage Note and no event which, with the passage of time
or
with notice and the expiration of any grace or cure period, would constitute
a
default, breach, violation or event which would permit acceleration, and neither
the Seller nor any of its affiliates nor any of their respective predecessors,
have waived any default, breach, violation or event which would permit
acceleration;
(r) No
Mechanics’ Liens.
There
are no mechanics’ or similar liens or claims which have been filed for work,
labor or material (and no rights are outstanding that under the law could give
rise to such liens) affecting the related Mortgaged Property which are or may
be
liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(s) Location
of Improvements; No Encroachments.
All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Propert, except for deminimis encroachments
acceptable to a prudent mortgage lender that originates mortgage loans similar
to the Mortgage Loan in the jurisdiction where the Mortgaged Property is located
that will have no adverse affect on the value of the property, provided that
any
such encroaching improvements are stated in the applicable title insurance
policy and affirmatively insured over. No improvement located on or being part
of the Mortgaged Property is in violation of any applicable zoning law or
regulation;
-28-
(t) Origination;
Payment Terms.
The
Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, a savings and loan association, a savings bank, a commercial bank,
credit union, insurance company or other similar institution which is supervised
and examined by a federal or state authority. Principal payments on the Mortgage
Loan commenced no more than seventy days after funds were disbursed in
connection with the Mortgage Loan. The Mortgage Interest Rate as well as, in
the
case of an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic
Cap are as set forth on the related Mortgage Loan Schedule. Unless specified
on
the related Mortgage Loan Schedule as an interest-only loan or a Balloon
Mortgage Loan, the Mortgage Note is payable in equal monthly installments of
principal (except for Mortgage Loans that provide for a fixed period of
interest-only payments at the beginning of their term) and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date,
over
an original term of not more than thirty (30) years from commencement of
amortization. With respect to any Mortgage Loan that provides for a fixed period
of interest-only payments at the beginning of its term, at the end of such
interest-only period, the Monthly Payment will be recalculated so as to require
Monthly Payments sufficient to amortize the Mortgage Loan fully by its stated
maturity date. Unless otherwise specified on the related Mortgage Loan Schedule,
the Mortgage Loan is payable on the first day of each month. The Mortgage Loan,
by its original terms or any modification thereof, does not provide for
amortization beyond its scheduled maturity date. Unless otherwise specified
on
the related Mortgage Loan Schedule, the Mortgage Loan does not require a balloon
payment on its stated maturity date;
(u) Customary
Provisions.
The
Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by
a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee’s sale or the right to foreclose the Mortgage, subject to applicable
federal and state laws and judicial precedent with respect to bankruptcy and
right of redemption or similar law;
(v) Conformance
with Agency and Underwriting Guidelines.
The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
(a
copy of which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx
Mae and no representations have been made to a Mortgagor that are inconsistent
with the mortgage instruments used;
-29-
(w) Occupancy
of the Mortgaged Property.
As of
the related Closing Date the Mortgaged Property is lawfully occupied under
applicable law. All inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the Mortgaged Property and,
with respect to the use and occupancy of the same, including but not limited
to
certificates of occupancy and fire underwriting certificates, have been made
or
obtained from the appropriate authorities. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor’s primary residence;
(x) No
Additional Collateral.
The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in paragraph
(j)
above;
(y) Deeds
of Trust.
In the
event the Mortgage constitutes a deed of trust, a trustee, authorized and duly
qualified under applicable law to serve as such, has been properly designated
and currently so serves and is named in the Mortgage, and no fees or expenses
are or will become payable by the Purchaser to the trustee under the deed of
trust, except in connection with a trustee’s sale after default by the
Mortgagor;
(z) Acceptable
Investment.
There
are no circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, the Mortgage File or the Mortgagor’s credit standing
that can reasonably be expected to cause prudent private institutional investors
who invest in mortgage loans similar to the Mortgage Loan to regard the Mortgage
Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage
Loan
in the jurisdiction where the related Mortgaged Property is located, or cause
the Mortgage Loans to prepay during any period materially faster or slower
than
the mortgage loans originated by the Seller generally;
(aa) Delivery
of Mortgage Documents.
The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered under the Custodial Agreement for each Mortgage Loan
have been delivered to the Custodian. The Seller is in possession of a complete,
true and accurate Mortgage File in compliance with Exhibit A
hereto,
except for such documents the originals of which have been delivered to the
Custodian;
(bb) Condominiums/Planned
Unit Developments.
If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with, and
the Mortgaged Property meets the guidelines set forth in the Originator’s
Underwriting Guidelines;
(cc) Transfer
of Mortgage Loans.
The
Assignment of Mortgage with respect to each Mortgage Loan (except with respect
to any Mortgage that has been recorded in the name of MERS or its designee)
is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located. The transfer,
assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller
are not subject to the bulk transfer or similar statutory provisions in effect
in any applicable jurisdiction;
-30-
(dd) Due-On-Sale.
With
respect to each Fixed Rate Mortgage Loan, the Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance
of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
and
such provision is enforceable;
(ee) Assumability.
With
respect to each Adjustable Rate Mortgage Loan, the Mortgage Loan Documents
provide that after the related first Interest Rate Adjustment Date, a related
Mortgage Loan may only be assumed if the party assuming such Mortgage Loan
meets
certain credit requirements stated in the Mortgage Loan Documents;
(ff) No
Buydown Provisions; No Graduated Payments or Contingent
Interests.
The
Mortgage Loan does not contain provisions pursuant to which Monthly Payments
are
paid or partially paid with funds deposited in any separate account established
by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid
by
any source other than the Mortgagor nor does it contain any other similar
provisions which may constitute a “buydown” provision. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(gg) Consolidation
of Future Advances.
Any
future advances made to the Mortgagor prior to the applicable Cut-off Date
have
been consolidated with the outstanding principal amount secured by the Mortgage,
and the secured principal amount, as consolidated, bears a single interest
rate
and single repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first (with respect to a First
Lien Loan) or second (with respect to a Second Lien Loan) lien priority by
a
title insurance policy, an endorsement to the policy insuring the mortgagee’s
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged
Property Undamaged; No Condemnation Proceedings.
There
is no proceeding pending or threatened for the total or partial condemnation
of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so
as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended and each Mortgaged
Property is in good repair. There have not been any condemnation proceedings
with respect to the Mortgaged Property;
(ii) Collection
Practices; Escrow Deposits; Interest Rate Adjustments.
The
origination, servicing and collection practices used by the Seller with respect
to the Mortgage Loan have been in all respects in compliance with Accepted
Servicing Practices, applicable laws and regulations, and have been in all
respects legal and proper. With respect to escrow deposits and Escrow Payments,
all such payments are in the possession of, or under the control of, the Seller
and there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments
have
been collected in full compliance with state and federal law and the provisions
of the related Mortgage Note and Mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item that remains unpaid and has been assessed but is not yet due and
payable. No escrow deposits or Escrow Payments or other charges or payments
due
the Seller have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage and Mortgage Note
on
the related Interest Rate Adjustment Date. If, pursuant to the terms of the
Mortgage Note, another index was selected for determining the Mortgage Interest
Rate, the same index was used with respect to each Mortgage Note which required
a new index to be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Seller executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage
Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
-31-
(jj) Conversion
to Fixed Interest Rate.
The
Mortgage Loan does not contain a provision whereby the Mortgagor is permitted
to
convert the Mortgage Interest Rate from and adjustable rate to a fixed
rate;
(kk) Other
Insurance Policies; No Defense to Coverage.
No
action, inaction or event has occurred and no state of facts exists or has
existed on or prior to the Closing Date that has resulted or will result in
the
exclusion from, denial of, or defense to coverage under any applicable hazard
insurance policy, PMI Policy or bankruptcy bond (including, without limitation,
any exclusions, denials or defenses which would limit or reduce the availability
of the timely payment of the full amount of the loss otherwise due thereunder
to
the insured), irrespective of the cause of such failure of coverage. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No
Violation of Environmental Laws.
There
is no pending action or proceeding directly involving the Mortgaged Property
in
which compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with respect
to the Mortgage Property; and nothing further remains to be done to satisfy
in
full all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;
(mm) Servicemembers’
Civil Relief Act.
The
Mortgagor has not notified the Seller, and the Seller has no knowledge of any
relief requested or allowed to the Mortgagor under the Relief Act or other
similar state statute;
(nn) Appraisal.
The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the approval of the Mortgage Loan application by a Qualified Appraiser,
accepted by the Seller, who had no interest, direct or indirect in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation
is
not affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx
Mac and Title XI of the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989 and the regulations promulgated thereunder, all as in effect on
the
date the Mortgage Loan was originated;
-32-
(oo) Disclosure
Materials.
