EXHIBIT 10.29
SUB-SERVICING AGREEMENT
THIS SUB-SERVICING AGREEMENT (the "Agreement") is made as of the 15th day of
September, 1997, by and between NEW CENTURY MORTGAGE CORPORATION, a California
corporation ("New Century" or "Master Servicer") and COMERICA MORTGAGE
CORPORATION, a Michigan corporation ("Comerica" or "Sub-Servicer").
BACKGROUND
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New Century has previously entered into, and may in the future enter into:
(A) various pooling and servicing agreements (which, along with referenced,
related and ancillary agreements are herein called, individually, a "Pooling
Agreement" and collectively, the "Pooling Agreements") among various investment
bankers, as depositors, New Century Mortgage Corporation, as master servicer,
and certain entities offering trust services, as trustees. The Pooling
Agreements are identified in the attached Addendum "A", which Addendum "A" shall
be amended and updated from time to time as Pooling Agreements are added to and
deleted from coverage under this Agreement; and
(B) various agreements (individually, a "Servicing Agreement" and collectively
the "Servicing Agreements") by and between New Century and various secondary
market mortgage lenders covering the interim or permanent servicing of mortgage
loans acquired by such secondary market lenders. The Servicing Agreements are
identified in the attached Addendum "A", which Addendum "A" shall be amended and
updated from time to time, in writing signed by both parties, as Servicing
Agreements are added to and deleted from coverage under this Agreement.
Pursuant to the terms of the Pooling Agreements and Servicing Agreements, New
Century, acting directly or through one or more sub-servicers, is to act as
master servicer to service and administer certain mortgage loans in accordance
with the Pooling Agreements and Servicing Agreements.
New Century desires to appoint Comerica to perform certain of New Century's
servicing obligations under the Pooling Agreements and Servicing Agreements.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Appointment of Sub-Servicer.
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(a) New Century hereby appoints Comerica, as its agent, to perform
certain of New Century's servicing obligations under the Pooling Agreements
and Servicing Agreements with respect to the mortgage loans (individually, a
"Mortgage Loan" and collectively, the "Mortgage Loans") identified by New
Century. Comerica accepts such appointment and agrees to perform the
servicing duties identified in the list of servicing duties attached hereto
as Addendum "B" (the "Servicing Duties"). The Servicing Duties may be
updated or supplemented from time to time by New Century and Comerica only
by a writing signed by both parties. The Servicing Duties shall be performed
by Comerica with the same care and according to the same standards Comerica
uses in servicing its own mortgage loans.
(b) The Servicing Duties to be performed by Comerica generally include
functions related to cashiering, customer service, taxes, insurance and
investor reporting. Comerica shall not be responsible for functions related
to bankruptcies, default management (including collections) or other non-
delinquency work-out management, foreclosure and management of real estate
acquired through foreclosure or deed in lieu of foreclosure ("REO"), which
servicing functions shall continue to be the obligation of the New Century.
Comerica's subservicing duties under this Agreement shall be limited to the
Servicing Duties and Comerica shall have no duty or obligation to determine
any servicer or sub-servicer duties set forth in the Pooling Agreements or
Servicing Agreements, and shall not be bound by the representations,
warranties and obligations of New Century thereunder with respect to such
duties.
(c) Comerica shall be New Century's exclusive agent with respect to sub-
servicing of the Mortgage Loans, except that:
(i) New Century shall not be required to terminate sub-servicing
arrangements it has respecting mortgage loans existing on the date of
this Agreement;
(ii) New Century shall not be required to use Comerica for sub-
servicing Mortgage Loans covered by a Pooling Agreement or Servicing
Agreement if, under the terms of such Pooling Agreement or Servicing
Agreement, Comerica is not approved to provide such services; and
(iii) Comerica shall not be required to sub-service Mortgage Loan which
are of a type which cannot be processed on its then current servicing
system unless New Century and Comerica mutually agree to the
modification of Comerica's servicing system to accommodate such loans.
2. Compensation. As compensation for the services specified herein, Comerica
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shall be entitled to:
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(a) retain from each monthly payment due to New Century servicing
fees of the type and in the amount set forth in Exhibit "A", with
respect to each Mortgage Loan serviced as of the first day of the month
in which the first monthly payment becomes due (the "Sub-Servicing
Fee"). The Sub-Servicing Fee, as listed in Exhibit "A", shall be
reviewed by Comerica and New Century no less frequently than annually,
and at the time of any change in the Servicing Duties.
