Exhibit 99.2
EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
between
EMC MORTGAGE CORPORATION
as Mortgage Loan Seller
and
STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.
as Purchaser
Dated as of
September 30, 2004
TABLE OF CONTENTS
Page
i
Section 1. Definitions...................................................2
Section 2. Purchase and Sale of the Mortgage Loans and Related
Rights........................................................4
Section 3. Mortgage Loan Schedules.......................................4
Section 4. Mortgage Loan Transfer........................................5
Section 5. Examination of Mortgage Files.................................6
Section 6. Recordation of Assignments of Mortgage........................8
Section 7. Representations and Warranties of Mortgage Loan Seller
Concerning the Mortgage Loans................................10
Section 8. Representations and Warranties Concerning the Mortgage
Loan Seller..................................................14
Section 9. Representations and Warranties Concerning the Purchaser......16
Section 10. Conditions to Closing........................................17
Section 11. Fees and Expenses............................................19
Section 12. Accountants' Letters.........................................20
Section 13. Indemnification..............................................20
Section 14. Notices......................................................22
Section 15. Transfer of Mortgage Loans...................................22
Section 16. Termination..................................................23
Section 17. Representations, Warranties and Agreements to Survive
Delivery.....................................................23
Section 18. Severability.................................................23
Section 19. Counterparts.................................................23
Section 20. Amendment....................................................23
Section 21. GOVERNING LAW................................................23
Section 22. Further Assurances...........................................23
Section 23. Successors and Assigns.......................................23
Section 24. The Mortgage Loan Seller.....................................24
Section 25. Entire Agreement.............................................24
Section 26. No Partnership...............................................24
24
MORTGAGE LOAN PURCHASE AGREEMENT
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of September 30, 2004,
as amended and supplemented by any and all amendments hereto (collectively,
the "Agreement"), by and between EMC MORTGAGE CORPORATION, a Delaware
corporation (the "Mortgage Loan Seller") and STRUCTURED ASSET MORTGAGE
INVESTMENTS II INC., a Delaware corporation (the "Purchaser").
Upon the terms and subject to the conditions of this Agreement,
the Mortgage Loan Seller agrees to sell, and the Purchaser agrees to
purchase, certain conventional, first lien mortgage loans secured primarily
by one- to four-family residential properties and individual condominium
units (collectively, the "Mortgage Loans") as described herein. The Purchaser
has established MortgageIT Trust 2004-1, a Delaware statutory trust (the
"Issuer") pursuant to a Trust Agreement, dated as of September 22, 2004, as
amended and restated on September 30, 2004, among the Purchaser, the Issuer
and Xxxxx Fargo Bank, National Association, as certificate registrar and
certificate paying agent. The Purchaser intends to sell the Mortgage Loans to
the Issuer pursuant to a Sale and Servicing Agreement, dated as of September
30, 2004 among the Purchaser, the Issuer, the Mortgage Loan Seller, Deutsche
Bank National Trust Company, as indenture trustee (the "Indenture Trustee")
and Xxxxx Fargo Bank, National Association, as securities administrator (in
such capacity the "Securities Administrator") and as master servicer (in such
capacity the "Master Servicer"). The Issuer, pursuant to an Indenture, dated
as of September 30, 2004 (the "Indenture") among the Issuer, the Indenture
Trustee and the Securities Administrator, intends to pledge the Mortgage
Loans to the Indenture Trustee and, issue and transfer to the Purchaser the
MortgageIT Trust 2004-1, Mortgage-Backed Notes, Series 2004-1 and the
Certificates issued pursuant to the Trust Agreement (the "Certificates").
The Certificates will be transferred by the Purchaser to the Mortgage Loan
Seller as partial consideration for the sale of the Mortgage Loans. The
Master Servicer will master service the Mortgage Loans on behalf of the
Issuer, pursuant to the Sale and Servicing Agreement. Primary servicing of
the Mortgage Loans will be provided by MortgageIT Holdings, Inc. (the
"Servicer") pursuant to a Purchase, Warranties and Servicing Agreement, dated
as of September 1, 2004 (the "MortgageIT Servicing Agreement") between the
Mortgage Loan Seller and the Servicer which (other than with respect to
certain rights of the Mortgage Loan Seller against the Servicer) will be
assigned to the Issuer on the Closing Date.
The Purchaser has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (Number
333-115122) relating to its Mortgage-Backed Notes and the offering of certain
series thereof (including certain classes of the Notes) from time to time in
accordance with Rule 415 under the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder (the
"Securities Act"). Such registration statement, when it became effective
under the Securities Act, and the prospectus relating to the public offering
of certain classes of the Notes by the Purchaser (the "Public Offering"), as
each may be amended or supplemented from time to time pursuant to the
Securities Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus," respectively. The "Prospectus Supplement"
shall mean that supplement, dated September 28, 2004 to the Prospectus, dated
May 14, 2004, relating to certain classes of the Notes. With respect to the
Public Offering of certain classes of the Notes, the Purchaser, Bear, Xxxxxxx
& Co. Inc. ("Bear Xxxxxxx") and UBS Securities LLC ("UBS"; together with Bear
Xxxxxxx, the "Underwriters") have entered into a terms agreement dated as of
September 28, 2004 to an underwriting agreement dated December 30, 2003,
between the Purchaser and Bear Xxxxxxx (collectively, the "Underwriting
Agreement").
Now, therefore, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
Section 1...Definitions. Certain terms are defined herein. Capitalized terms
used herein but not defined herein shall have the meanings specified in
Appendix A to the Indenture. The following other terms are defined as follows:
Acquisition Price: Cash in an amount equal to $______ (plus
$______ in accrued interest)(1).
Bear Xxxxxxx: Bear, Xxxxxxx & Co. Inc.
Closing Date: September 30, 2004.
Custodian: Deutsche Bank National Trust Company.
Cut-off Date: September 1, 2004.
Cut-off Date Balance: $811,228,608.17.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced
by a Substitute Mortgage Loan.
Due Date: With respect to each Mortgage Loan, the date in each
month on which its scheduled payment is due if such due date is the first day
of a month and otherwise is deemed to be the first day of the following month
or such other date specified in the MortgageIT Servicing Agreement.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Master Servicer: Xxxxx Fargo Bank, National Association.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware,
or any successor thereto.
MERS® System: The system of recording transfers of Mortgages
electronically maintained by MERS.
Moody's: Xxxxx'x Investors Service, Inc., or its successors in
interest.
Mortgage: The mortgage or deed of trust creating a first lien on
an interest in real property securing a Mortgage Note.
Mortgage File: The items referred to in Exhibit 1 pertaining to a
particular Mortgage Loan and any additional documents required to be added to
such documents pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne by a
Mortgage Note as stated therein.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for
such Mortgage Loan less the sum of the (x) Servicing Fee Rate and (y) Master
Servicing Fee Rate, in each case, expressed as a per annum rate.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Mortgage Loan Seller or the Purchaser, reasonably acceptable
to the Indenture Trustee.
Person: Any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Purchase Price: With respect to any Mortgage Loan (or any
property acquired with respect thereto) required to be repurchased by the
Mortgage Loan Seller pursuant to this Agreement, an amount equal to the sum
of (i)(a) 100% of the Outstanding Principal Balance of such Mortgage Loan as
of the date of repurchase (or if the related Mortgaged Property was acquired
with respect thereto, 100% of the Outstanding Principal Balance at the date
of the acquisition), plus (b) accrued but unpaid interest on the Outstanding
Principal Balance at the related Mortgage Interest Rate, through and
including the last day of the month of repurchase, plus (c) any unreimbursed
Monthly Advances and servicing advances payable to the Servicer with respect
to such Mortgage Loan and (ii) any costs and damages (if any) incurred by the
Trust in connection with any violation of such Mortgage Loan of any predatory
lending laws.
Rating Agencies: Standard & Poor's and Moody's, each a "Rating
Agency."
Securities Act: The Securities Act of 1933, as amended.
Security Instrument: A written instrument creating a valid first
lien on a Mortgaged Property securing a Mortgage Note, which may be any
applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies, Inc. or its successors in interest.
Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan, which is tendered to the Indenture Trustee or the
Custodian on its behalf pursuant to this Agreement and Section 2.04 of the
Sale and Servicing Agreement, (i) which has an Outstanding Principal Balance
not greater nor materially less than the Mortgage Loan for which it is to be
substituted; (ii) which has a Mortgage Interest Rate and Net Rate not less
than, and not materially greater than, such Mortgage Loan; (iii) which has a
maturity date not materially earlier or later than such Mortgage Loan and not
later than the latest maturity date of any Mortgage Loan; (iv) which is of
the same property type and occupancy type as such Mortgage Loan; (v) which
has a Loan-to-Value Ratio not greater than the Loan-to-Value Ratio of such
Mortgage Loan; (vi) which is current in payment of principal and interest as
of the date of substitution; (vii) as to which the payment terms do not vary
in any material respect from the payment terms of the Mortgage Loan for which
it is to be substituted and (viii) which has a Gross Margin, Periodic Rate
Cap and Maximum Lifetime Mortgage Rate no less than those of such Mortgage
Loan, has the same Index and interval between Interest Adjustment Dates as
such Mortgage Loan, and a Minimum Lifetime Mortgage Rate no lower than that
of such Mortgage Loan. Upon such substitution, such mortgage loan shall be a
"Mortgage Loan" hereunder.
Value: The value of the Mortgaged Property at the time of
origination of the related Mortgage Loan, such value being the lesser of (i)
the value of such property set forth in an appraisal accepted by the
applicable originator of the Mortgage Loan or (ii) the sales price of such
property at the time of origination.
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(1) Please contact Bear, Xxxxxxx & Co. Inc. for Acquisition Price.
Section 2...Purchase and Sale of the Mortgage Loans and Related Rights.
(a) Upon satisfaction of the conditions set forth in Section 10 hereof, the
Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.
(b) The closing for the purchase and sale of the Mortgage Loans and the
closing for the issuance of the Notes will take place on the Closing Date at
the office of the Purchaser's counsel in New York, New York or such other
place as the parties shall agree.
(c) Upon the satisfaction of the conditions set forth in Section 10 hereof,
on the Closing Date, the Purchaser shall pay to the Mortgage Loan Seller the
Acquisition Price for the Mortgage Loans in immediately available funds by
wire transfer to such account or accounts as shall be designated by the
Mortgage Loan Seller and shall deliver the Certificates to, or at the
direction of, the Mortgage Loan Seller.
(d) In addition to the foregoing, on the Closing Date the Mortgage Loan
Seller assigns to the Purchaser all of its right, title and interest in the
MortgageIT Servicing Agreement (other than its right to enforce the
representations and warranties set forth therein).
Section 3...Mortgage Loan Schedules. The Mortgage Loan Seller agrees to
provide to the Purchaser as of the date hereof a preliminary listing of the
Mortgage Loans (the "Preliminary Mortgage Loan Schedule") setting forth the
information listed on Exhibit 2 to this Agreement with respect to each of the
Mortgage Loans being sold by the Mortgage Loan Seller. If there are changes
to the Preliminary Mortgage Loan Schedule, the Mortgage Loan Seller shall
provide to the Purchaser as of the Closing Date a final schedule (the "Final
Mortgage Loan Schedule") setting forth the information listed on Exhibit 2 to
this Agreement with respect to each of the Mortgage Loans being sold by the
Mortgage Loan Seller to the Purchaser. The Final Mortgage Loan Schedule shall
be delivered to the Purchaser on the Closing Date, shall be attached to an
amendment to this Agreement to be executed on the Closing Date by the parties
hereto and shall be in form and substance mutually agreed to by the Mortgage
Loan Seller and the Purchaser (the "Amendment"). If there are no changes to
the Preliminary Mortgage Loan Schedule, the Preliminary Mortgage Loan
Schedule shall be the Final Mortgage Loan Schedule for all purposes hereof.
Section 4...Mortgage Loan Transfer.
(a) The Purchaser will be entitled to all scheduled payments of principal
and interest on the Mortgage Loans due after the Cut-off Date (regardless of
when actually collected) and all payments thereon, other than scheduled
principal and interest due on or before the Cut-off Date but received after
the Cut-off Date. The Mortgage Loan Seller will be entitled to all scheduled
payments of principal and interest on the Mortgage Loans due on or before the
Cut-off Date (including payments collected after the Cut-off Date) and all
payments thereon, other than scheduled principal and interest due after the
Cut-off Date but received on or before the Cut-off Date. Such principal
amounts and any interest thereon belonging to the Mortgage Loan Seller as
described above will not be included in the aggregate outstanding principal
balance of the Mortgage Loans as of the Cut-off Date as set forth on the
Final Mortgage Loan Schedule.
(b) Pursuant to the Sale and Servicing Agreement, the Purchaser will sell,
assign and transfer on the Closing Date all of its right, title and interest
in and to the Mortgage Loans to the Issuer and, pursuant to the Indenture,
the Issuer will assign all of its right, title and interest to the Mortgage
Loans to the Indenture Trustee for the benefit of the Noteholders, to secure
the Notes issued pursuant to the Indenture. In connection with such
transfers and assignments of the Mortgage Loans, the Mortgage Loan Seller has
delivered or will deliver or cause to be delivered to the Indenture Trustee,
or the Custodian on its behalf, by the Closing Date or such later date as is
agreed to by the Purchaser and the Mortgage Loan Seller (each of the Closing
Date and such later date is referred to as a "Mortgage File Delivery Date"),
the items of each Mortgage File, provided, however, that in lieu of the
foregoing, the Mortgage Loan Seller may deliver the following documents,
under the circumstances set forth below: (w) in lieu of the original Security
Instrument (including the Mortgage), assignments to the Indenture Trustee or
intervening assignments thereof which have been delivered, are being
delivered or will, upon receipt of recording information relating to such
documents required to be included thereon, be delivered to recording offices
for recording and have not been returned to the Mortgage Loan Seller in time
to permit their delivery as specified above, the Mortgage Loan Seller may
deliver a true copy thereof with a certification by the Mortgage Loan Seller,
or its agent on its behalf, substantially to the effect that such copy is a
true and correct copy of the original; (x) in lieu of the Security
Instrument, assignments to the Indenture Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such
documents (as evidenced by a certification from the Mortgage Loan Seller to
such effect) the Mortgage Loan Seller may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were
recorded; (y) in lieu of the Mortgage Notes relating to the Mortgage Loans,
each identified in the list delivered by the Purchaser to the Indenture
Trustee on the Closing Date and attached hereto as Exhibit 5, the Mortgage
Loan Seller may deliver lost note affidavits and indemnities of the Mortgage
Loan Seller; and (z) the Mortgage Loan Seller shall not be required to
deliver intervening assignments or Mortgage Note endorsements between the
related Underlying Seller and the Mortgage Loan Seller, between the Mortgage
Loan Seller and the Depositor, between the Depositor and the Issuer and
between the Issuer and the Indenture Trustee; and provided further, however,
that in the case of Mortgage Loans which have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Mortgage Loan Seller, in lieu
of delivering the above documents, may deliver to the Indenture Trustee and
the Custodian a certification by the Mortgage Loan Seller or the Master
Servicer to such effect and shall deposit all amounts paid in respect of such
Mortgage Loans in the Master Servicer Collection Account on the Closing
Date. The Mortgage Loan Seller shall deliver such original documents
(including any original documents as to which certified copies had previously
been delivered) or such certified copies to the Indenture Trustee promptly
after they are received. The Mortgage Loan Seller shall cause the Mortgage
and intervening assignments, if any, and the assignment of the Security
Instrument to be recorded not later than 180 days after the Closing Date,
unless such assignment is not required to be recorded under the terms set
forth in Section 6(a) hereof.
(c) In connection with the assignment of any Mortgage Loan registered on
the MERS® System, the Mortgage Loan Seller further agrees that it will cause,
at the Mortgage Loan Seller's own expense, within 30 days after the Closing
Date, the MERS® System to indicate that such Mortgage Loans have been
assigned by the Mortgage Loan Seller to the Purchaser, by the Purchaser to
the Issuer and by the Issuer to the Indenture Trustee in accordance with this
Agreement for the benefit of the Noteholders by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which identifies
the specific Indenture Trustee and (b) the code in the field "Pool Field"
which identifies the series of the Notes issued in connection with such
Mortgage Loans. The Mortgage Loan Seller further agrees that it will not, and
will not permit any Servicer or the Master Servicer to, and the Master
Servicer agrees that it will not, alter the codes referenced in this
paragraph with respect to any Mortgage Loan during the term of the Indenture
unless and until such Mortgage Loan is repurchased in accordance with the
terms of the Sale and Servicing Agreement.
(d) The Mortgage Loan Seller and the Purchaser acknowledge hereunder that
all of the Mortgage Loans and the related servicing will ultimately be
assigned to Deutsche Bank National Trust Company, as Indenture Trustee on
behalf of the Noteholders, on the date hereof.
Section 5...Examination of Mortgage Files.