The
Mortgagor has executed a statement to the effect that the Mortgagor has received
all disclosure materials required by, and the Seller has complied with, all
applicable law with respect to the making of the Mortgage Loans. The Seller
shall maintain such statement in the Mortgage File;
(pp) Construction
or Rehabilitation of Mortgaged Property.
No
Mortgage Loan was made in connection with the construction (other than a
“construct-to-perm” loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request
for Notice; No Consent Required.
With
respect to any Second Lien Loan, if applicable to the Seller, where required
or
customary in the jurisdiction in which the Mortgaged Property is located, the
original lender has filed for record a request for notice of any action by
the
related senior lienholder, and the Seller has notified the senior lienholder
in
writing of the existence of the Second Lien Loan and requested notification
of
any action to be taken against the Mortgagor by the senior lienholder. Either
(a) no consent for the Second Lien Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the Mortgage File. This representation and warranty is a Deemed Material
and
Adverse Representation;
(rr) [Reserved];
(ss) Escrow
Analysis.
If
applicable, with respect to each Mortgage, the Seller has within the last twelve
months (unless such Mortgage was originated within such twelve month period)
analyzed the required Escrow Payments for each Mortgage and adjusted the amount
of such payments so that, assuming all required payments are timely made, any
deficiency will be eliminated on or before the first anniversary of such
analysis, or any overage will be refunded to the Mortgagor, in accordance with
RESPA and any other applicable law;
(tt) Prior
Servicing.
Each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices;
(uu) No
Default Under First Lien.
With
respect to each Second Lien Loan, the related First Lien Loan related thereto
is
in full force and effect, and there is no default, breach, violation or event
which would permit acceleration existing under such first Mortgage or Mortgage
Note, and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration thereunder. This
representation and warranty is a Deemed Material and Adverse
Representation;
(vv) Right
to Cure First Lien.
With
respect to each Second Lien Loan, the related first lien Mortgage contains
a
provision which provides for giving notice of default or breach to the mortgagee
under the Mortgage Loan and allows such mortgagee to cure any default under
the
related first lien Mortgage. This representation and warranty is a Deemed
Material and Adverse Representation;
(ww) No
Failure to Cure Default.
The
Seller has not received a written notice of default of any senior mortgage
loan
related to the Mortgaged Property which has not been cured;
-33-
(xx) Credit
Information.
As to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective purchaser
of
such Mortgage;
(yy) Leaseholds.
If the
Mortgage Loan is secured by a leasehold estate, (1) the ground lease is
assignable or transferable; (2) the ground lease will not terminate earlier
than five years after the maturity date of the Mortgage Loan; (3) the
ground lease does not provide for termination of the lease in the event of
lessee’s default without the mortgagee being entitled to receive written notice
of, and a reasonable opportunity to cure the default; (4) the ground lease
permits the mortgaging of the related Mortgaged Property; (5) the ground
lease protects the mortgagee’s interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates
for residential properties is a widely accepted practice in the jurisdiction
in
which the Mortgaged Property is located;
(zz) Prepayment
Penalty.
Each
Mortgage Loan that is subject to a Prepayment
Penalty
as
provided in the related Mortgage Note is identified on the related Mortgage
Loan
Schedule. With respect to each Mortgage Loan that has a Prepayment
Penalty
feature,
each such Prepayment
Penalty
is
enforceable and will be enforced by the Seller for the benefit of the Purchaser,
and each Prepayment
Penalty
is
permitted pursuant to applicable federal, state and local law. Each such
Prepayment
Penalty
is in an
amount not more than the maximum amount permitted under applicable law and
no
such Prepayment
Penalty
may be
imposed for a term in excess of five (5) years with respect to Mortgage Loans
originated prior to October, 1, 2002. With respect to Mortgage Loans originated
on or after October 1, 2002, the duration of the Prepayment
Penalty
period
shall not exceed three (3) years from the date of the Mortgage Note (except
as
set forth on the related Mortgage Loan Schedule) unless the Mortgage Loan was
modified to reduce the Prepayment
Penalty
period
to no more than three (3) years from the date of the related Mortgage Note
and
the Mortgagor was notified in writing of such reduction in Prepayment
Penalty
period.
This representation and warranty is a Deemed Material and Adverse
Representation;
(aaa) Predatory
Lending Regulations.
No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and no
Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act. No Mortgage Loan is covered
by
the Home Ownership and Equity Protection Act of 1994 and no Mortgage Loan is
in
violation of any comparable state or local law. This representation and warranty
is a Deemed Material and Adverse Representation;
(bbb) Flood
Service Contract.
Each
Mortgage Loan is covered by a paid in full, life of loan, flood service contract
issued by either First American Flood Data Services or Fidelity, and such
contract is transferable. If no such flood service contract is in place, or
if
such flood service contract is issued by an insurer other than First American
Flood Data Services or Fidelity, then on the related Closing Date, the Seller
shall remit to the Purchaser a placement fee of ten dollars ($10.00) for each
such Mortgage Loan;
-34-
(ccc) Qualified
Mortgage.
The
Mortgage Loan is a “qualified mortgage” under Section 860G(a)(3) of the
Code;
(ddd) Tax
Service Contract.
Either
(x) each Mortgage Loan is covered by a paid in full, life of loan, tax service
contract, and such contract is transferable, or (y) on the related Closing
Date
the Purchaser shall net $72.00 per Mortgage Loan from the related Purchase
Price
to cover the cost of such a tax service contract;
(eee) Origination.
No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay
and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
(fff) Recordation.
Each
original Mortgage was recorded, or has been sent for recording, and all
subsequent assignments of the original Mortgage (other than the assignment
to
the Purchaser) have been recorded in the appropriate jurisdictions wherein
such
recordation is necessary to perfect the lien thereof as against creditors of
the
Seller, or is in the process of being recorded;
(ggg) Mortgagor
Bankruptcy.
On or
prior to the related Closing Date, the Mortgagor has not filed and will not
file
a bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or will
not consent to the filing of a bankruptcy proceeding against it or to a receiver
being appointed in respect of the related Mortgaged Property;
(hhh) No
Prior Offer.
The
Mortgage Loan has not previously been offered for sale to and been rejected
by
another investor for material reasons of credit compliance or
valuation;
(iii) Balloon
Mortgage Loans.
No
Balloon Mortgage Loan has an original stated maturity of less than seven (7)
years;
(jjj) Mortgagor
Selection.
The
Mortgagor was not encouraged or required to select a Mortgage Loan product
offered by the Seller which is a higher cost product designed for less
creditworthy mortgagors, unless at the time of the Mortgage Loan’s origination,
such Mortgagor did not qualify taking into account such facts as, without
limitation, the Mortgage Loan’s requirements and the Mortgagor’s credit history,
income, assets and liabilities and debt-to-income ratios for a lower-cost
similar credit product then offered by the Seller. This representation and
warranty is a Deemed Material and Adverse Representation;
(kkk) Underwriting
Methodology.
The
methodology used in underwriting the extension of credit for each Mortgage
Loan
does not rely solely on the extent of the related Mortgagor’s equity in the
collateral as the principal determining factor in approving such extension
of
credit. The methodology employed objective criteria such
as the
Mortgagor’s income,
assets and
liabilities, to the proposed mortgage payment and, based on such methodology,
the Mortgage Loan’s originator made a reasonable determination that at the time
of origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the time of
origination (application/approval) the related Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
-35-
(lll) Mortgage
Loans with Prepayment Premiums.
With
respect to any Mortgage Loan that contains a provision permitting imposition
of
a Prepayment Penalty upon a prepayment prior to maturity: (i) the Mortgage
Loan
provides some benefit to the Mortgagor (e.g.,
a rate
or fee reduction) in exchange for accepting such Prepayment Penalty, (ii) prior
to the Mortgage Loan’s origination, the Mortgagor was informed of the option of
obtaining a mortgage loan that did not require payment of such a penalty as
required by applicable state or federal law, (iii) the Prepayment Penalty was
adequately disclosed to the Mortgagor in the mortgage loan documents pursuant
to
applicable state, local and federal law, and (iv) notwithstanding any state,
local or federal law to the contrary, the Originator, as servicer, shall not
impose such Prepayment Penalty in any instance when the mortgage debt is (x)
accelerated as a result of the Mortgagor’s default in making the Mortgage Loan
payments or (y) paid off in connection with the workout of a delinquent Mortgage
Loan. This representation and warranty is a Deemed Material and Adverse
Representation;
(mmm) Purchase
of Insurance.