(b) all investment earnings on the accounts established by Comerica
for deposit of all collections of principal, interest and escrow with
respect to the Mortgage Loans (the "Collection Accounts"),
(c) all expenses incurred by Comerica in servicing the Mortgage Loans
as a result of New Century's negligent or intentional actions or
inactions, and
(d) additional servicing compensation consisting of release and
satisfaction fees (to the extent allowed by law), bad check charges,
assumption, modification, conversion and substitution fees, tax service
fees, bi-weekly mortgage payment program fees, fees for statement of
account or pay off of the Mortgage Loan and any other servicing-related
fees to the extent not related to the functions performed by New Century
or otherwise required to be deposited in Collection Accounts, may be
retained by Comerica directly from collections. So long as Comerica
receives investment earnings on the Collection Accounts, any net
investment losses in funds held in the Collection Accounts shall be for
the account of Comerica and promptly upon the realization of such loss
shall be contributed by Comerica to the Collection Accounts.
Each month Comerica shall collect servicing fees and all additional
servicing compensation due New Century under the Pooling Agreements and
Servicing Agreements, as described in the Servicing Duties. These servicing fees
may be subject to offset under the provisions of the Pooling Agreements and
Servicing Agreements. The amount remaining following such offset, as a dollar
amount for any month, is referred to herein as the "Net Servicing Fee". Comerica
shall remit to New Century an amount equal to the Net Servicing Fee collected by
the Comerica less the Sub-Servicing Fee and other items set forth above, to an
account specified in writing by New Century. New Century shall receive all late
payment charges and all prepayment penalties to the extent collected.
Notwithstanding the foregoing, the Sub-Servicing Fee shall not be
reduced hereby and New Century shall make Comerica whole if the total Sub-
Servicing Fee is not available and such unavailability is not due to the
negligent or intentional acts of Comerica. Comerica is hereby authorized to
reduce the Net Servicing Fee in order to offset any such reduction.
3. Representations, Warranties and Covenants of Comerica. Comerica hereby
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represents and warrants to New Century as follows:
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(a) Comerica is a Michigan corporation duly organized, validly
existing and in good standing under the laws of the state of its
incorporation and is in compliance with the laws of each state in which
any Mortgaged Property is located to the extent necessary to enable it
to perform its obligations under the terms of this Agreement; Comerica
has the full corporate power and authority to execute and deliver this
Agreement and to perform in accordance herewith; the execution, delivery
and performance of this Agreement by Comerica and the consummation of
the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of Comerica; and all requisite corporate action has been
taken by Comerica to make this Agreement valid and binding upon Comerica
in accordance with its terms;
(b) Neither the execution and delivery of this Agreement, 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 Comerica's charter or by-laws or any legal
restriction or any agreement or instrument to which Comerica 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 Comerica
or its property is subject, or impair the ability of Comerica to realize
on the Mortgage Loans, or impair the value of the Mortgage Loans;
(c) Comerica is an approved seller/servicer of conventional
residential mortgage loans for FNMA and FHLMC;
(d) There is no action, suit, proceeding, or investigation pending
or, to the knowledge of Comerica, threatened against Comerica 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 Comerica, or in any material
impairment of the right or ability of Comerica to carry on its business
substantially as now conducted, or of any action taken or to be taken in
connection with the obligations of Comerica contemplated herein, or
which would materially impair the ability of Comerica to perform under
the terms of this Agreement; and
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Comerica of or compliance by Comerica with this Agreement
or the Mortgage Loans or the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the date of this Agreement.