(a) On or before the Mortgage File Delivery Date, the Mortgage Loan Seller
will have made the Mortgage Files available to the Purchaser or its agent for
examination which may be at the offices of the Indenture Trustee or the
Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian. The fact
that the Purchaser or its agent has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Purchaser's rights to demand cure, repurchase, substitution or other relief
as provided in this Agreement. In furtherance of the foregoing, the Mortgage
Loan Seller shall make the Mortgage Files available to the Purchaser or its
agent from time to time so as to permit the Purchaser to confirm the Mortgage
Loan Seller's compliance with the delivery and recordation requirements of
this Agreement and the Sale and Servicing Agreement. In addition, upon
request of the Purchaser, the Mortgage Loan Seller agrees to provide to the
Purchaser, the Underwriters and to any investors or prospective investors in
the Notes information regarding the Mortgage Loans and their servicing, to
make the Mortgage Files available to the Purchaser, the Underwriters and to
such investors or prospective investors (which may be at the offices of the
Mortgage Loan Seller and/or the Mortgage Loan Seller's custodian) and to make
available personnel knowledgeable about the Mortgage Loans for discussions
with the Purchaser, the Underwriters and such investors or prospective
investors, upon reasonable request during regular business hours, sufficient
to permit the Purchaser, the Underwriters and such investors or potential
investors to conduct such due diligence as any such party reasonably believes
is appropriate.
(b) Pursuant to the Custodial Agreement, on the Closing Date the Custodian,
on behalf of the Indenture Trustee, for the benefit of the Noteholders, will
acknowledge receipt of each Mortgage Loan, by delivery to the Mortgage Loan
Seller, the Purchaser and the Issuer of an initial certification in the form
attached as Exhibit One to the Custodial Agreement.
(c) Pursuant to the Custodial Agreement, within 90 days of the Closing Date
(or, with respect to any Substitute Mortgage Loan, within five Business Days
after the receipt by the Indenture Trustee or Custodian thereof), the
Custodian will review items of the Mortgage Files as set forth on Exhibit 1
and will deliver to the Mortgage Loan Seller, the Purchaser and the Indenture
Trustee an interim certification substantially in the form of Exhibit Two to
the Custodial Agreement. If the Indenture Trustee or Custodian, as its
agent, finds any document listed on Exhibit 1 has not been executed or
received, or is unrelated, determined on the basis of the Mortgagor name,
original principal balance and loan number, to the Mortgage Loans identified
in the Final Mortgage Loan Schedule does not conform on its face to review
criteria specified in Section 2.01 of the Sale and Servicing Agreement (a
"Material Defect"), the Indenture Trustee in accordance with the Sale and
Servicing Agreement or the Custodian, as its agent, shall promptly notify the
Mortgage Loan Seller of such Material Defect. The Mortgage Loan Seller shall
correct or cure any such Material Defect within 90 days from the date of
notice from the Indenture Trustee or the Custodian, as its agent, of the
Material Defect and if the Mortgage Loan Seller fails to correct or cure such
Material Defect within such period and such defect materially and adversely
affects the interests of the Noteholders in the related Mortgage Loan, the
Mortgage Loan Seller will, in accordance with the terms of the Sale and
Servicing Agreement, within 90 days of the date of notice, provide the
Indenture Trustee with a Substitute Mortgage Loan or purchase the related
Mortgage Loan at the applicable Purchase Price; provided, however, that if
such Material Defect relates solely to the inability of the Mortgage Loan
Seller to deliver the original Security Instrument or intervening assignments
thereof, or a certified copy because the originals of such documents, or a
certified copy, have not been returned by the applicable jurisdiction, the
Mortgage Loan Seller shall not be required to purchase such Mortgage Loan if
the Mortgage Loan Seller delivers such original documents or certified copy
promptly upon receipt, but in no event later than 360 days after the Closing
Date. The foregoing repurchase obligation shall not apply in the event that
the Mortgage Loan Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording,
and delivery to the Indenture Trustee or the Custodian, as its agent, shall
be effected by the Mortgage Loan Seller within thirty days of its receipt of
the original recorded document.
(d) Pursuant to the Custodial Agreement, within 180 days of the Closing
Date (or, with respect to any Substitute Mortgage Loan, within five Business
Days after the receipt by the Indenture Trustee or Custodian thereof) the
Custodian will review items of the Mortgage Files as set forth on Exhibit 1
and will deliver to the Mortgage Loan Seller, the Purchaser, the Issuer and
the Indenture Trustee a final certification substantially in the form of
Exhibit Three to the Custodial Agreement. If the Indenture Trustee or
Custodian, as its agent, finds a Material Defect, the Indenture Trustee or
the Custodian, as its agent, shall promptly notify the Mortgage Loan Seller
of such Material Defect. The Mortgage Loan Seller shall correct or cure any
such Material Defect within 90 days from the date of notice from the
Indenture Trustee or the Custodian, as its agent, of the Material Defect and
if the Mortgage Loan Seller fails to correct or cure such Material Defect
within such period and such defect materially and adversely affects the
interests of the Noteholders in the related Mortgage Loan, the Mortgage Loan
Seller will, in accordance with the terms of the Sale and Servicing
Agreement, within 90 days of the date of notice, provide the Indenture
Trustee with a Substitute Mortgage Loan or purchase the related Mortgage Loan
at the applicable Purchase Price; provided, however, that if such Material
Defect relates solely to the inability of the Mortgage Loan Seller to deliver
the original Security Instrument or intervening assignments thereof, or a
certified copy because the originals of such documents, or a certified copy,
have not been returned by the applicable jurisdiction, the Mortgage Loan
Seller shall not be required to purchase such Mortgage Loan if the Mortgage
Loan Seller delivers such original documents or certified copy promptly upon
receipt, but in no event later than 360 days after the Closing Date. The
foregoing repurchase obligation shall not apply in the event that the
Mortgage Loan Seller cannot deliver such original or copy of any document
submitted for recording to the appropriate recording office in the applicable
jurisdiction because such document has not been returned by such office;
provided that the Mortgage Loan Seller shall instead deliver a recording
receipt of such recording office or, if such receipt is not available, a
certificate confirming that such documents have been accepted for recording,
and delivery to the Indenture Trustee or the Custodian, as its agent, shall
be effected by the Mortgage Loan Seller within thirty days of its receipt of
the original recorded document.
(e) At the time of any substitution, the Mortgage Loan Seller shall deliver
or cause to be delivered the Substitute Mortgage Loan, the related Mortgage
File and any other documents and payments required to be delivered in
connection with a substitution pursuant to the Sale and Servicing Agreement.
At the time of any purchase or substitution, the Indenture Trustee in
accordance with the terms of the Sale and Servicing Agreement shall (i)
assign to the Mortgage Loan Seller and cause the Custodian to release the
documents (including, but not limited to, the Mortgage, Mortgage Note and
other contents of the Mortgage File) in the possession of the Custodian
relating to the Deleted Mortgage Loan and (ii) execute and deliver such
instruments of transfer or assignment, in each case without recourse, as
shall be necessary to vest in the Mortgage Loan Seller title to such Deleted
Mortgage Loan.
Section 6...Recordation of Assignments of Mortgage.
(a) The Mortgage Loan Seller shall cause each assignment of the Security
Instrument from the Mortgage Loan Seller to the Indenture Trustee to be
recorded not later than 180 days after the Closing Date, unless (a) such
recordation is not required by the Rating Agencies or an Opinion of Counsel
has been provided to the Indenture Trustee (with a copy to the Custodian)
which states that the recordation of such assignments is not necessary to
protect the interests of the Noteholders in the related Mortgage Loans or (b)
MERS is identified on the Mortgage or a properly recorded assignment of the
Mortgage, as the Mortgagee of record solely as nominee for the Mortgage Loan
Seller and its successors and assigns; provided, however, notwithstanding the
foregoing, each assignment shall be submitted for recording by the Mortgage
Loan Seller in the manner described above, at no expense to the Issuer or the
Indenture Trustee, upon the earliest to occur of (i) reasonable direction by
the Holders of Notes aggregating at least 25% of the Note Principal Balance
of the Notes, (ii) the occurrence of a Master Servicer Event of Default or an
Event of Default, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Mortgage Loan Seller and (iv) the occurrence of a
servicing transfer as described in Section 6.02 of the Sale and Servicing
Agreement.
While each such Mortgage or assignment is being recorded, if
necessary, the Mortgage Loan Seller shall leave or cause to be left with the
Indenture Trustee a certified copy of such Mortgage or assignment. All
customary recording fees and reasonable expenses relating to the recordation
of the assignments of mortgage to the Indenture Trustee or the Opinion of
Counsel, as the case may be, shall be borne by the Mortgage Loan Seller.