No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g., life, mortgage, disability, property, accident, unemployment or health
insurance product) or debt cancellation agreement as a condition of obtaining
the extension of credit. No Mortgagor obtained a prepaid single premium credit
insurance policy (e.g., life, mortgage, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the origination
of the Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase
single premium credit insurance policies as part of the origination of, or
as a
condition to closing, such Mortgage Loan. This representation and warranty
is a
Deemed Material and Adverse Representation;
(nnn) [Reserved];
(ooo) Disclosure
of Fees and Charges.
All
fees and charges (including finance charges), whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Mortgage Loan, have been disclosed in writing to the Mortgagor
in
accordance with applicable state and federal law and regulation. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ppp) No
Arbitration.
No
Mortgage Loan originated on or after July 1, 2004 requires the related
Mortgagor to submit to arbitration to resolve any dispute arising out of or
relating in any way to the Mortgage Loan transaction. This representation and
warranty is a Deemed Material and Adverse Representation;
(qqq) No
Negative Amortization of Related First Lien Loan.
With
respect to each Second Lien Loan, the related First Lien Loan does not permit
negative amortization. This representation and warranty is a Deemed Material
and
Adverse Representation; and
(rrr) Principal
Residence.
With
respect to each Second Lien Loan, the related Mortgaged Property is the
Mortgagor’s principal residence. This representation and warranty is a Deemed
Material and Adverse Representation.
-36-
Subsection
9.03 Remedies
for Breach of Representations and Warranties.
It
is
understood and agreed that the representations and warranties set forth in
Subsections 9.01
and
9.02
shall
survive the sale of the Mortgage Loans to the Purchaser and shall inure to
the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination
or
failure to examine any Mortgage File. Upon discovery by either Seller or by
the
Purchaser of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the other;
however, in any event, such notice by Purchaser must be made to the Seller
within sixty (60) days of the Purchaser’s discovery of such breach. In the event
that the Purchaser does not deliver such notice within the sixty (60) day
timeframe then the Purchaser shall forfeit its right to require such Seller
to
repurchase the applicable Mortgage Loan.
Within
60
days of the earlier of either discovery by or notice to the Seller of any such
breach of a representation or warranty, which materially and adversely affects
the value of the Mortgage Loans or the interest of the Purchaser therein (or
which materially and adversely affects the value of the applicable Mortgage
Loan
or the interest of the Purchaser therein in the case of a representation and
warranty relating to a particular Mortgage Loan), such Seller shall use its
best
efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, such Seller shall, at the Purchaser’s option, repurchase
such Mortgage Loan at the Repurchase Price. Notwithstanding the above sentence,
(i) within sixty (60) days after the earlier of either discovery by, or notice
to, the Seller of any breach of the representation and warranty set forth in
clause (ccc) of Subsection
9.02,
such
Seller shall repurchase such Mortgage Loan at the Repurchase Price and (ii)
any
breach of a Deemed Material and Adverse Representation shall automatically
be
deemed to materially and adversely affect the value of the Mortgage Loans or
the
interest of the Purchaser therein. In the event that a breach shall involve
any
representation or warranty set forth in Subsection 9.01,
and
such breach cannot be cured within 60 days of the earlier of either discovery
by
or notice to the Seller of such breach, all of the Mortgage Loans affected
by
such breach shall, at the Purchaser’s option, be repurchased by such Seller at
the Repurchase Price. However, if the breach shall involve a representation
or
warranty set forth in Subsection 9.02
(except
as provided in the second sentence of this paragraph with respect to certain
breaches for which no substitution is permitted) and the Seller discovers or
receives notice of any such breach within 120 days of the related Closing
Date, such Seller shall, at such Seller’s option and provided that such Seller
has a Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage
Loan as provided above, remove such Mortgage Loan (a “Deleted
Mortgage Loan”)
and
substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided
that any such substitution shall be effected not later than 120 days after
the related Closing Date. If such Seller has no Qualified Substitute Mortgage
Loan, it shall repurchase the deficient Mortgage Loan at the Repurchase Price.
Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions
of this Subsection
9.03
shall be
accomplished by direct remittance of the Repurchase Price to the Purchaser
or
its designee in accordance with the Purchaser’s instructions.
At
the
time of repurchase or substitution, the Purchaser and the Seller shall arrange
for the reassignment of the Deleted Mortgage Loan to such Seller and the
Purchaser shall reassign the Mortgage Loan affected and any right it may have
in
the relevant Mortgaged Property to such Seller free and clear of all liens,
encumbrances, claims, or interest of any person or entity claiming by, through,
or under the Purchaser without recourse and shall execute and deliver to such
Seller in recordable form an assignment of the Purchaser’s beneficial interest
in the affected Mortgage, as well as other documents necessary to reflect the
reassignment of any title protection and insurance policies, and the delivery
to
such Seller of any documents held by the Custodian relating to the Deleted
Mortgage Loan. In the event of a repurchase or substitution, the Seller shall,
simultaneously with such reassignment, give written notice to the Purchaser
that
such repurchase or substitution has taken place, amend the Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Seller shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Seller shall effect such substitution by delivering to the
Custodian or to such other party as the Purchaser may designate in writing
for
such Qualified Substitute Mortgage Loan the documents required by Subsection 6.03
and the
Custodial Agreement, with the Mortgage Note endorsed as required by Subsection 6.03
and the
Custodial Agreement. No substitution will be made in any calendar month after
the Determination Date for such month. The Seller shall remit directly to the
Purchaser, or its designee in accordance with the Purchaser’s instructions the
Monthly Payment due, if any, on such Qualified Substitute Mortgage Loan or
Loans
in the month following the date of such substitution. Monthly Payments due
with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Seller. For the month of substitution, distributions
to
the Purchaser shall include the Monthly Payment due on any Deleted Mortgage
Loan
in the month of substitution, and the Seller shall thereafter be entitled to
retain all amounts subsequently received by such Seller in respect of such
Deleted Mortgage Loan.
-37-
For
any
month in which either Seller substitutes a Qualified Substitute Mortgage Loan
for a Deleted Mortgage Loan, such Seller shall determine the amount (if any)
by
which the aggregate principal balance of all Qualified Substitute Mortgage
Loans
as of the date of substitution is less than the aggregate Stated Principal
Balance of all Deleted Mortgage Loans (after application of scheduled principal
payments due in the month of substitution). The amount of such shortfall shall
be distributed by the Seller directly to the Purchaser or its designee in
accordance with the Purchaser’s instructions within two (2) Business Days of
such substitution.
As
to
each Mortgage Loan, on and after the date servicing is transferred from the
Seller to the Purchaser and until such time as the servicing for such Mortgage
Loan in reassigned to Sellers, the Purchaser or its designee shall service
such
Mortgage Loan in conformance and accordance with the servicing practices that
Purchaser or its designee would follow in servicing residential mortgage loans
held for its own account, giving due consideration to those mortgage servicing
practices of prudent mortgage lending institutions that service mortgage loans
of the same type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and its present and former directors, officers,
employees and agents and any Successor Servicer and its present and former
directors, officers, employees and agents and hold such parties harmless against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from,
a
breach of the Seller’s representations and warranties contained in this
Agreement or any Reconstitution Agreement. It is understood and agreed that
the
obligations of the Seller set forth in this Subsection 9.03 to cure,
substitute for or repurchase a defective Mortgage Loan and to indemnify the
Purchaser and Successor Servicer as provided in this Subsection 9.03
and in
Subsection
14.01
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. For purposes of this paragraph
“Purchaser” shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were “Purchasers” under this
Agreement and “Successor Servicer” shall mean any Person designated as the
Successor Servicer pursuant to this Agreement and any and all Persons who
previously were “Successor Servicers” pursuant to this Agreement.
-38-
Any
cause
of action against either Seller relating to or arising out of the breach of
any
representations and warranties made in Subsections
9.01
and
9.02
shall
accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by either Seller to the Purchaser, (ii) failure
by the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance
with this Agreement.
Notwithstanding
the above, in no event shall the indemnifying party be liable to the indemnified
party for any punitive, special, incidental, indirect or consequential damages,
including but not limited to, lost profits.
Subsection
9.04 Repurchase
of Mortgage Loans with First Payment Defaults.
With
respect to any Mortgage Loan, in the event that the first scheduled payment
of
principal and interest due either (i) after origination of such Mortgage
Loan is not paid by the related Mortgagor to the then current mortgagee, or
(ii) after the related Closing Date is not paid by the related Mortgagor to
the Purchaser within thirty (30) days of such related Due Date, the Seller,
at
the Purchaser’s option, shall repurchase such Mortgage Loan from the Purchaser
at a price equal to the related Purchase Price Percentage multiplied by the
then
outstanding principal balance of such Mortgage Loan, plus accrued and unpaid
interest thereon from the date to which interest was last paid through the
day
prior to the repurchase date at the applicable Mortgage Interest Rate, plus
any
outstanding advances owed to any servicer in connection with such Mortgage
Loan.