Upon discovery by any of New Century, Comerica, a depositor or trustee
under the Pooling Agreements or Servicing Agreements (individually, the
"Depositor" and/or the "Trustee" and collectively the "Depositors" and/or the
"Trustees") or any party having a direct or indirect interest in the Mortgage
Loans (the "Certificateholders") or any party insuring such interest (the
"Certificate Insurers"), of a breach of any of the representations and
warranties set forth in this Paragraph 3
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which materially and adversely affects the interests of any party having a
direct or indirect interest in the Mortgage Loans, the party discovering such
breach shall give prompt written notice to the other parties. Within sixty
(60) days of its discovery or its receipt of notice of breach, or such lesser
cure period as may be specified by New Century if such lesser cure period is
required under a Pooling Agreement or Servicing Agreement, Comerica shall cure
such breach in all material respects and, upon Comerica's continued failure to
cure such breach, may thereafter be removed by New Century, a Certificateholder
or a Certificate Insurer pursuant to paragraph 3 hereof; provided, however, that
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if Comerica can demonstrate to the reasonable satisfaction of New Century that
it is diligently pursuing remedial action, then the cure period may be extended
with the written approval of New Century, which written approval shall not be
unreasonably withheld.
4. Removal, Resignation and Termination of Comerica.
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(a) New Century, may remove Comerica upon the occurrence of any of
the following events (each, a "Comerica Event of Default"), which
removal shall be deemed a termination for cause:
(i) any failure by Comerica to remit to a Trustee for
distribution to the Certificateholders any payment required to
be made under the terms of this Agreement which continues
unremedied for a period of one business day after the date upon
which written notice of such failure, requiring the same to be
remedied, shall have been given to Comerica by a Depositor, a
Trustee, a Certificate Insurer, a Certificateholder or New
Century; or
(ii) any failure on the part of Comerica duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of Comerica contained in this Agreement,
or the breach by Comerica of any representation and warranty
contained in paragraph 3 hereof, which continues unremedied for
a period of sixty (60) days (or such shorter period as may be
required under paragraph 3 hereof) after the earlier of (A) the
date on which written notice of such failure, requiring the
same to be remedied, shall have been given to Comerica by a
Depositor, a Trustee, a Certificate Insurer, a
Certificateholder or New Century and (B) actual knowledge of
such failure by an officer of Comerica; or (C) a decree or
order of a court or agency or supervisory authority having
jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or
similar law or the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling
of assets and liabilities or similar proceeding, or for the
winding-up or liquidation of its affairs, shall have been
entered against the Comerica and such decree or order shall
have remained in force undischarged or unstayed for a period of
ninety (90) days; or
(iii) Comerica shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and
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liabilities or similar proceedings of or relating to it or of
or relating to all or substantially all of its property; or
(iv) Comerica shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors,
or voluntarily suspend payment of its obligations; or
(v) any change of control of Comerica shall have occurred. A
change in control shall occur if (A) any "person" (as that term
is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), other than a
trustee or other fiduciary holding securities under an employee
benefit plan of Comerica or a corporation owned directly or
indirectly by the stockholders of Comerica in substantially the
same proportions as their ownership of stock of Comerica,
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of
Comerica representing 25% or more of the total voting power
represented by Comerica's then outstanding voting securities,
or (B) during any period of two consecutive years, individuals
who at the beginning of the two year period constitute the
Board of Directors of Comerica and any new director whose
election by the Board of Directors or nomination for election
by Comerica's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority of the Board of
Directors, or (C) the stockholders of Comerica approve a merger
or consolidation of Comerica with any other corporation, other
than a merger or consolidation which would result in the voting
securities of Comerica outstanding immediately prior to such a
merger or consolidation continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 80% of the total
voting power represented by the voting securities of Comerica
or the surviving entity outstanding immediately after the
merger or consolidation, or the stockholders of Comerica
approve a plan of complete liquidation of Comerica or an
agreement for the sale or disposition by Comerica (in one
transaction or a series of transactions) of all or
substantially all Comerica's assets.
If a Comerica Event of Default described in clauses (i) through
(v) of this subparagraph shall occur, then, and in each and every such
case, so long as such Comerica Event of Default shall not have been
remedied, New Century shall be entitled to direct costs and expenses
it incurs as a result of the Event of Default and New Century or a
Certificate Insurer may, by notice in writing to Comerica, terminate
all of the rights and obligations of Comerica in its capacity of sub-
servicer under this Agreement,
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to the extent permitted by law, and in and to the Mortgage Loans and
the proceeds thereof. On or after the receipt by Comerica of such
written notice, all authority and power of Comerica under this
Agreement or the Mortgage Loans shall pass to and be vested in New
Century pursuant to and under this Section, and, without limitation,
New Century is hereby authorized and empowered, as attorney-in-fact or
otherwise, to execute and deliver, on behalf of and at the expense of
Comerica, any and all documents and other instruments and to do or
accomplish all other acts or things necessary of appropriate to effect
the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Comerica agrees promptly (and in any
event no later than ten (10) business days subsequent to such notice)
to provide New Century with all documents and records requested by it
to enable it to assume the sub-servicer's functions under this
Agreement, and to cooperate with New Century in effecting the
termination of Comerica's responsibilities and rights under this
Agreement, including, without limitation, the transfer within one (1)
business day to New Century for administration by it of all cash
amounts which at the time shall be or should have been credited by
Comerica to a Collection Account held by or on behalf of Comerica
(provided, however, that Comerica shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or
prior to the date of such termination and shall continue to be
entitled to the benefits of paragraph 6 notwithstanding any such
termination).