(b) It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Mortgage Loan Seller to the Purchaser, as
contemplated by this Agreement be, and be treated as, a sale. It is, further,
not the intention of the parties that such conveyance be deemed a pledge of
the Mortgage Loans by the Mortgage Loan Seller to the Purchaser to secure a
debt or other obligation of the Mortgage Loan Seller. However, in the event
that, notwithstanding the intent of the parties, the Mortgage Loans are held
by a court to continue to be property of the Mortgage Loan Seller, then (a)
this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the applicable Uniform Commercial Code; (b)
the transfer of the Mortgage Loans provided for herein shall be deemed to be
a grant by the Mortgage Loan Seller to the Purchaser of a security interest
in all of the Mortgage Loan Seller's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans
in accordance with the terms thereof and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities
or other property, to the extent the Purchaser would otherwise be entitled to
own such Mortgage Loans and proceeds pursuant to Section 4 hereof, including
all amounts, other than investment earnings, from time to time held or
invested in any accounts created pursuant to the Indenture or the Sale and
Servicing Agreement, whether in the form of cash, instruments, securities or
other property; (c) the possession by the Purchaser, the Issuer or the
Indenture Trustee of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-313 (or comparable provision) of the
applicable Uniform Commercial Code; and (d) notifications to persons holding
such property, and acknowledgments, receipts or confirmations from persons
holding such property, shall be deemed notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or agents
(as applicable) of the Purchaser for the purpose of perfecting such security
interest under applicable law. Any assignment of the interest of the
Purchaser pursuant to any provision hereof or pursuant to the Sale and
Servicing Agreement and any subsequent assignment pursuant to the Indenture
shall also be deemed to be an assignment of any security interest created
hereby. The Mortgage Loan Seller and the Purchaser shall, to the extent
consistent with this Agreement, take such actions as may be reasonably
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be
a perfected security interest of first priority under applicable law and will
be maintained as such throughout the term of the Indenture.
Section 7...Representations and Warranties of Mortgage Loan Seller Concerning
the Mortgage Loans. The Mortgage Loan Seller hereby represents and warrants
to the Purchaser as of the Closing Date or such other date as may be
specified below with respect to each Mortgage Loan being sold by it:
(i) the information set forth in the Mortgage Loan Schedule hereto is true
and correct in all material respects and the information provided to
the Rating Agencies, including the Mortgage Loan level detail, is true
and correct according to the Rating Agencies' requirements;
(ii) immediately prior to the transfer to the Purchaser, the Mortgage Loan
Seller was the sole owner of beneficial title and holder of each
Mortgage and Mortgage Note relating to the Mortgage Loans and is
conveying the same free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature and the Mortgage Loan Seller has full
right and authority to sell or assign the same pursuant to this
Agreement;
(iii) Each Mortgage Loan at the time it was made complied in all material
respects with all applicable laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording
laws and all predatory lending laws; and each Mortgage Loan has been
serviced in all material respects in accordance with all applicable
laws and regulations, including, without limitation, usury, equal
credit opportunity, disclosure and recording laws and all predatory
lending laws and the terms of the related Mortgage Note, the Mortgage
and other loan documents;
(iv) there is no monetary default existing under any Mortgage or the related
Mortgage Note and there is no material event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a default, breach or event of acceleration; and
neither the Mortgage Loan Seller, any of its affiliates nor any
servicer of any related Mortgage Loan has taken any action to waive any
default, breach or event of acceleration; no foreclosure action is
threatened or has been commenced with respect to the Mortgage Loan;
(v) the terms of the Mortgage Note and the Mortgage have not been impaired,
waived, altered or modified in any respect, except by written
instruments, (i) if required by law in the jurisdiction where the
Mortgaged Property is located, or (ii) to protect the interests of the
Indenture Trustee on behalf of the Noteholders;
(vi) no selection procedure reasonably believed by the Mortgage Loan Seller
to be adverse to the interests of the Noteholders was utilized in
selecting the Mortgage Loans;
(vii) each Mortgage is a valid and enforceable first lien on the property
securing the related Mortgage Note and each Mortgaged Property is owned
by the Mortgagor in fee simple (except with respect to common areas in
the case of condominiums, PUDs and de minimis PUDs) or by leasehold for
a term longer than the term of the related Mortgage, subject only to
(i) the lien of current real property taxes and assessments, (ii)
covenants, conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of such
Mortgage, such exceptions being acceptable to mortgage lending
institutions generally or specifically reflected in the appraisal
obtained in connection with the origination of the related Mortgage
Loan or referred to in the lender's title insurance policy delivered to
the originator of the related Mortgage Loan and (iii) 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
such Mortgage;
(viii) there is no mechanics' lien or claim for work, labor or material
affecting the premises subject to any Mortgage which is or may be a
lien prior to, or equal with, the lien of such Mortgage except those
which are insured against by the title insurance policy referred to in
(xiii) below;
(ix) as of the Closing Date, to the best of the Mortgage Loan Seller's
knowledge, there was no delinquent tax or assessment lien against the
property subject to any Mortgage, except where such lien was being
contested in good faith and a stay had been granted against levying on
the property;
(x) there is no valid offset, defense or counterclaim to any Mortgage Note
or Mortgage, including the obligation of the Mortgagor to pay the
unpaid principal and interest on such Mortgage Note;
(xi) to the best of the Mortgage Loan Seller's knowledge, except to the
extent insurance is in place which will cover such damage, the physical
property subject to any Mortgage is free of material damage and is in
good repair and there is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property;
(xii) to the best of the Mortgage Loan Seller's knowledge, the Mortgaged
Property and all improvements thereon comply with all requirements of
any applicable zoning and subdivision laws and ordinances;
(xiii) a lender's title insurance policy (on an ALTA or CLTA form) or
binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to Xxxxxx Xxx or Xxxxxxx
Mac, was issued on the date that each Mortgage Loan was created by a
title insurance company which, to the best of the Mortgage Loan
Seller's knowledge, was qualified to do business in the jurisdiction
where the related Mortgaged Property is located, insuring the Mortgage
Loan Seller and its successors and assigns that the Mortgage is a first
priority lien on the related Mortgaged Property in the original
principal amount of the Mortgage Loan. The Mortgage Loan Seller is the
sole insured under such lender's title insurance policy, and such
policy, binder or assurance is valid and remains in full force and
effect, and each such policy, binder or assurance shall contain all
applicable endorsements including a negative amortization endorsement,
if applicable;
(xiv) at the time of origination, each Mortgaged Property was the subject of
an appraisal which conformed to the underwriting requirements of the
originator of the Mortgage Loan and, the appraisal is in a form
acceptable to Xxxxxx Mae or FHLMC;
(xv) as of the Closing Date, the improvements on each Mortgaged Property
securing a Mortgage Loan is insured (by an insurer which is acceptable
to the Mortgage Loan Seller) against loss by fire and such hazards as
are covered under a standard extended coverage endorsement in the
locale in which the Mortgaged Property is located, in an amount which
is not less than the lesser of the maximum insurable value of the
improvements securing such Mortgage Loan or the outstanding principal
balance of the Mortgage Loan, but in no event in an amount less than an
amount that is required to prevent the Mortgagor from being deemed to
be a co-insurer thereunder; if the improvement on the Mortgaged
Property is a condominium unit, it is included under the coverage
afforded by a blanket policy for the condominium project; if upon
origination of the related Mortgage Loan, the improvements on the
Mortgaged Property were in an area identified as a federally designated
flood area, a flood insurance policy is in effect in an amount
representing coverage not less than the least of (i) the outstanding
principal balance of the Mortgage Loan, (ii) the restorable cost of
improvements located on such Mortgaged Property or (iii) the maximum
coverage available under federal law; and each Mortgage obligates the
Mortgagor thereunder to maintain the insurance referred to above at the
Mortgagor's cost and expense;
(xvi) none of the Mortgage Loans are secured by an interest in a leasehold
estate;
(xvii) each Mortgage Loan was originated or funded by (a) a savings and
loan association, savings bank, commercial bank, credit union,
insurance company or similar institution which is supervised and
examined by a federal or state authority (or originated by (i) a
subsidiary of any of the foregoing institutions which subsidiary is
actually supervised and examined by applicable regulatory authorities
or (ii) a mortgage loan correspondent of any of the foregoing and that
was originated pursuant to the criteria established by any of the
foregoing) or (b) a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National
Housing Act, as amended;
(xviii) none of the Mortgage Loans are loans subject to 12 CFR Part
226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of Regulation Z, the
regulation implementing TILA, which implements the Home Ownership and
Equity Protection Act of 1994, as amended;
(xix) the information set forth in Schedule A of the Prospectus Supplement
with respect to the Mortgage Loans is true and correct in all material
respects;
(xx) no Mortgage Loan is a "high cost loan" or "covered loan" as applicable
(as such terms are defined in Standard & Poor's LEVELS® Glossary,
Version 5.6 Revised, Appendix E, attached hereto as Exhibit 6) and no
Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the "Georgia Fair Lending Act";
(xxi) each Mortgage Loan was originated in accordance with the underwriting
guidelines of the related originator;
(xxii) each original Mortgage has been recorded or is in the process of
being recorded in accordance with the requirements of Section 2.01 of
the Sale and Servicing Agreement in the appropriate jurisdictions
wherein such recordation is required to perfect the lien thereof for
the benefit of the Trust Fund;
(xxiii) the related Mortgage File contains each of the documents and
instruments listed in Section 2.01 of the Sale and Servicing Agreement,
subject to any exceptions, substitutions and qualifications as are set
forth in such Section;
(xxiv) the Mortgage Loans are currently being serviced in accordance
with accepted servicing practices;
(xxv) at the time of origination, each Mortgaged Property was the subject of
an appraisal which conformed to the underwriting requirements of the
originator of the Mortgage Loan, and the appraisal is in a form which
was acceptable to Xxxxxx Xxx or FHLMC at the time of origination;
(xxvi) none of the Mortgage Loans originated on or after October 1, 2002
and before March 7, 2003 was secured by property located in the State
of Georgia; and
(xxvii) no Mortgage Loan in the is a "high cost home," "covered"
(excluding home loans defined as "covered home loans" in the New Jersey
Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home" or "predatory"
loan under any applicable state, federal 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).