The Purchaser shall have ninety (90) days following such thirty (30) day period
to notify the Seller and request a repurchase and the Seller shall repurchase
such delinquent Mortgage Loan within thirty (30) days of receipt of such notice.
Notwithstanding the foregoing, the Purchaser reserves the right to request
a
repurchase following such ninety (90) day timeframe in the event of a NSF return
of the related first payment.
Subsection
9.05 Premium
Recapture.
With
respect to any Mortgage Loan without prepayment penalties that prepays in full
during the first six months following the related Closing Date, the Seller
shall
pay the Purchaser, within seven (7) Business Days after Purchaser notifies
such
Seller in writing (with backup documentation) of such prepayment, such
prepayment in full, an amount equal to the excess of the Purchase Price
Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off
Date.
-39-
SECTION
10. Closing.
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the related Closing Date. At the Purchaser’s option, each Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree,
or
conducted in person, at such place as the parties shall agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
(i) at
least
two Business Days prior to the related Closing Date, the Seller shall deliver
to
the Purchaser a magnetic diskette, or transmit by modem, a listing on a
loan-level basis of the necessary information to compute the Purchase Price
of
the Mortgage Loans delivered on such Closing Date (including accrued interest),
and prepare a Mortgage Loan Schedule;
(ii) all
of
the representations and warranties of the Seller under this Agreement shall
be
true and correct as of the related Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this
Agreement;
(iii) the
Purchaser shall have received, or the Purchaser’s attorneys shall have received
in escrow, all closing documents as specified in Section 11
of this
Agreement, in such forms as are agreed upon and acceptable to the Purchaser,
duly executed by all signatories other than the Purchaser as required pursuant
to the terms hereof;
(iv) the
Seller shall have delivered and released to the Custodian all documents required
pursuant to the Custodial Agreement; and
(v) all
other
terms and conditions of this Agreement and the related Purchase Price and Terms
Agreement shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4
of this
Agreement, by wire transfer of immediately available funds to the account
designated by the Seller.
SECTION
11. Closing
Documents.
The
Closing Documents for the Mortgage Loans to be purchased on each Closing Date
shall consist of fully executed originals of the following
documents:
(1) this
Agreement (to be executed and delivered only for the initial Closing
Date);
-40-
(2) with
respect to the initial Closing Date, the Custodial Agreement, dated as of the
initial Cut-off Date;
(3) the
related Mortgage Loan Schedule (one copy to be attached to the Custodian’s
counterpart of the Custodial Agreement in connection with the initial Closing
Date, and one copy to be attached to the related Assignment and Conveyance
as
the Mortgage Loan Schedule thereto);
(4) a
Custodian’s Certification, as required under the Custodial Agreement, in the
form of Exhibit 2 to the Custodial Agreement;
(5) with
respect to the initial Closing Date, an Officer’s Certificate, in the form of
Exhibit C
hereto
with respect to the Seller, including all attachments thereto; with respect
to
subsequent Closing Dates, an Officer’s Certificate upon request of the
Purchaser;
(6) with
respect to the initial Closing Date, an Opinion of Counsel of the Custodian
(who
may be an employee of the Custodian), in the form of an exhibit to the Custodial
Agreement(s);
(7) a
Security Release Certification, in the form of Exhibit E
or
F,
as
applicable, hereto executed by any person, as requested by the Purchaser, if
any
of the Mortgage Loans have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
(8) a
certificate or other evidence of merger or change of name, signed or stamped
by
the applicable regulatory authority, if any of the Mortgage Loans were acquired
by either Seller by merger or acquired or originated by either Seller while
conducting business under a name other than its present name, if
applicable;
(9) Assignment
and Conveyance Agreement in the form of Exhibit G
hereto,
and all exhibits thereto;
(10) with
respect to the initial Closing Date, the Underwriting Guidelines to be attached
hereto as Exhibit H and with respect to each subsequent Closing Date, the
Underwriting Guidelines to be attached to the related Assignment and Conveyance;
and
(11) a
MERS
Report reflecting the Purchaser as Investor, the Custodian as custodian and
no
Person as Interim Funder for each MERS Designated Mortgage Loan.
The
Seller shall bear the risk of loss of the closing documents until such time
as
they are received by the Purchaser or its attorneys.
-41-
SECTION
12. Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys and custodial fees. All other costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans
and
the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage,
and
the Seller’s attorney’s fees, shall be paid by the Seller.
SECTION
13. Cooperation
of Seller with a Reconstitution.
The
Seller and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related Closing Date, on one or more dates (each, a
“Reconstitution
Date”)
at the
Purchaser’s sole option, the Purchaser may effect a sale (each, a “Reconstitution”)
of
some or all of the Mortgage Loans then subject to this Agreement, without
recourse, to:
(i) Xxxxxx
Xxx under its Cash Purchase Program or MBS Program (Special Servicing Option)
(each, a “Xxxxxx
Mae Transfer”);
or
(ii) Xxxxxxx
Mac (the “Xxxxxxx
Mac Transfer”);
or
(iii) one
or
more third party purchasers in one or more Whole Loan Transfers; or
(iv) one
or
more trusts or other entities to be formed as part of one or more Securitization
Transactions.
The
Seller agrees to execute in connection with any Agency Transfer, any and all
pool purchase contracts, and/or agreements reasonably acceptable to the Seller
among the Purchaser, the Seller and any servicer in connection with a Whole
Loan
Transfer, a sellers’ warranties and servicing agreement or a participation and
servicing agreement in form and substance reasonably acceptable to the parties,
and in connection with a Securitization Transaction, an Assignment and
Recognition Agreement substantially in the form attached hereto as
Exhibit I (each, a “Reconstitution
Agreement”).
Notwithstanding anything contained in this Agreement to the contrary, under
no
circumstances and in no event shall either Seller be required to service any
Mortgage Loans subject to a Securitization Transaction on or after the
applicable Reconstitution Date.
With
respect to each Whole Loan Transfer and each Securitization Transaction entered
into by the Purchaser, the Seller agrees (1) to reasonably cooperate with
the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform
a Reconstitution Agreement as required by the Purchaser; (3) to restate the
representations and warranties set forth in Subsection 9.01 of this Agreement
as
of the applicable Reconstitution Date and restate the representations and
warranties set forth in Subsection 9.02 of this Agreement as of the applicable
Closing Date; provided, however, that the Seller shall restate the Servicing
Representations and Warranties set forth in Subsection 9.02 of this Agreement
as
of the applicable Transfer Date. The Seller shall provide to such servicer
or
issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all reasonable information and appropriate
verification of information which may be reasonably available to the Seller
or
its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request;
(ii) such additional representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably believed necessary by the Purchaser or any
such
other participant; and (iii) to execute, deliver and satisfy all conditions
set forth in any indemnity agreement reasonably required by the Purchaser or
any
such participant. Moreover, the Seller agrees to cooperate with all reasonable
requests made by the Purchaser to effect such Reconstitution Agreement. The
Seller shall indemnify the Purchaser, each affiliate of the Purchaser
participating in the Reconstitution, each underwriter or placement agent
participating in the Reconstitution and each Person who controls the Purchaser,
such affiliate, underwriter or placement agent and their respective present
and
former directors, officers, employees and agents, and hold each of them harmless
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 each of them may sustain arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of either Seller regarding either Seller,
the Mortgage Loans or the Underwriting Guidelines set forth in any offering
document (including, without limitation, structural term sheets, collateral
term
sheets and computational materials) prepared in connection with any
Reconstitution. For purposes of the previous sentence, “Purchaser” shall mean
the Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were “Purchasers” under this Agreement.
-42-
In
the
event the Purchaser has elected to have the Seller hold record title to the
Mortgages, prior to the Reconstitution Date, the Seller shall prepare an
assignment of mortgage in blank from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of
the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall execute
each
assignment of mortgage.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and with respect thereto this Agreement shall remain
in full force and effect.
SECTION
14. The
Seller.
Subsection
14.01 Additional
Indemnification by the Seller; Third Party Claims.
(a) The
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and expenses (including legal fees and expenses incurred in
connection with the enforcement of the Seller’s indemnification obligations
under this Subsection 14.01) and related costs, judgments, and any other
costs, fees and expenses that such parties may sustain in any way related to
the
Seller to perform its duties and to service the Mortgage Loans in strict
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 13 or any breach of the Seller’s
representations, warranties and covenants set forth in this Agreement. For
purposes of this paragraph “Purchaser” shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
“Purchasers” under this Agreement and “Successor Servicer” shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and
all
Persons who previously were “Successor Servicers” pursuant to this
Agreement.