(b) Comerica shall not resign from the obligations and duties
hereby imposed on it, except by mutual agreement of Comerica and New
Century, with the consent of the appropriate Certificate Insurer, if
applicable, or upon determination that Comerica duties hereunder are
no longer permissible under applicable law or are in material conflict
by reason of applicable law with any other activities carried on by
it, the other activities of Comerica so causing such a conflict being
of a type and nature carried on by Comerica at the date of this
Agreement. Any such determination permitting the resignation of
Comerica shall be evidenced by an opinion of counsel to such effect
which shall be delivered to New Century and the appropriate
Certificate Insurer, if applicable.
(c) New Century may, in any event and without cause, withdraw any
or all Mortgage Loans serviced hereunder upon written demand, made at
least one hundred eighty (180) days prior to date of withdrawal (or
such shorter period as may be required to comply with a servicing
transfer or termination for cause by an investor, trustee or similar
party), except that New Century shall pay Comerica, on the effective
date of termination, a termination fee as set forth in Exhibit "A"
attached hereto.
(d) Any collections received by Comerica after removal, resignation
or termination shall be endorsed by it to New Century and remitted
directly and promptly to New Century.
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(e) Upon removal, resignation or termination of Comerica, New
Century shall select a successor sub-servicer.
(f) A successor sub-servicer under this Agreement shall take such
action, consistent with this Agreement, as shall be reasonably
necessary to effectuate any such succession. Comerica agrees to
cooperate with a successor sub-servicer in effecting the termination
of Comerica, servicing responsibilities and rights hereunder and shall
promptly provide such successor servicer all documents and records
reasonably requested by it to enable it to assume Comerica's functions
hereunder and shall promptly also transfer to such successor sub-
servicer all amounts which should have been deposited in the
Collection Account by Comerica or which are thereafter received with
respect to the Mortgage Loans. The successor sub-servicer shall not be
held liable by reason of any failure to make, or any delay in making,
any distribution hereunder or any portion thereof caused by (ii) the
failure of Comerica to deliver, or any delay in delivering, cash,
documents or records to it, or (ii) restrictions imposed by any
regulatory authority having jurisdiction over Comerica.
(g) Any successor sub-servicer shall assume all rights and
obligations of the predecessor sub-servicer under this Agreement,
except those arising before succession.
(h) If an event of default of New Century occurs under a Pooling
Agreement or a Servicing Agreement, and (i) such event of default is
not the result of a Comerica Event of Default, and (ii) as a result of
such event of default New Century is terminated, Comerica may, if it
so chooses and with the consent of the Certificate Insurer, become the
successor master servicer for the Mortgage Loans covered by such
Pooling Agreement or Servicing Agreement.
(i) In the event New Century is terminated pursuant to the terms of
any Pooling Agreement or any Servicing Agreement and (i) Comerica
shall have elected not to become the successor master servicer, or
(ii) if the Certificate Insurer withholds its consent and Comerica is
not approved as the successor master servicer, the Trustee or the
Certificate Insurer may terminate this Agreement, as it relates to
those Mortgage Loans covered by such Pooling Agreement or Servicing
Agreement, subject to any fees required in the attached Exhibit "A."
5. No Assignment. Except as provided herein, neither New Century nor
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Comerica may assign or transfer its rights or obligations under this Agreement
without prior written consent of the parties hereto; provided, however, this
shall not prevent Comerica in its sole judgment from delegating specific
servicing obligations hereunder to, including without limitation, computer
bureaus, credit bureaus, real estate tax service companies, real estate brokers,
or agents, attorneys, trustees and any other determined by Comerica as long as
Comerica remains responsible for any action taken or not taken by such
companies, agents, representatives throughout the term of this Agreement. Merger
of Comerica with its parent, subsidiary or affiliate shall not be deemed an
assignment of this Agreement by Comerica.