It is understood and agreed that the representations and
warranties set forth in this Section 7 will inure to the benefit of the
Purchaser, its successors and assigns, notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or assignment of Mortgage or the
examination of any Mortgage File. Upon any substitution for a Mortgage Loan,
the representations and warranties set forth above shall be deemed to be made
by the Mortgage Loan Seller as to any Substitute Mortgage Loan as of the date
of substitution.
Upon discovery or receipt of notice by the Mortgage Loan Seller,
the Purchaser, the Issuer or the Indenture Trustee of a breach of any
representation or warranty of the Mortgage Loan Seller set forth in this
Section 7 which materially and adversely affects the value of the interests
of the Purchaser, the Issuer, the Noteholders or the Indenture Trustee in any
of the Mortgage Loans delivered to the Purchaser pursuant to this Agreement,
the party discovering or receiving notice of such breach shall give prompt
written notice to the others. It is understood and agreed that a breach of
the representation contained in clause (xvii) above will be deemed to
materially adversely affect the interests of the Noteholders. In the case of
any such breach of a representation or warranty set forth in this Section 7,
within 90 days from the date of discovery by the Mortgage Loan Seller, or the
date the Mortgage Loan Seller is notified by the party discovering or
receiving notice of such breach (whichever occurs earlier), the Mortgage Loan
Seller will (i) cure such breach in all material respects, (ii) purchase the
affected Mortgage Loan at the applicable Purchase Price or (iii) substitute a
qualifying Substitute Mortgage Loan in exchange for such Mortgage Loan. The
obligations of the Mortgage Loan Seller to cure, purchase or substitute a
qualifying Substitute Mortgage Loan shall constitute the Purchaser's, the
Issuer's, the Indenture Trustee's and the Noteholder's sole and exclusive
remedy under this Agreement or otherwise respecting a breach of
representations or warranties hereunder with respect to the Mortgage Loans,
except for the obligation of the Mortgage Loan Seller to indemnify the
Purchaser for such breach as set forth in and limited by Section 13 hereof.
Any cause of action against the Mortgage Loan Seller or relating
to or arising out of a breach by the Mortgage Loan Seller of any
representations and warranties made in this Section 7 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Mortgage Loan Seller
or notice thereof by the party discovering such breach and (ii) failure by
the Mortgage Loan Seller to cure such breach, purchase such Mortgage Loan or
substitute a qualifying Substitute Mortgage Loan pursuant to the terms hereof.
Section 8. Representations and Warranties Concerning the Mortgage Loan
Seller. As of the date hereof and as of the Closing Date, the Mortgage Loan
Seller represents and warrants to the Purchaser as to itself in the capacity
indicated as follows:
(a) the Mortgage Loan Seller (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and
(ii) is qualified and in good standing to do business in each jurisdiction
where such qualification is necessary, except where the failure so to qualify
would not reasonably be expected to have a material adverse effect on the
Mortgage Loan Seller's business as presently conducted or on the Mortgage
Loan Sellers ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Mortgage Loan Seller has full power to own its property, to carry
on its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Mortgage Loan Seller of this
Agreement have been duly authorized by all necessary action on the part of
the Mortgage Loan Seller; and neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof, will conflict with or result in a
breach of, or constitute a default under, any of the provisions of any law,
governmental rule, regulation, judgment, decree or order binding on the
Mortgage Loan Seller or its properties or the charter or by-laws of the
Mortgage Loan Seller, except those conflicts, breaches or defaults which
would not reasonably be expected to have a material adverse effect on the
Mortgage Loan Seller's ability to enter into this Agreement and to consummate
the transactions contemplated hereby;
(d) the execution, delivery and performance by the Mortgage Loan Seller of
this Agreement and the consummation of the transactions contemplated hereby
do not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except those
consents, approvals, notices, registrations or other actions as have already
been obtained, given or made and, in connection with the recordation of the
Mortgages, powers of attorney or assignments of Mortgages not yet completed;
(e) this Agreement has been duly executed and delivered by the Mortgage
Loan Seller and, assuming due authorization, execution and delivery by the
Purchaser, constitutes a valid and binding obligation of the Mortgage Loan
Seller enforceable against it in accordance with its terms (subject to
applicable bankruptcy and insolvency laws and other similar laws affecting
the enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the knowledge
of the Mortgage Loan Seller, threatened against the Mortgage Loan Seller,
before or by any court, administrative agency, arbitrator or governmental
body (i) with respect to any of the transactions contemplated by this
Agreement or (ii) with respect to any other matter which in the judgment of
the Mortgage Loan Seller will be determined adversely to the Mortgage Loan
Seller and will if determined adversely to the Mortgage Loan Seller
materially and adversely affect the Mortgage Loan Seller's ability to perform
its obligations under this Agreement; and the Mortgage Loan Seller is not in
default with respect to any order of any court, administrative agency,
arbitrator or governmental body so as to materially and adversely affect the
transactions contemplated by this Agreement; and
(g) the Mortgage Loan Seller's Information (as defined in Section 13(a)
hereof) does not include any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading.
Section 9. Representations and Warranties Concerning the Purchaser. As of
the date hereof and as of the Closing Date, the Purchaser represents and
warrants to the Mortgage Loan Seller as follows:
(a) the Purchaser (i) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and (ii) is
qualified and in good standing as a foreign corporation to do business in
each jurisdiction where such qualification is necessary, except where the
failure to so qualify would not reasonably be expected to have a material
adverse effect on the Purchaser's business as presently conducted or on the
Purchaser's ability to enter into this Agreement and to consummate the
transactions contemplated hereby;
(b) the Purchaser has full corporate power to own its property, to carry on
its business as presently conducted and to enter into and perform its
obligations under this Agreement;
(c) the execution and delivery by the Purchaser of this Agreement have been
duly authorized by all necessary corporate action on the part of the
Purchaser; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of any law, governmental rule,
regulation, judgment, decree or order binding on the Purchaser or its
properties or the articles of incorporation or by-laws of the Purchaser,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Purchaser's ability to
enter into this Agreement and to consummate the transactions contemplated
hereby;
(d) the execution, delivery and performance by the Purchaser of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given
or made;
(e) this Agreement has been duly executed and delivered by the Purchaser
and, assuming due authorization, execution and delivery by the Mortgage Loan
Seller, constitutes a valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally);
(f) there are no actions, suits or proceedings pending or, to the knowledge
of the Purchaser, threatened against the Purchaser, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to
any of the transactions contemplated by this Agreement or (ii) with respect
to any other matter which in the judgment of the Purchaser will be determined
adversely to the Purchaser and will if determined adversely to the Purchaser
materially and adversely affect the Purchaser's ability to perform its
obligations under this Agreement; and the Purchaser is not in default with
respect to any order of any court, administrative agency, arbitrator or
governmental body so as to materially and adversely affect the transactions
contemplated by this Agreement; and
(g) the Purchaser's Information (as defined in Section 13(b) hereof) does
not include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 10. Conditions to Closing.