-43-
(b) Promptly
after receipt by an indemnified party under this Subsection 14.01 of notice
of
the commencement of any action, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Subsection 14.01, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party under this Subsection 14.01, except to the extent that it has been
prejudiced in any material respect, or from any liability which it may have,
otherwise than under this Subsection 14.01. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent that it may elect by written notice delivered to
the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided that if the defendants in
any
such action include both the indemnified party and the indemnifying party and
the indemnified party or parties shall have reasonably concluded that there
may
be legal defenses available to it or them and/or other indemnified parties
which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its election
so
to assume the defense of such action and approval by the indemnified party
of
counsel, the indemnifying party will not be liable to such indemnified party
for
expenses incurred by the indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)),
(ii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized in writing the employment of counsel for
the
indemnified party at the expense of the indemnifying party; and except that,
if
clause (i) or (iii) is applicable, such liability shall be only in respect
of
the counsel referred to in such clause (i) or (iii).
Subsection
14.02 Merger
or Consolidation of the Seller.
The
Seller will keep in full effect their existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will 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.
-44-
Any
Person into which either Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
either Seller shall be a party, or any Person succeeding to the business of
either Seller, shall be the successor of such Seller 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 have a net worth of at
least $25,000,000.
SECTION
15. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
audited financial statements of the Seller for the most recently completed
three
fiscal years respecting which such statements are available, as well as a
Consolidated Statement of Condition of the Seller at the end of the last two
fiscal years covered by such Consolidated Statement of Operations. The Seller
shall also make available any comparable interim statements to the extent any
such statements have been prepared by the Seller (and are available upon request
to members or stockholders of the Seller or the public at large). The Seller,
if
it has not already done so, agrees to furnish promptly to the Purchaser copies
of the statements specified above.
The
Seller also agrees to allow reasonable access to a knowledgeable financial
or
accounting officer for the purpose of answering questions asked by any
prospective purchaser regarding recent developments affecting the Seller or
the
financial statements of the Seller.
SECTION
16. Mandatory
Delivery; Grant of Security Interest.
The
sale
and delivery on the related Closing Date of the Mortgage Loans described on
the
related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of either Seller’s failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby grants to
the
Purchaser a lien on and a continuing security interest in each Mortgage Loan
and
each document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that they shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser’s (a) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the
terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (b) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights
or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or
successively.
-45-
SECTION
17. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
| (i) |
if
to the Seller:
|
Wilmington
Finance Inc.
000
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx
Meeting, Pennsylvania 19462
Attention:
Xxxx Xxxxxxx
| (ii) |
if
to the Purchaser:
|
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
1221
Avenue of the Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Xxxxxxxxxx - Whole Loan Operations Manager
Fax:
000-000-0000
Email:
xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with
copies to:
Xxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx - Servicing Oversight
0000
X-Xxx Xxx
Xxxxx
000
Xxxx
Xxxxx, Xxxxxxx 00000
Fax:
000-000-0000
Email:
xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxx - RFPG
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
000-000-0000
Email:
xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or
such
other address as may hereafter be furnished to the other party by like notice.
Any such demand, notice or communication hereunder shall be deemed to have
been
received on the date delivered to or received at the premises of the addressee
(as evidenced, in the case of registered or certified mail, by the date noted
on
the return receipt).
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SECTION
18. Severability
Clause.
Any
part,
provision representation or warranty of this Agreement which is prohibited
or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any
provision hereof. If the invalidity of any part, provision, representation
or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION
19. Counterparts.
This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original, and all such counterparts shall
constitute one and the same instrument.
SECTION
20. Governing
Law.
This
Agreement shall be deemed in effect when a fully executed counterpart thereof
is
received by the Purchaser in the State of New York and shall be deemed to have
been made in the State of New York. The 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
the
substantive laws of the State of New York (without regard to conflicts of laws
principles), except to the extent preempted by Federal law.
SECTION
21. Intention
of the Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller are
selling the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the transaction
for Federal income tax purposes as a sale by the Seller, and a purchase by
the
Purchaser, of the Mortgage Loans. Moreover, the arrangement under which the
Mortgage Loans are held shall be consistent with classification of such
arrangement as a grantor trust in the event it is not found to represent direct
ownership of the Mortgage Loans. The Purchaser shall have the right to review
the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income
tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such
review.
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SECTION
22. Successors
and Assigns; Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective permitted successors and assigns
of
the Seller and the successors and assigns of the Purchaser. This Agreement
shall
not be assigned, pledged or hypothecated by the Seller to a third party without
the prior written consent of the Purchaser, which consent may be withheld by
the
Purchaser in its sole discretion. This Agreement 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 Seller. There shall
be no
limitation on the number of assignments or transfers allowable by the Purchaser
with respect to the Mortgage Loans and this Agreement. In the event the
Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser’s obligations hereunder, the Seller acknowledges and agrees to look
solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability
to
the Seller with respect thereto.
SECTION
23. Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
24. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
25. General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
-48-
(e) the
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) the
term
“include” or “including” shall mean without limitation by reason of
enumeration.
SECTION
26. Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in
the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION
27. Further
Agreements.
The
Seller and the Purchaser each agree to execute and deliver to the other such
reasonable and appropriate additional documents, instruments or agreements
as
may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION
28. 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 their 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
Seller’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
SECTION
29. No
Solicitation.
From
and
after the related Closing Date, the Seller agrees that they will not take any
action or permit or cause any action to be taken by any of their agents or
affiliates, or by any independent contractors on either Seller’s behalf, to
personally, by telephone
or mail (via electronic means or otherwise), solicit a Mortgagor under any
Mortgage Loan for the purpose of refinancing a Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser. Notwithstanding the
foregoing, it is understood and agreed that the Seller, or any of their
respective affiliates:
(i) may
advertise its availability for handling refinancings of mortgages in their
portfolio, including the promotion of terms it has available for such
refinancings, through the sending of letters or promotional material, so long
as
it does not specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the mortgages in the
servicing portfolio of the Seller and any of its affiliates (those it owns
as
well as those serviced for others); and
-49-
(ii) may
provide pay-off information and otherwise cooperate with individual mortgagors
who contact them about prepaying their mortgages by advising them of refinancing
terms and streamlined origination arrangements that are available.
Promotions
undertaken by the Seller or by any affiliate of the Seller which are directed
to
the general public at large (including, without limitation, mass mailing based
on commercially acquired mailing lists, newspaper, radio and television
advertisements), shall not constitute solicitation under this Section 29.
SECTION
30. Waiver
of Trial by Jury.
THE
SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION
31. Governing
Law Jurisdiction; Consent to Service of Process.
THIS
AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED COUNTERPART THEREOF
IS
RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CHOICE
OF
LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER IRREVOCABLY
(I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH COURT;
(III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT
ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
SECTION
32. Confidentiality.
Each
of
the Purchaser and the Seller shall employ proper procedures and standards
designed to maintain the confidential nature of the terms of this Agreement,
except to the extent: (a) the disclosure of which is reasonably
believed by
such
party to be required in connection with regulatory requirements or other legal
requirements relating to its affairs; (b) disclosed to any one or more of
such party’s employees, officers, directors, agents, attorneys or accountants
who would have access to the contents of this Agreement and such data and
information in the normal course of the performance of such Person’s duties for
such party, to the extent such party has procedures in effect to inform such
Person of the confidential nature thereof; (c) that is disclosed in a
prospectus, prospectus supplement or private placement memorandum relating
to a
securitization of the Mortgage Loans by the Purchaser (or an affiliate assignee
thereof) or to any Person in connection with the resale or proposed resale
of
all or a portion of the Mortgage Loans by such party in accordance with the
terms of this Agreement; and (d) that is reasonably believed by such party
to be necessary for the enforcement of such party’s rights under this
Agreement.
-50-
Notwithstanding
any other express or implied agreement to the contrary, each of the Purchaser
and the Seller agree and acknowledge that each of them and each of their
employees, representatives, and other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transaction and all materials of any kind (including opinions or other
tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except to the extent that confidentiality is reasonably necessary
to comply with U.S. federal or state securities laws. For purposes of this
paragraph, the terms “tax treatment” and “tax structure” have the meanings
specified in Treasury Regulation section 1.6011-4(c).
SECTION
33. Compliance
With Regulation AB.Intent
of the Parties; Reasonableness.
The
Purchaser and the Seller acknowledges and agrees that the purpose of
Section 33 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. Although Regulation AB is applicable by its
terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include 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 (or
the
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Seller 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, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Seller 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 in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Seller, any Third-Party Originator and the Mortgage Loans, reasonably believed
by the Purchaser or any Depositor to be necessary in order to effect such
compliance.