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6. Limitation on Liability of Comerica and Others.
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(a) Comerica and any director, officer, employee or agent of
Comerica may rely in good faith on any document of any kind which,
prima facie, is properly executed and submitted by any person
respecting any matters arising thereunder. Comerica and any director,
officer, employee or agent of Comerica shall be indemnified and held
harmless by New Century against any loss, liability or expense
incurred in connection with any legal action relating to this
Agreement, other than any loss, liability or expense to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement) or
any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of
duties hereunder or by reason of disregard of obligations and duties
hereunder.
(b) To the extent that Comerica incurs any loss, liability or
expense arising out of or in connection with this Agreement, New
Century hereby assigns to Comerica New Century's right to
indemnification from the provisions of any Pooling Agreement or
Servicing Agreement; provided, however, that in the event New Century
seeks indemnification pursuant to any Pooling Agreement or Servicing
Agreement for itself, Comerica shall be indemnified pursuant to clause
(a) hereof.
(c) Comerica shall not be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to
its respective duties under this Agreement and, in its opinion, does
not involve it in any expense or liability; provided, however, that
Comerica may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, pursuant to clause (b)
above, the legal expenses and costs of such action and any liability
resulting therefrom (except any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the
performance of duties hereunder or by reason of disregard of
obligations and duties hereunder) shall be expenses, costs and
liabilities of New Century. In the case of reimbursement from a
Trustee, Comerica shall be entitled to be reimbursed therefor from the
Collection Account as and to the extent provided in the applicable
Pooling Agreement or Servicing Agreement, any such right of
reimbursement being prior to the rights of the Certificateholders to
receive any amount in the Collection Account.
7. Amendment to Sub-Servicing Agreement. This Agreement may be amended
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from time to time by written agreement signed by New Century and Comerica.
8. Annual Statement as to Compliance. Comerica, at its own expense, will
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deliver to New Century, each Trustee and each Certificate Insurer, on or before
90 days following the end of the fiscal year of Comerica, commencing in 1998, an
officer's certificate stating, as to each signer thereof, that
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(a) a review of the activities of Comerica during such preceding
calendar year and of performance under this Agreement has been made
under such officer's supervision; and
(b) to the best of such officer's knowledge, based on such review,
Comerica has fulfilled all its obligations under this Agreement for
such year, or, if there has been a default in the fulfillment of all
such obligations, specifying each such default known to such officer
and the nature and status thereof including the steps being taken by
Comerica to remedy such default.
9. Annual Independent Certified Public Accountant's Reports. Not later
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than 90 days following the end of each fiscal year of Comerica, commencing in
1998, Comerica, at its own expense, shall cause to be delivered to New Century,
the Trustees and the Certificate Insurers a report stating that:
(a) it has obtained a letter of representation regarding certain
matters from the management of Comerica which includes an assertion
that Comerica has complied with certain minimum residential mortgage
loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year; and
(b) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of
Certified Public Accountants, such representation is fairly stated in
all material respects, subject to such exceptions and other
qualifications that may be appropriate.
10. Access to Certain Documentation and Information Regarding the Mortgage
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Loans. Comerica shall provide to the Office of Thrift Supervision, the FDIC, and
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any other federal or state banking or insurance regulatory authority that may
exercise authority over any Certificateholder, access to the documentation
regarding the Mortgage Loans required by applicable laws and regulations. Such
access shall be afforded without charge but only upon reasonable request and
during normal business hours at the offices of Comerica designated by it. In
addition, access to the documentation regarding the Mortgage Loans will be
provided to any Certificateholder, any Certificate Insurer and any Trustee upon
reasonable request during normal business hours at the offices of Comerica
designated by it at the expense of the party requesting such access.
11. Miscellaneous.
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(a) Indulgences, Etc. Neither the failure nor any delay on the part
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of either party to exercise any right, remedy, power or privilege
("Right") under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any Right
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preclude any other or further exercise of the same or of any other
Right, nor shall any waiver of any Right with respect to any
occurrence be construed as a waiver of such Right with respect to any
other occurrence. No waiver shall be effective unless it is in writing
and is signed by the party asserted to have granted such waiver.