(a) The obligations of the Purchaser under this Agreement will be subject
to the satisfaction, on or prior to the Closing Date, of the following
conditions:
(1) Each of the obligations of the Mortgage Loan Seller required to be
performed at or prior to the Closing Date pursuant to the terms of this
Agreement shall have been duly performed and complied with in all
material respects; all of the representations and warranties of the
Mortgage Loan Seller under this Agreement shall be true and correct as
of the date or dates specified in all material respects; and no event
shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement or the Sale and Servicing
Agreement; and the Purchaser shall have received certificates to that
effect signed by authorized officers of the Mortgage Loan Seller.
(2) The Purchaser shall have received all of the following closing
documents, in such forms as are agreed upon and reasonably acceptable
to the Purchaser, duly executed by all signatories (other than the
Purchaser) as required pursuant to the respective terms thereof:
(i) If required pursuant to Section 3 hereof, the Amendment dated as of
the Closing Date and any documents referred to therein;
(ii) If required pursuant to Section 3 hereof, the Final Mortgage Loan
Schedule containing the information set forth on Exhibit 2 hereto, one
copy to be attached to each counterpart of the Amendment;
(iii) The Trust Agreement, in form and substance reasonably satisfactory to
the Purchaser, and all documents required thereby duly executed by all
signatories;
(iv) The Sale and Servicing Agreement, in form and substance reasonably
satisfactory to the Indenture Trustee, the Issuer and the Purchaser,
and all documents required thereby duly executed by all signatories;
(v) The Indenture, in form and substance reasonably satisfactory to the
Indenture Trustee, the Issuer and the Purchaser, and all documents
required thereby duly executed by all signatories;
(vi) A certificate of an officer of the Mortgage Loan Seller dated as of the
Closing Date, in a form reasonably acceptable to the Purchaser, and
attached thereto the resolutions of the Mortgage Loan Seller
authorizing the transactions contemplated by this Agreement, together
with copies of the charter and by-laws of the Mortgage Loan Seller;
(vii) One or more opinions of counsel from the Mortgage Loan Seller's counsel
otherwise in form and substance reasonably satisfactory to the
Purchaser, the Issuer, the Indenture Trustee and each Rating Agency;
(viii) A letter from each of the Rating Agencies giving each Class of
Notes set forth on Schedule A the rating set forth on Schedule A; and
(ix) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended ratings from each Rating Agency for
the Notes.
(3) The Notes to be sold to the Underwriters pursuant to the Underwriting
Agreement shall have been issued and sold to the Underwriters.
(4) The Mortgage Loan Seller shall have furnished to the Purchaser such
other certificates of its officers or others and such other documents
and opinions of counsel to evidence fulfillment of the conditions set
forth in this Agreement and the transactions contemplated hereby as the
Purchaser and its counsel may reasonably request.
(b) The obligations of the Mortgage Loan Seller under this Agreement shall
be subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(1) The obligations of the Purchaser required to be performed by it on or
prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects,
and all of the representations and warranties of the Purchaser under
this Agreement shall be true and correct in all material respects as of
the date hereof and as of the Closing Date, and no event shall have
occurred which would constitute a breach by it of the terms of this
Agreement, and the Mortgage Loan Seller shall have received a
certificate to that effect signed by an authorized officer of the
Purchaser.
(2) The Mortgage Loan Seller shall have received copies of all of the
following closing documents, in such forms as are agreed upon and
reasonably acceptable to the Mortgage Loan Seller, duly executed by all
signatories other than the Mortgage Loan Seller as required pursuant to
the respective terms thereof:
(i) If required pursuant to Section 3 hereof, the Amendment dated as of
the Closing Date and any documents referred to therein;
(ii) The Trust Agreement, in form and substance reasonably satisfactory to
the Mortgage Loan Seller, and all documents required thereby duly
executed by all signatories;
(iii) The Sale and Servicing Agreement, in form and substance reasonably
satisfactory to the Mortgage Loan Seller, and all documents required
thereby duly executed by all signatories;
(iv) The Indenture, in form and substance reasonably satisfactory to the
Mortgage Loan Seller, and all documents required thereby duly executed
by all signatories;
(v) A certificate of an officer of the Purchaser dated as of the Closing
Date, in a form reasonably acceptable to the Mortgage Loan Seller, and
attached thereto the resolutions of the Purchaser authorizing the
transactions contemplated by this Agreement and the Sale and Servicing
Agreement, together with copies of the Purchaser's articles of
incorporation, and evidence as to the good standing of the Purchaser
dated as of a recent date;
(vi) One or more opinions of counsel from the Purchaser's counsel in form
and substance reasonably satisfactory to the Mortgage Loan Seller; and
(vii) Such other documents, certificates (including additional
representations and warranties) and opinions as may be reasonably
necessary to secure the intended rating from each Rating Agency for the
Notes;
(3) The Certificates shall have been transferred to, or at the direction
of, the Mortgage Loan Seller.
Section 11. Fees and Expenses. Subject to Section 16 hereof, the Mortgage
Loan Seller shall pay on the Closing Date or such later date as may be agreed
to by the Purchaser (i) the fees and expenses of the Mortgage Loan Seller's
attorneys and the reasonable fees and expenses of the Purchaser's attorneys,
(ii) the fees and expenses of Deloitte & Touche LLP, (iii) the fee for the
use of Purchaser's Registration Statement based on the aggregate original
principal amount of the Certificates and the filing fee of the Commission as
in effect on the date on which the Registration Statement was declared
effective, (iv) the fees and expenses including counsel's fees and expenses
in connection with any "blue sky" and legal investment matters, (v) the fees
and expenses of the Indenture Trustee which shall include without limitation
the fees and expenses of the Indenture Trustee (and the fees and
disbursements of its counsel) with respect to (A) legal and document review
of this Agreement, the Trust Agreement, the Indenture, the Sale and Servicing
Agreement, the Notes and related agreements, (B) attendance at the Closing
and (C) review of the Mortgage Loans to be performed by the Custodian, (vi)
the expenses for printing or otherwise reproducing the Notes, the Prospectus
and the Prospectus Supplement, (vii) the fees and expenses of each Rating
Agency (both initial and ongoing), (viii) the fees and expenses relating to
the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete
chain of title from the originator to the Indenture Trustee) from the
Mortgage Loan Seller to the Indenture Trustee or the expenses relating to the
Opinion of Counsel referred to in Section 6(a) hereof, as the case may be,
and (ix) Mortgage File due diligence expenses and other out-of-pocket
expenses incurred by the Purchaser in connection with the purchase of the
Mortgage Loans and by Bear Xxxxxxx in connection with the sale of the Notes.
The Mortgage Loan Seller additionally agrees to pay directly to any third
party on a timely basis the fees provided for above which are charged by such
third party and which are billed periodically.
Section 12. Accountants' Letters.
(a) Deloitte & Touche LLP will review the characteristics of a sample of
the Mortgage Loans described in the Final Mortgage Loan Schedule and will
compare those characteristics to the description of the Mortgage Loans
contained in the Prospectus Supplement under the captions "Summary of
Prospectus Supplement-The Mortgage Loans" and "The Mortgage Pool" and in
Schedule A thereto. The Mortgage Loan Seller will cooperate with the
Purchaser in making available all information and taking all steps reasonably
necessary to permit such accountants to complete the review and to deliver
the letters required of them under the Underwriting Agreement. Deloitte &
Touche LLP will also confirm certain calculations as set forth under the
caption "Yield On The Notes" in the Prospectus Supplement.
(b) To the extent statistical information with respect to the Master
Servicer's or a Servicer's servicing portfolio is included in the Prospectus
Supplement under the caption "The Master Servicer and the Servicer," a letter
from the certified public accountant for the Master Servicer and such
Servicer or Servicers will be delivered to the Purchaser dated the date of
the Prospectus Supplement, in the form previously agreed to by the Mortgage
Loan Seller and the Purchaser, with respect to such statistical information.
Section 13. Indemnification.
(a) The Mortgage Loan Seller shall indemnify and hold harmless the
Purchaser and its directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon (i) any
untrue statement of a material fact contained in the Mortgage Loan Seller's
Information as identified in Exhibit 3, the omission to state in the
Prospectus Supplement or Prospectus (or any amendment thereof or supplement
thereto approved by the Mortgage Loan Seller and in which additional Mortgage
Loan Seller's Information is identified), in reliance upon and in conformity
with Mortgage Loan Seller's Information a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made, not misleading, (ii) any
representation or warranty assigned or made by the Mortgage Loan Seller in
Section 7 or Section 8 hereof being, or alleged to be, untrue or incorrect,
or (iii) any failure by the Mortgage Loan Seller to perform its obligations
under this Agreement; and the Mortgage Loan Seller shall reimburse the
Purchaser and each other indemnified party for any legal and other expenses
reasonably incurred by them in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action.