-51-
The
Purchaser (including any of its assignees or designees) shall cooperate with
the
Seller 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.
Subsection
33.02 Additional
Representations and Warranties of the Seller.
(a) The
Seller 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 Subsection 33.03 that, except as disclosed in writing to the
Purchaser or such Depositor prior to such date: (i) there are no material legal
or governmental proceedings pending (or known to be contemplated) against the
Seller or any Third-Party Originator; and (ii) there are no affiliations,
relationships or transactions relating to the Seller or any Third-Party
Originator with respect to any Securitization Transaction and any party thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(b) 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
Subsection 33.03, the Seller shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in paragraph (a) 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.
Subsection
33.03 Information
to Be Provided by the Seller.
In
connection with any Securitization Transaction the Seller shall (i) within
five
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 to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a) and (b) of this Section, and (ii) as promptly as
practicable following notice to or discovery by any Seller, provide to the
Purchaser and any Depositor (in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor) the information specified
in
paragraph (d) of this Section.
(a) If
so
requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, 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;
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(B) 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; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, 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) against the Seller and each Third-Party Originator;
and
(D) a
description of any affiliation or relationship between the Seller, each
Third-Party Originator and any of the following parties to a Securitization
Transaction, as such parties are identified to the Seller 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.
(b) If
so
requested by the Purchaser or any Depositor, the Seller 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 (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall
be
prepared in form and substance reasonably satisfactory to the Purchaser by
the
Seller (or 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 Seller (or Third-Party
Originator) 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. 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 reasonably required by the Purchaser or the Depositor,
as
applicable. The Seller and the Purchaser agree that either (i) the Seller shall
provide all Static Pool Information, as described above, or (ii) solely with
respect to the period of time prior to January 1, 2006, the Seller shall
represent and warrant that they are unable without unreasonable effort or
expense to provide Static Pool Information and indemnify the Purchaser for
such
assessment. Notwithstanding anything in this Agreement to the contrary, the
parties hereto agree that the Purchaser or any Depositor shall not be
requesting, and the Seller shall not be required to provide, Static Pool
Information from the Seller until such time that the Purchaser is informed
by
the Seller that it is able to comply with the obligations set forth
above.
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Promptly
following notice or discovery of a material error 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 Seller 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
Seller.
If
so
requested by the Purchaser or any Depositor, the Seller 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 reasonably acceptable to the Purchaser or
Depositor, as applicable, 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 such Seller’s or
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 may include,
by way of example, any Sponsor, any Depositor and any broker dealer acting
as
underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. 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.
(c) [Reserved].
(d) If
so
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 Seller shall (or shall cause each Third-Party
Originator to) (i) notify the Purchaser and any Depositor in writing of (A)
any
material litigation or governmental proceedings pending against such Seller
or
any Third-Party Originator (to the extent permitted by applicable law) and
(B)
any affiliations or relationships that develop following the closing date of
a
Securitization Transaction between such Seller or any Third-Party Originator
and
any of the parties specified in clause (D) of paragraph (a) of this Section
(and
any other parties identified in writing by the requesting party) with respect
to
such Securitization Transaction, and (ii) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or
relationships.
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(e) With
respect to those Mortgage Loans that were sold to the Purchaser pursuant to
this
Agreement, the Purchaser shall cause the servicer (or another party) to be
obligated to provide information, on a monthly basis and in the form customarily
provided by such servicer or other party (which need not be customized for
the
Seller) with respect to the Mortgage Loans reasonably necessary for the Seller
to comply with their contractual and other obligations under Regulation AB
reasonably related to information reasonably requested from the Seller for
purposes of compliance with Regulation AB, including, without limitation,
providing to the Seller Static Pool Information, as set forth in Item 1105(a)(2)
and (3) of Regulation AB (such information provided by the servicer or such
other party, the “Loan
Performance Information”).
Subsection
33.04 Indemnification;
Remedies.
(a) The
Seller 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 preparation,
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,
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:
(i)(A) 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 Section 33 by or on
behalf of any Seller, or provided under this Section 33 by or on behalf of
any Third-Party Originator (collectively, the “Seller
Information”),
or
(B)
the
omission or alleged omission to state in the Seller Information a material
fact
required to be stated in the Seller 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 (B) of
this
paragraph shall be construed solely by reference to the Seller Information
and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Seller Information or any portion
thereof is presented together with or separately from such other
information;
(ii) any
failure by any Seller or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 33; or
(iii) any
breach by any Seller of a representation or warranty set forth in Subsection
33.02(a) or in a writing furnished pursuant to Subsection 33.02(b) 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 any Seller of a representation or warranty in a writing furnished pursuant
to
Subsection 33.02(b) to the extent made as of a date subsequent to such closing
date.
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In
the
case of any failure of performance described in clause (a)(ii) of this Section,
the Seller shall promptly reimburse the Purchaser, any Depositor, as applicable,
and each Person responsible for the preparation, 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 any Seller or any Third-Party
Originator.
(b) [Reserved].
(c) The
Purchaser shall indemnify the Seller, each affiliate of the Seller and the
respective present and former directors, officers, employees and agents of
each
of the foregoing, and shall hold each of them harmless 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:
(i) (A)
any
untrue statement of a material fact contained or alleged to be contained in
the
Loan Performance Information or (B) the omission or alleged omission to
state in the Loan Performance Information a material fact required to be stated
in the Loan Performance 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 (B) of this paragraph
shall be construed solely by reference to the Loan Performance Information
and
not to any other information communicated in connection with a sale or purchase
of securities, without regard to whether the Loan Performance Information or
any
portion thereof is presented together with or separately from such other
information; or
(ii) any
failure by the Purchaser or by the related servicer to deliver any Loan
Performance Information as required under Subsection 34.03(e).
[Signature
Page Follows]
-56-
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
| XXXXXX XXXXXXX MORTGAGE CAPITAL INC. | ||
|
(Purchaser)
|
||
| By:_________________________ | ||
| Name:_______________________ | ||
| Title:________________________ | ||
| WILMINGTON FINANCE INC. | ||
|
(Seller)
|
||
| By:_________________________ | ||
| Name:_______________________ | ||
| Title:________________________ | ||
EXHIBIT
A
CONTENTS
OF EACH MORTGAGE FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
any prospective Purchaser, and which shall be delivered to the Custodian, or
to
such other Person as the Purchaser shall designate in writing, pursuant to
Section 6 of the Mortgage Loan Purchase and Warranties Agreement to which
this Exhibit is attached (the “Agreement”):
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of _________, without recourse” and signed in the name of the last
endorsee (the “Last
Endorsee”)
by an
authorized officer. To the extent that there is no room on the face of the
Mortgage Notes for endorsements, the endorsement may be contained on an allonge,
if state law so allows and the Custodian is so advised by the Seller that state
law so allows. If the Mortgage Loan was acquired by either Seller in a merger,
the endorsement must be by “[Last Endorsee], successor by merger to [name of
predecessor]”. If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
“[Last Endorsee], formerly known as [previous name]”;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) the
original Mortgage with evidence of recording thereon. If in connection with
any
Mortgage Loan, the Seller cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such Mortgage
has
been delivered for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage, such Seller
shall deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of such Seller (or certified by the
title company, escrow agent, or closing attorney) stating that such Mortgage
has
been dispatched to the appropriate public recording office for recordation
and
that the original recorded Mortgage or a copy of such Mortgage certified by
such
public recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Custodian upon receipt thereof by
such Seller; or (ii) in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a Mortgage
is
lost after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the
original recorded Mortgage;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
A-1
(e) the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except with respect to MERS Designated Loans). The
Assignment of Mortgage must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the Assignment
of
Mortgage is to be recorded, the Mortgage shall be assigned to the Purchaser.
If
the Assignment of Mortgage is not to be recorded, the Assignment of Mortgage
shall be delivered in blank. If the Mortgage Loan was acquired by either Seller
in a merger, the Assignment of Mortgage must be made by “[Seller], successor by
merger to [name of predecessor]”. If the Mortgage Loan was acquired or
originated by either Seller while doing business under another name, the
Assignment of Mortgage must be by “[Seller], formerly known as [previous
name]”;
(f) the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Seller to the Last Endorsee (or, in the
case of a MERS Designated Loan, MERS) with evidence of recording thereon, or
if
any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the
original recorded assignments of mortgage, such Seller shall deliver or cause
to
be delivered to the Custodian, a photocopy of such intervening assignment,
together with (i) in the case of a delay caused by the public recording
office, an Officer’s Certificate of such Seller (or certified by the title
company, escrow agent, or closing attorney) stating that such intervening
assignment of mortgage has been dispatched to the appropriate public recording
office for recordation and that such original recorded intervening assignment
of
mortgage or a copy of such intervening assignment of mortgage certified by
the
appropriate public recording office to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Seller; or (ii) in the case of
an intervening assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening assignment
is lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a true
and complete copy of the original recorded intervening assignment;
(g) the
original mortgagee policy of title insurance or, in the event such original
title policy is unavailable, a certified true copy of the related policy binder
or commitment for title certified to be true and complete by the title insurance
company;
(h) the
original or, if unavailable, a copy of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
and
(i) if
any of
the above documents has been executed by a person holding a power of attorney,
an original or photocopy of such power certified by the Seller to be a true
and
correct copy of the original.