(b) Controlling Law. This Agreement and all questions relating to
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its validity, interpretation, performance and enforcement (including,
without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the
State of New York, notwithstanding any conflict-of-laws doctrines of
the State of New York or other jurisdictions to the contrary, and
without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
(c) Waiver of Jury Trial. Each of the parties hereby irrevocably
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waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, any other
transaction document or any instrument or document delivered hereunder
or thereunder.
(d) Notices. All notices, requests, demands and other
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communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given, made and received
only when delivered (personally, by courier service such as Federal
Express, or by other messenger) against receipt or three days after
when deposited in the United States mails, first class postage
prepaid, addressed as set forth below:
(i) If to New Century:
New Century Mortgage Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(ii) If to Comerica:
Comerica Mortgage Corporation
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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In addition, notice by mail shall be by air mail if posted
outside of the continental United States. Any party may alter the
address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of
this paragraph for the giving of notice.
(e) Binding Nature of Agreement. This Agreement shall be binding
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upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
(f) Provisions Separable. The provisions of this Agreement are
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independent of and separate from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or
unenforceable in whole or in part.
(g) Counterparts. For the purpose of facilitating the execution of
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this Agreement and or other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which shall be
deemed to be an original, and together shall constitute and be one and
the same instrument.
(h) Entire Agreement. This Agreement contains the entire
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understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements
and understandings, inducements or conditions, express or implied,
oral or written, except as herein contained. The express terms hereof
control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof. This Agreement may
not be modified or amended other than by an Agreement in writing.
(i) Paragraph Headings. The paragraph headings in this Agreement
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are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(j) Advice from Counsel. The parties understand that this Agreement
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is a legally binding agreement that may affect such party's rights.
Each party represents to the other that it has received legal advice
from counsel of its choice regarding meaning and legal significance of
this Agreement and that it is satisfied with its legal counsel and the
advice received from it.
(k) Judicial Interpretation. Should any provision of this Agreement
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or any of the other transaction documents require judicial
interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be
more strictly construed against any party by reason of the rule of
construction that a document is to be construed more strictly against
the party who itself or through its agent prepared the same, it being
agreed that all parties have participated in the preparation of this
Agreement.
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(l) Non-Compete. Notwithstanding anything to the contrary contained
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in this Agreement, Comerica shall not use information it acquires in
the course of sub-servicing the Mortgage Loans to solicit similar
loans for itself, its subsidiaries and affiliates or third-party
lenders competing directly with New Century.
(m) Insurance Solicitation. Each of the parties hereby agrees that
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no solicitations of the other party's customer for mortgage credit
life and mortgage disability insurances shall be extended unless
mutually agreed upon by both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date first above written.
NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
Xxxx X. Xxxxxxx
Chief Executive Officer
COMERICA MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx
-----------------------------
Xxxxxx Xxxxx
First Vice President
13
ADDENDUM "A"
DATED AS OF--------------------
POOLING AND SERVICING AGREEMENTS
THIS ADDENDUM is attached to and made a part of that certain Sub-Servicing
Agreement (the "Agreement") dated as of September 15, 1997, by and between NEW
CENTURY MORTGAGE CORPORATION ("New Century") and COMERICA MORTGAGE CORPORATION
("Comerica"). This Addendum may be amended from time to time by New Century and
Comerica in accordance with the Agreement.
The following Pooling Agreements (as such term is defined in the Agreement) are
deemed to be covered by the Agreement:
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DATE INVESTMENT BANKER TRUSTEE
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The following Servicing Agreements(as such term is defined in the Agreement) are
deemed to be covered by the Agreement:
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DATE PURCHASER/INVESTOR
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COMERICA MORTGAGE CORPORATION NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx By: /s/Xxxx X. Xxxxxxx
------------------------- ----------------------------
Xxxxxx Xxxxx Xxxx X. Xxxxxxx
Its: First Vice President Its: Chief Executive Officer
Page 2 of 2
ADDENDUM "B"
DATED AS OF: SEPTEMBER 15, 1997
SERVICING DUTIES
THIS ADDENDUM is attached to and made a part of that certain Sub-Servicing
Agreement (the "Agreement") dated as of September 15, 1997, by and between NEW
CENTURY MORTGAGE CORPORATION ("New Century") and COMERICA MORTGAGE CORPORATION
("Comerica"). This Addendum may be amended from time to time by New Century and
Comerica in accordance with the Agreement. This Addendum may be supplemented
from time to by use of one (1) or more attachments in the form of the
"Attachment B-___ " included herewith. To the extent the servicing duties
specified in this Addendum are inconsistent with any Attachment, the servicing
duties specified in the Attachment shall prevail.