The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other
such indemnified party.
(b) The Purchaser shall indemnify and hold harmless the Mortgage Loan
Seller and its respective directors, officers and controlling persons (as
defined in Section 15 of the Securities Act) from and against any loss,
claim, damage or liability or action in respect thereof, to which they or any
of them may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon
(i) any untrue statement of a material fact contained in the Purchaser's
Information as identified in Exhibit 4, the omission to state in the
Prospectus Supplement or Prospectus (or any amendment thereof or supplement
thereto approved by the Purchaser and in which additional Purchaser's
Information is identified), in reliance upon and in conformity with the
Purchaser's Information, a material fact required to be stated therein or
necessary to make the statements therein in light of the circumstances in
which they were made, not misleading, (ii) any representation or warranty
made by the Purchaser in Section 9 hereof being, or alleged to be, untrue or
incorrect, or (iii) any failure by the Purchaser to perform its obligations
under this Agreement; and the Purchaser shall reimburse the Mortgage Loan
Seller, and each other indemnified party for any legal and other expenses
reasonably incurred by them in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action. The
foregoing indemnity agreement is in addition to any liability which the
Purchaser otherwise may have to the Mortgage Loan Seller, or any other such
indemnified party,
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification
is to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 13 except to the extent that it has been
prejudiced in any material respect by such failure or from any liability
which it may have otherwise). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and,
to the extent it may elect by written notice delivered to the indemnified
party promptly (but, in any event, within 30 days) after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof
with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by one of the indemnifying parties in connection with
the defense of such action, (ii) the indemnifying parties shall not have
employed counsel to have charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there is a
conflict of interest between itself or themselves and the indemnifying party
in the conduct of the defense of any claim or that the interests of the
indemnified party or parties are not substantially co-extensive with those of
the indemnifying party (in which case the indemnifying parties shall not have
the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be
borne by the indemnifying parties; provided, however, that the indemnifying
party shall be liable only for the fees and expenses of one counsel in
addition to one local counsel in the jurisdiction involved. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not
be liable for any settlement or any claim or action effected without its
written consent; provided, however, that such consent was not unreasonably
withheld.
(d) If the indemnification provided for in paragraphs (a) and (b) of this
Section 13 shall for any reason be unavailable to an indemnified party in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to in Section 13, then the indemnifying party shall in lieu
of indemnifying the indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, in such proportion as shall be
appropriate to reflect the relative benefits received by the Mortgage Loan
Seller on the one hand and the Purchaser on the other from the purchase and
sale of the Mortgage Loans, the transfer of the Certificates to the Mortgage
Loan Seller, the offering of the Notes and the other transactions
contemplated hereunder. No person found liable for a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who is not also found
liable for such fraudulent misrepresentation.
(e) The parties hereto agree that reliance by an indemnified party on any
publicly available information or any information or directions furnished by
an indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.
Section 14. Notices. All demands, notices and communications hereunder shall
be in writing but may be delivered by facsimile transmission subsequently
confirmed in writing. Notices to the Mortgage Loan Seller shall be directed
to EMC Mortgage Corporation, Mac Xxxxxx Xxxxx XX, 000 Xxxxxx Xxxxx Xxxxx,
Xxxxx 000, Xxxxxx, Xxxxx 00000 (Telecopy: (972-444-2880)), and notices to
the Purchaser shall be directed to Structured Asset Mortgage Investments II
Inc., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Telecopy:
(212-272-7206)), Attention: Xxxxx Xxxxxxxxxxx; or to any other address as may
hereafter be furnished by one party to the other party by like notice. Any
such demand, notice or communication hereunder shall be deemed to have been
received on the date 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) provided that it is received on a business day during normal
business hours and, if received after normal business hours, then it shall be
deemed to be received on the next business day.
Section 15. Transfer of Mortgage Loans. The Purchaser retains the right to
assign the Mortgage Loans and any or all of its interest under this Agreement
to the Issuer, with the understanding that the Issuer will then assign such
rights to the Indenture Trustee pursuant to the Indenture, without the
consent of the Mortgage Loan Seller, and, upon such assignment, the Indenture
Trustee, as the ultimate assignee, shall succeed to the applicable rights and
obligations of the Purchaser hereunder; provided, however, the Purchaser
shall remain entitled to the benefits set forth in Sections 11, 13 and 17
hereto and as provided in Section 2(a). Notwithstanding the foregoing, the
sole and exclusive right and remedy of the Issuer or the Indenture Trustee
with respect to a breach of representation or warranty of the Mortgage Loan
Seller shall be the purchase or substitution obligations of the Mortgage Loan
Seller contained in Sections 5 and 7 hereof.
Section 16. Termination. This Agreement may be terminated (a) by the mutual
consent of the parties hereto prior to the Closing Date, (b) by the
Purchaser, if the conditions to the Purchaser's obligation to close set forth
under Section 10(a) hereof are not fulfilled as and when required to be
fulfilled or (c) by the Mortgage Loan Seller, if the conditions to the
Mortgage Loan Seller's obligation to close set forth under Section 10(b)
hereof are not fulfilled as and when required to be fulfilled. In the event
of termination pursuant to clause (b), the Mortgage Loan Seller shall pay,
and in the event of termination pursuant to clause (c), the Purchaser shall
pay, all reasonable out-of-pocket expenses incurred by the other in
connection with the transactions contemplated by this Agreement. In the event
of a termination pursuant to clause (a), each party shall be responsible for
its own expenses.
Section 17. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement,
or contained in certificates of officers of the Mortgage Loan Seller
submitted pursuant hereto, shall remain operative and in full force and
effect and shall survive delivery of the Mortgage Loans to the Purchaser,
delivery by the Purchaser to the Issuer and the pledge by the Issuer to the
Indenture Trustee on behalf of the Noteholders. Subsequent to the delivery of
the Mortgage Loans to the Purchaser, the Mortgage Loan Seller's
representations and warranties contained herein with respect to the Mortgage
Loans shall be deemed to relate to the Mortgage Loans actually delivered to
the Purchaser and included in the Final Mortgage Loan Schedule and any
Substitute Mortgage Loan and not to those Mortgage Loans deleted from the
Preliminary Mortgage Loan Schedule pursuant to Section 3 hereof prior to the
Closing.
Section 18. Severability. If any provision of this Agreement shall be
prohibited or invalid under applicable law, the Agreement shall be
ineffective only to such extent, without invalidating the remainder of this
Agreement.
Section 19. Counterparts. This Agreement may be executed in counterparts,
each of which will be an original, but which together shall constitute one
and the same agreement.
Section 20. Amendment. This Agreement cannot be amended or modified in any
manner without the prior written consent of each party.
Section 21. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE
AND PERFORMED IN THE STATE OF NEW YORK AND SHALL BE INTERPRETED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES OF
SUCH STATE.
Section 22. Further Assurances. Each of the parties agrees to execute and
deliver such instruments and take such actions as another party may, from
time to time, reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement including any amendments hereto which
may be required by each of the Rating Agencies.
Section 23. Successors and Assigns. This Agreement shall bind and inure to
the benefit of and be enforceable by the Mortgage Loan Seller and the
Purchaser and their permitted successors and assigns and, to the extent
specified in Section 13 hereof, Bear Xxxxxxx, and their directors, officers
and controlling persons (within the meaning of federal securities laws). The
Mortgage Loan Seller acknowledges and agrees that the Purchaser may assign
its rights under this Agreement (including, without limitation, with respect
to the Mortgage Loan Seller's representations and warranties respecting the
Mortgage Loans) to Issuer and that the Issuer may further assign such rights
to the Indenture Trustee. Any person into which the Mortgage Loan Seller may
be merged or consolidated (or any person resulting from any merger or
consolidation involving the Mortgage Loan Seller), any person resulting from
a change in form of the Mortgage Loan Seller or any person succeeding to the
business of the Mortgage Loan Seller, shall be considered the "successor" of
the Mortgage Loan Seller hereunder and shall be considered a party hereto
without the execution or filing of any paper or any further act or consent on
the part of any party hereto. Except as provided in the two preceding
sentences, this Agreement cannot be assigned, pledged or hypothecated by
either party hereto without the written consent of the other parties to this
Agreement and any such assignment or purported assignment shall be deemed
null and void.