In
the
event an Officer’s Certificate of either Seller is delivered to the Purchaser
because of a delay caused by the public recording office in returning any
recorded document, such Seller shall deliver to the Purchaser, within 90 days
of
the related Closing Date, an Officer’s Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the Custodian; provided,
however,
that
any recorded document shall in no event be delivered later than one year
following the related Closing Date. An extension of the date specified in clause
(iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
A-2
EXHIBIT
B
[RESERVED]
B-1
EXHIBIT
C
SELLER’S
OFFICER’S CERTIFICATE
I,
____________________, hereby certify that I am the duly elected
[Vice] President of ________________ [COMPANY], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the “Company”)
and
further as follows:
(i) Attached
hereto as Exhibit
1
is a
true, correct and complete copy of the charter of the Company which is in full
force and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
(ii) Attached
hereto as Exhibit
2
is a
true, correct and complete copy of the bylaws of the Company which are in effect
on the date hereof and which have been in effect without amendment, waiver,
rescission or modification since ___________.
(iii) Attached
hereto as Exhibit
3
is an
original certificate of good standing of the Company issued within ten days
of
the date hereof, and no event has occurred since the date thereof which would
impair such standing.
(iv) Attached
hereto as Exhibit
4
is a
true, correct and complete copy of the corporate resolutions of the Board of
Directors of the Company authorizing the Company to execute and deliver the
Mortgage Loan Purchase and Warranties Agreement, dated as of November 1, 2006
(the “Purchase
Agreement”),
by
and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the “Purchaser”)
and
the Company, [and to endorse the Mortgage Notes and execute the Assignments
of
Mortgages by original [or facsimile] signature], and such resolutions are in
effect on the date hereof and have been in effect without amendment, waiver,
rescission or modification since ____________.
(v) Either
(i) 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 the Purchase
Agreement, [the sale of the mortgage loans] or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
(vi) Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Purchase Agreement conflicts or will conflict with or results
or
will result in a breach of or constitutes or will constitute a default under
the
charter or by-laws of the Company or, to the best of my knowledge, the terms
of
any indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by which it
is
bound.
C-1
(vii) To
the
best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Purchase Agreement, or the mortgage loans or of any action
taken
or to be taken in connection with the transactions contemplated hereby, or
which
would be likely to impair materially the ability of the Company to perform
under
the terms of the Purchase Agreement.
(viii) Each
person listed on Exhibit
5
attached
hereto who, as an officer or representative of the Company, signed (a) the
Purchase Agreement, and (b) any other document delivered or on the date
hereof in connection with any purchase described in the agreements set forth
above was, at the respective times of such signing and delivery, and is now,
a
duly elected or appointed, qualified and acting officer or representative of
the
Company, who holds the office set forth opposite his or her name on Exhibit
5,
and the
signatures of such persons appearing on such documents are their genuine
signatures.
(ix) The
Company is duly authorized to engage in the transactions described and
contemplated in the Purchase Agreement.
C-2
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice]
President
I,
________________________, an [Assistant] Secretary of ______________ [COMPANY],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Assistant]
Secretary
C-3
EXHIBIT
5
to
Company’s
Officer’s Certificate
|
NAME
|
TITLE
|
SIGNATURE
|
||
C-4
EXHIBIT
D
[RESERVED]
D-1
EXHIBIT
E
FORM
OF SECURITY RELEASE CERTIFICATION
___________________,
200__
[Federal
Home Loan Bank of
______
(the “Association”)]
________________________
________________________
________________________
|
Attention:
|
___________________________
|
|
___________________________
|
| Re: |
Notice
of Sale and Release of
Collateral
|
Dear
Sirs:
This
letter serves as notice that ________________________ [COMPANY] a [type of
entity], organized pursuant to the laws of [the State of incorporation] (the
“Company”)
has
committed to sell certain mortgage loans to Xxxxxx Xxxxxxx Mortgage Capital
Inc.
under the Mortgage Loan Purchase and Warranties Agreement. The Company warrants
that the mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage Capital Inc.
are
in addition to and beyond any collateral required to secure advances made by
the
Association to the Company.
The
Company acknowledges that the mortgage loans to be sold to Xxxxxx Xxxxxxx
Mortgage Capital Inc. shall not be used as additional or substitute collateral
for advances made by the Association. Xxxxxx Xxxxxxx Mortgage Capital Inc.
understands that the balance of the Company’s mortgage loan portfolio may be
used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
Execution
of this letter by the Association shall constitute a full and complete release
of any security interest, claim, or lien which the Association may have against
the mortgage loans to be sold to Xxxxxx Xxxxxxx Mortgage Capital
Inc.
E-1
Very
truly yours,
____________________________
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged
and approved:
[FEDERAL
HOME LOAN BANK OF]
__________________________
By:_____________________________
Name:___________________________
Title:____________________________
Date:____________________________
E-2
EXHIBIT
F
FORM
OF SECURITY RELEASE CERTIFICATION
I. Release
of Security Interest
The
financial institution named below hereby relinquishes any and all right, title,
interest, lien or claim of any kind it may have in all mortgage loans described
on the attached Schedule
A
(the
“Mortgage
Loans”),
to be
purchased by Xxxxxx Xxxxxxx Mortgage Capital Inc. from the company named on
the
next page (the “Company”)
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement, dated
as of November 1, 2006, and certifies that all notes, mortgages, assignments
and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company or its designees, as of the date and
time
of the sale of such Mortgage Loans to Xxxxxx Xxxxxxx Mortgage Capital Inc.
Such
release shall be effective automatically without any further action by any
party
upon payment in one or more installments, in immediately available funds, of
$_____________, in accordance with the wire instructions set forth
below.
Name,
Address and Wire Instructions of Financial Institution
________________________________
(Name)
________________________________
(Address)
________________________________
________________________________
________________________________
By:_____________________________
F-1
II. Certification
of Release
The
Company named below hereby certifies to Xxxxxx Xxxxxxx Mortgage Capital Inc.
that, as of the date and time of the sale of the above-mentioned Mortgage Loans
to Xxxxxx Xxxxxxx Mortgage Capital Inc. the security interests in the Mortgage
Loans released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Company
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
__________________________________
By:________________________________
Title:_______________________________
Date:_______________________________
F-2
EXHIBIT
G
FORM
OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On
this
___ day of ____________, ________, Wilmington Finance Inc. (“Seller”),
as
the Seller under (i) that certain Purchase Price and Terms Agreement, dated
as of ________, 200_ (the “PPTA”),
and
(ii) that certain Mortgage Loan Purchase and Warranties Agreement, dated as
of November 1, 2006 (the “Purchase
Agreement”),
do
hereby sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx Mortgage
Capital, Inc. (“Purchaser”)
as the
Purchaser under the Agreements (as defined below) without recourse, but subject
to the terms of the Agreements, all right, title and interest of, in and to
the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit A
(the
“Mortgage
Loans”),
together with the Mortgage Files and the related Servicing Rights and all rights
and obligations arising under the documents contained therein. Each Mortgage
Loan subject to the Agreements was underwritten in accordance with, and conforms
to, the Underwriting Guidelines attached hereto as Exhibit C.
Pursuant to Section 6 of the Purchase Agreement, the Seller has delivered
to the Custodian the documents for each Mortgage Loan to be purchased as set
forth in the Purchase Agreement. The ownership of each Mortgage Note, Mortgage
and the contents of the Mortgage File and Servicing File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in a custodial
capacity only. The PPTA and the Purchase Agreement shall collectively be
referred to as the “Agreements”
herein.
The
Mortgage Loan Package characteristics of the Mortgage Loans subject hereto
are
set forth on Exhibit B hereto.
In
accordance with Section 6 of the Purchase Agreement, the Purchaser accepts
the Mortgage Loans listed on Exhibit A
attached
hereto. Notwithstanding the foregoing the Purchaser does not waive any rights
or
remedies it may have under the Agreements.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Purchase Agreement.
[SIGNATURE
PAGE FOLLOWS]
G-1
| WILMINGTON FINANCE INC. | ||
| By:_________________________________ | ||
| Name:_______________________________ | ||
| Title:________________________________ | ||
Accepted
and Agreed:
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.