Cashiering
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. Acceptance and application of mortgagor's payments through Lockbox
processing, ACH or manual processing. Payments applied in following order:
. Required interest
. Required principal
. Deposits for taxes and insurances
. All other fees, charges or penalties
Payment will be applied within 24 hours of receipt. Same day processing for
payments received prior to 3:30 P.M. (EST) unless specified by New Century
through processing stops placed on MSP Servicing System.
. Payments received on Comerica Business Days which fall on the 16th and last
day of the month will be processed until 9:00 P.M. (EST).
. Reversal of payments due to insufficient funds. Reversals will be completed
within 24 hours of notice. Same day reversal for notice received prior to
3:00 P.M. (EST). Notification to New Century by next business day.
Investor Reporting
------------------
. Monthly remittances to New Century within eighteen (18) calendar days
following the last business day of each month. Remittances shall be payable
by wire and shall be net of Comerica's compensation, outstanding advances
and reimbursements.
. Monthly reports will be provided to New Century, along with Investor,
through the Alltel Servicing System. Contracts identified as Actual/Actual
and New Century's Warehouse
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Investor (Inv. 555) will generate hard copy reports using the Actual/Actual
remittance logic with the following reports included:
. Trial Balance
. Collection Report
. Curtailment Report
. Paid-in-Full Report
. Prepaid Report
. Single Debit Reconciliation
. Monthly hard copy reports will be provided to New Century, along with
Investor, through the Alltel Servicing system. Contract identified as
Schedule/Schedule reporting (hereby called 660 reporting) will generate
reports using Schedule/Schedule remittance logic with the following reports
included:
. Trial Balance
. Collection Report
. Curtailment Report
. Paid-in-Full Report
. Prepaid Report
. Loans Added Report
. Private Pool Detail Report
. Remittance to Investor will be as preceding month-end information supplied
by New Century by the eighteenth (18th) calendar day of the following
month.
. Individual investor remittances, dates and reports to be set up based upon
attachments to Addendum B.
. Interest short fall adjustments will be advanced daily by Comerica and
funded by New Century monthly.
. Funds collected will be segregated and held in custodial accounts stating
Comerica as "Custodian" for New Century.
Customer Service
----------------
. Telephone service with customer service representatives Monday through
Thursday 8:30 A.M. to 7:00 P.M. (EST) and Friday 8:30 A.M. to 6:00 P.M.
(EST).
. Telephone service with Voice Response Unit (VRU) Monday through Friday 7:00
A.M. to 11:00 P.M. (EST) and Saturday 7:00 AM. to 6:00 P.M. (EST).
. Written correspondence with responses within three (3) days of receipt.
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. ARM adjustments calculated based upon ARM data supplied by New Century.
. ARM calculation headers provided to New Century for review and approval
prior to individual loan calculations.
. Notice of ARM payment adjustment to customers within regulatory time
frames.
. Monthly billing for all mortgage payments except for mortgagors who
maintain ACH payment.
. Processing of name changes as a result of marriage, death, divorce
according to procedures followed for other loans serviced. Notification to
New Century.
Loan Set Up
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. Set up of loan closed according to current matrix (Exhibit C) on Alltel
Servicing System based upon complete loan information provided by New
Century and documented on the New Loan Boarding sheet (Exhibit B).
. Completed boarding sheets will be processed within 48 business hours of
receipt.
. Incomplete or rejected set ups will be returned to New Century within 24
hours of occurrence.
. Data input audit on all manual boardings.
. Loans with escrow/impound accounts and interest due will be funded from the
established New Century deposit account.
. Provide New Century with updates to matrix (Exhibit C) on method of tax
accrual, cushions and tax payments due dates by state.
. Provide daily reports to New Century for balancing loans boarded by units,
principal balance and escrow balances.
Property Tax Maintenance
------------------------
. Payment of property taxes by the penalty date for all loans with an
escrow/impound account, except for taxes due 30 days before closing, which
will be collected and paid at closing.
. Annual property tax searches on all loans without an escrow/impound
account.
. Notification to mortgagors and New Century of all delinquent property
taxes.
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Hazard Insurance Maintenance
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. Payment of homeowners and flood premiums by due dates for all loans with an
escrow/impound account except for first year policy to be collected and
paid at closing.
. Notification to mortgagors to obtain required insurances if cancellation
notice is received.
. Forced placement of hazard and flood insurance under Comerica's insurance
carrier on all loans with cancellation or non-renewal.
. Endorsement of all insurance claim reimbursements according to procedures
followed for other loans serviced.
Escrow/Impound Accounts
-----------------------
. Interest paid on all escrow/impound accounts according to state law.
. Annual escrow analysis performed in accordance with Comerica's method for
all other loans serviced.
. Notification as required by RESPA to customers of payment changes.
. An escrow analysis may be performed within 60 days if the escrow/impound
account is not closed per RESPA guidelines. The error rate is not to exceed
1% without fee charges.
COMERICA MORTGAGE CORPORATION NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------- ----------------------------
Xxxxxx Xxxxx Xxxx X. Xxxxxxx
First Vice President Chief Executive Officer
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ATTACHMENT B - ____
SPECIAL SERVICING DUTIES
This Attachment is dated as of September 15, 1997, and is attached to Addendum
"B" (the "Addendum") to Sub-Servicing Agreement (the "Agreement") by and between
New Century Mortgage Corporation ("New Century") and Comerica Mortgage
Corporation ("Comerica") and survives any amendment or modification to the
Agreement or the Addendum.
Capitalized terms used in this Attachment shall have the meeting attributed to
them in the Agreement.
This Attachment sets forth the special servicing duties required of Comerica in
regard to Mortgage Loans covered by a certain [Pooling or Servicing] Agreement
dated _______________ by and among New Century, ________________________________
________________________ and ___________________________________________________
The following Servicing Duties shall be applicable to the forgoing Mortgage
Loans and shall be in addition to and/or supersede the servicing duties
specified in the Addendum:
COMERICA MORTGAGE CORPORATION NEW CENTURY MORTGAGE CORPORATION
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxxxx
------------------------- ----------------------------
Xxxxxx Xxxxx Xxxx X. Xxxxxxx
First Vice President Chief Executive Officer
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EXHIIBIT "A"
FEE SCHEDULE
MONTHLY FEE $ 8.50 per loan
BOARDING FEE
Manual boarding $34.00 per loan
Automated boarding (to be negotiated - not to exceed
$10 per loan)
DEBOARDING FEE
For servicing released loan
$10.00 per loan
For servicing released loans for which
monthly payments are more than five (5)
months delinquent $50.00 per loan
TAX SERVICE FEE $75.00 per loan
(First American Real Estate Tax Service)
(May increase upon ninety (90) day notice)
FLOOD INSURANCE FEE
Certification fee ($ and company to be determined)
Life-of-loan coverage ($ and company to be determined)
SERVICING SYSTEM MODIFICATIONS
In addition to all other fees provided herein, Comerica shall be entitled to
reimbursement for all expenses, both out-of-pocket and internal, it may incur to
modify or make additions to its servicing system at the request of New Century
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TERMINATION FEES
OUT OF POCKET
TERMINATION TRANSFER
REASON FEE REIMBURSEMENT NOTICE
------ --- ------------- ------
1. Without cause by 1-36 Months All Costs 180 Days
New Century (All 10 x Monthly fee/per
or partial loans) or loan All Costs 180 Days
without 180 day
notice
2. Without cause by 1-36 Months All Costs 180 Days
related Third Party 10 x Monthly fee/per
(investor, insurers, loan All Costs 180 Days
rating agency, etc.)
(All or partial loans)
3. With cause by New Century $10 per loan Negotiated 60 Days after cure
(under reasonable cure expiration
provisions)
4. New Century Terminated 1-36 Months All Costs 90 Days
with/without cause affecting 10 x Monthly fee/per All Costs 90 Days
CMC Servicing Contract loan
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