By:______________________________
Name:____________________________
Title:_____________________________
G-2
EXHIBIT
A
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
THE
MORTGAGE LOANS
G-3
EXHIBIT
B
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS
AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF EACH MORTGAGE LOAN
PACKAGE
Pool
Characteristics of the Mortgage Loan Package as delivered on the related Closing
Date:
No
Mortgage Loan has: (1) an outstanding principal balance less than $_____;
(2) an origination date earlier than __ months prior to the related Cut-off
Date; (3) a CLTV of greater than ____%; (4) a FICO Score of less than
___; or (5) a debt-to-income ratio of more than ___%. Each Mortgage Loan
has a Mortgage Interest Rate of at least ___% per annum and an outstanding
principal balance of less than $______. Each Adjustable Rate Mortgage Loan
has
an Index of [______].
G-4
EXHIBIT
C
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING
GUIDELINES
G-5
EXHIBIT
H
UNDERWRITING
GUIDELINES
H-1
EXHIBIT
I
FORM
OF
ASSIGNMENT AND RECOGNITION AGREEMENT
THIS
ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __, 20__]
(“Agreement”),
among
Xxxxxx Xxxxxxx Mortgage Capital Inc. (“Assignor”),
[____________________] (“Assignee”)
and
[SELLERS] (the “Company”):
For
and
in consideration of the sum of TEN DOLLARS ($10.00) and other valuable
consideration the receipt and sufficiency of which hereby are acknowledged,
and
of the mutual covenants herein contained, the parties hereto hereby agree as
follows:
Assignment
and Conveyance
1. The
Assignor hereby conveys, sells, grants, transfers and assigns to the Assignee
all of the right, title and interest of the Assignor, as purchaser, in, to
and
under (a) those certain Mortgage Loans listed on the schedule (the
“Mortgage
Loan Schedule”)
attached hereto as Exhibit A
(the
“Mortgage
Loans”)
and
(b) except as described below, that certain Mortgage Loan Purchase and
Warranties Agreement (the “Purchase
Agreement”),
dated
as of November 1, 2006, between the Assignor, as purchaser (the “Purchaser”),
and
the Company, as seller, solely insofar as the Purchase Agreement relates to
the
Mortgage Loans.
The
Assignor specifically reserves and does not assign to the Assignee hereunder
(i) any and all right, title and interest in, to and under and any
obligations of the Assignor with respect to any mortgage loans subject to the
Purchase Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement or (ii) the rights
of the Purchaser under Section 9.04
of the
Purchase Agreement.
Recognition
of the Company
2. From
and
after the date hereof (the “Securitization
Closing Date”),
the
Company shall and does hereby recognize that the Assignee will transfer the
Mortgage Loans and assign its rights under the Purchase Agreement (solely to
the
extent set forth herein) and this Agreement to [__________________] (the
“Trust”)
created pursuant to a Pooling and Servicing Agreement, dated as of [______],
200_ (the “Pooling
Agreement”),
among
the Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the “Trustee”),
[____________________], as servicer (including its successors in interest and
any successor servicer under the Pooling Agreement, the “Servicer”).
The
Company hereby acknowledges and agrees that from and after the date hereof
(i) the Trust will be the owner of the Mortgage Loans, (ii) the
Company shall look solely to the Trust for performance of any obligations of
the
Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust’s behalf) shall have
all the rights and remedies available to the Assignor, insofar as they relate
to
the Mortgage Loans, under the Purchase Agreement, including, without limitation,
the enforcement of the document delivery requirements set forth in Section 6
of the
Purchase Agreement, and shall be entitled to enforce all of the obligations
of
the Company thereunder insofar as they relate to the Mortgage Loans, and
(iv) all references to the Purchaser, the Custodian or the Bailee under the
Purchase Agreement insofar as they relate to the Mortgage Loans, shall be deemed
to refer to the Trust (including the Trustee and the Servicer acting on the
Trust’s behalf). Neither the Company nor the Assignor shall amend or agree to
amend, modify, waiver, or otherwise alter any of the terms or provisions of
the
Purchase Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company’s performance under
the Purchase Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
I-1
Representations
and Warranties of the Company
3. The
Company warrants and represents to the Assignor, the Assignee and the Trust
as
of the date hereof that:
| (a) |
The
Company is duly organized, validly existing and in good standing
under the
laws of the jurisdiction of its
incorporation;
|
| (b) |
The
Company has full power and authority to execute, deliver and perform
its
obligations under this Agreement and has full power and authority
to
perform its obligations under the Purchase Agreement. The execution
by the
Company of this Agreement is in the ordinary course of the Company’s
business and will not conflict with, or result in a breach of, any
of the
terms, conditions or provisions of the Company’s charter or bylaws or any
legal restriction, or any material agreement or instrument to which
the
Company is now a party or by which it is bound, or result in the
violation
of any law, rule, regulation, order, judgment or decree to which
the
Company or its property is subject. The execution, delivery and
performance by the Company of this Agreement have been duly authorized
by
all necessary corporate action on part of the Company. This Agreement
has
been duly executed and delivered by the Company, and, upon the due
authorization, execution and delivery by the Assignor and the Assignee,
will constitute the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms except
as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating
to
creditors’ rights generally, and by general principles of equity
regardless of whether enforceability is considered in a proceeding
in
equity or at law;
|
| (c) |
No
consent, approval, order or authorization of, or declaration, filing
or
registration with, any governmental entity is required to be obtained
or
made by the Company in connection with the execution, delivery or
performance by the Company of this Agreement;
and
|
| (d) |
There
is no action, suit, proceeding or investigation pending or threatened
against the Company, before any court, administrative agency or other
tribunal, which would draw into question the validity of this Agreement
or
the Purchase Agreement, or which, either in any one instance or in
the
aggregate, would result in any material adverse change in the ability
of
the Company to perform its obligations under this Agreement or the
Purchase Agreement, and the Company is
solvent.
|
I-2
4. Pursuant
to Section 13
of the
Purchase Agreement, the Company hereby represents and warrants, for the benefit
of the Assignor, the Assignee and the Trust, that the representations and
warranties set forth on Exhibit
B
hereto
are true and correct as of the applicable Closing Date; provided, however,
that
the Seller shall restate the representations and warranties set forth on
Exhibit B
that
match the Servicing Representations and Warranties as set forth in Subsection
9.02 of the Purchase Agreement as of the applicable Transfer Date unless
otherwise specifically stated in such representations and
warranties.
Remedies
for Breach of Representations and Warranties
5. The
Company hereby acknowledges and agrees that the remedies available to the
Assignor, the Assignee and the Trust (including the Trustee and the Servicer
acting on the Trust’s behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3
and 4 hereof shall be as set forth in Subsection 9.03
of the
Purchase Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth
therein).
Miscellaneous
6. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
7. No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced, with the prior written consent of the
Trustee.
8. This
Agreement shall inure to the benefit of (i) the successors and assigns of
the parties hereto and (ii) the Trust (including the Trustee and the
Servicer acting on the Trust’s behalf). Any entity into which Assignor, Assignee
or Company may be merged or consolidated shall, without the requirement for
any
further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
9. Each
of
this Agreement and the Purchase Agreement shall survive the conveyance of the
Mortgage Loans and the assignment of the Purchase Agreement (to the extent
assigned hereunder) by Assignor to Assignee and by Assignee to the Trust and
nothing contained herein shall supersede or amend the terms of the Purchase
Agreement.
10. This
Agreement may be executed simultaneously in any number of counterparts. Each
counterpart shall be deemed to be an original and all such counterparts shall
constitute one and the same instrument.
11. In
the
event that any provision of this Agreement conflicts with any provision of
the
Purchase Agreement with respect to the Mortgage Loans, the terms of this
Agreement shall control.
I-3
12. Capitalized
terms used in this Agreement (including the exhibits hereto) but not defined
in
this Agreement shall have the meanings given to such terms in the Purchase
Agreement.
IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
duly authorized officers as of the date first above written.
| WILMINGTON FINANCE INC. | ||
| By:________________________ | ||
|
Name:______________________
|
||
|
Its:_________________________
|
||
| XXXXXX XXXXXXX MORTGAGE CAPITAL INC. | ||
| By:________________________ | ||
|
Name:______________________
|
||
|
Its:_________________________
|
||
| [__________________________] | ||
| By:________________________ | ||
|
Name:______________________
|
||
|
Its:_________________________
|
I-4
EXHIBIT
A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage
Loan Schedule
I-5
EXHIBIT
B TO ASSIGNMENT AND RECOGNITION AGREEMENT
Representations
and Warranties
Regarding
Individual Mortgage Loans
I-6