Section 24. The Mortgage Loan Seller. The Mortgage Loan Seller will keep in
full effect all rights as are necessary to perform their respective
obligations under this Agreement.
Section 25. Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
Section 26. No Partnership. Nothing herein contained shall be deemed or
construed to create a partnership or joint venture between the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date
first above written.
EMC MORTGAGE CORPORATION
By:
Name: Xxxx Xxxxxxx
Title: Senior Vice President
STRUCTURED ASSET MORTGAGE INVESTMENTS II
INC.
By:
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
1-2
EXHIBIT 1
CONTENTS OF 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 or its designee, and which shall be delivered to the Purchaser or
its designee pursuant to the terms of the Agreement.
(a) with respect to each Mortgage Loan:
1. The original Mortgage Note, endorsed without recourse in
blank or to the order of the Indenture Trustee and showing an unbroken chain
of endorsements from the originator thereof to the Person endorsing it in
blank or to the Indenture Trustee, or a lost note affidavit together with a
copy of the related Mortgage Note;
2. The original Mortgage and, if the related Mortgage Loan is
a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the
original is not available, a copy), with evidence of such recording indicated
thereon (or if the original Security Instrument, assignments to the Indenture
Trustee or intervening assignments thereof which have been delivered, are
being delivered or will, upon receipt of recording information relating to
the Security Instrument required to be included thereon, be delivered to
recording offices for recording and have not been returned to the Seller in
time to permit their recording as specified in Section 2.01(b) of the Sale
and Servicing Agreement, shall be in recordable form);
3. unless the Mortgage Loan is a MOM Loan, a certified copy of
the assignment (which may be in the form of a blanket assignment if permitted
in the jurisdiction in which the Mortgaged Property is located) in blank or
to "Deutsche Bank National Trust Company, as Indenture Trustee", with
evidence of recording with respect to each Mortgage Loan in the name of the
Indenture Trustee thereon (or if (A) the original Security Instrument,
assignments to the Indenture Trustee or intervening assignments thereof which
have been delivered, are being delivered or will, upon receipt of recording
information relating to the Security Instrument required to be included
thereon, be delivered to recording offices for recording and have not been
returned to the Seller in time to permit their delivery as specified in
Section 2.01(b) of the Sale and Servicing Agreement, the Seller may deliver a
true copy thereof with a certification by the Seller, on the face of such
copy, substantially as follows: "Certified to be a true and correct copy of
the original, which has been transmitted for recording" or (B) the related
Mortgaged Property is located in a state other than Maryland and an Opinion
of Counsel has been provided as set forth in Section 2.01(b) of the Sale and
Servicing Agreement, shall be in recordable form);
4. all intervening assignments of the Security Instrument, if
applicable and only to the extent available to the Mortgage Loan Seller with
evidence of recording thereon;
5. the original or a copy of the policy or certificate of
primary mortgage guaranty insurance, to the extent available, if any;
6. the original or copy of the policy of title insurance or
mortgagee's certificate of title insurance or commitment or binder for title
insurance; and
7. originals of all modification agreements, if applicable and
available.
2-2
EXHIBIT 2
MORTGAGE LOAN SCHEDULE INFORMATION
The Preliminary and Final Mortgage Loan Schedules shall set forth the
following information with respect to each Mortgage Loan:
(a) the loan number;
(b) the city, state and zip code of the Mortgaged Property;
(c) the property type;
(d) the Mortgage Interest Rate;
(e) the Servicing Fee Rate;
(f) the Net Rate;
(g) the original term to maturity;
(h) the maturity date;
(i) the stated remaining term to maturity;
(j) the original principal balance;
(k) the first payment date;
(l) the Monthly Payment in effect as of the Cut-off Date;
(m) the Cut-off Date Principal Balance;
(n) the Loan-to-Value Ratio at origination;
(o) the paid-through date of the Mortgage Loan;
(p) the insurer of any Primary Mortgage Insurance Policy;
(q) the Index and Gross Margin, if applicable;
(r) the Maximum Lifetime Mortgage Rate, if applicable;
(s) the Minimum Lifetime Mortgage Rate, if applicable;
(t) the Adjustment Date frequency, if applicable; and
(u) the number of days delinquent, if any.
Such schedule also shall set forth the total number of Mortgage Loans, the
total of each of the amounts described under (k) and (n) above for all of the
Mortgage Loans, the weighted average by principal balance as of the Cut-off
Date of each of the rates described under (e), (f) and (g) above for all of
the Mortgage Loans, and the weighted average remaining term to maturity by
unpaid principal balance as of the Cut-off Date for all of the Mortgage Loans.
3-1
EXHIBIT 3
MORTGAGE LOAN SELLER'S INFORMATION
All information in the Prospectus Supplement described under the
following Sections: "SUMMARY OF PROSPECTUS SUPPLEMENT - The Mortgage Loans,"
"THE MORTGAGE POOL" and "SCHEDULE A - CERTAIN CHARACTERISTICS OF THE MORTGAGE
LOANS."
4-1
EXHIBIT 4
PURCHASER'S INFORMATION
All information in the Prospectus Supplement and the Prospectus, except
the Mortgage Loan Seller's Information.
5-1
EXHIBIT 5
SCHEDULE OF LOST NOTES
Available Upon Request
6-1
EXHIBIT 6
STANDARD & POOR'S LEVELS GLOSSARY,
VERSION 5.6 REVISED, APPENDIX E
APPENDIX E: Standard & Poor's Predatory Lending Categorization
REVISED July 7, 2004
Standard & Poor's has categorized loans governed by anti-predatory lending
laws in the Jurisdictions listed below into three categories based upon a
combination of factors that include (a) the risk exposure associated with the
assignee liability and (b) the tests and thresholds set forth in those laws.
Note that certain loans classified by the relevant statute as Covered are
included in Standard & Poor's High Cost Loan Category because they included
thresholds and tests that are typical of what is generally considered High
Cost by the industry.
Category under
Applicable
Anti-Predatory
State/Jurisdiction (1) Level 3 Name Lending Law
--------------------------------------------------------------------------------
Arkansas Home Loan Protection High Cost Home Loan
Act, Ark. Code Xxx. §§ 00-00-000
et seq.
Effective July 16, 2003
--------------------------------------------------------------------------------
Cleveland Heights, OH Ordinance No. 72-2003 (PSH), Mun. Covered Loan
Code §§ 757.01 et seq.
Effective June 2, 2003
--------------------------------------------------------------------------------
Colorado Consumer Equity Protection, Colo. Covered Loan
Stat. Xxx. §§ 5-3.5-101 et seq.
Effective for covered loans
offered or entered into on or
after January 1, 2003. Other
provisions of the Act took effect
on June 7, 2002
--------------------------------------------------------------------------------
Connecticut Connecticut Abusive Home Loan High Cost Home Loan
Lending Practices Act, Conn. Gen.
Stat. §§ 36a-746 et seq.
Effective October 1, 2001
--------------------------------------------------------------------------------
District of Columbia Home Loan Protection Act, D.C. Covered Loan
Code §§ 26-1151.01 et seq.
Effective for loans closed on or
after January 28, 2003
--------------------------------------------------------------------------------
Florida Fair Lending Act, Fla. Stat. Xxx. High Cost Home Loan
§§ 494.0078 et seq.
Effective October 2, 2002
--------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 Georgia Fair Lending Act, Ga. High Cost Home Loan
- Mar. 6, 2003) Code Xxx. §§ 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
Georgia as amended Georgia Fair Lending Act, Ga. High Cost Home Loan
(Mar. 7, 2003 - Code Xxx. §§ 7-6A-1 et seq.
current)
Effective for loans closed on or
after March 7, 2003
--------------------------------------------------------------------------------
HOEPA Section 32 Home Ownership and Equity High Cost Loan
Protection Act of 1994, 15 U.S.C.
§ 1639, 12 C.F.R. §§ 226.32 and
226.34
Effective October 1, 1995,
amendments October 1, 2002
--------------------------------------------------------------------------------
Illinois High Risk Home Loan Act, Ill. High Risk Home Loan
Comp. Stat. tit. 815, §§ 137/5 et
seq.
Effective January 1, 2004 (prior
to this date, regulations under
Residential Mortgage License Act
effective from May 14, 2001)
--------------------------------------------------------------------------------
Kansas Consumer Credit Code, Kan. Stat. High Loan to Value
Xxx. §§ 16a-1-101 et seq. Consumer Loan (id. §
16a-3-207) and;
Sections 16a-1-301 and 16a-3-207
became effective April 14, 1999;
Section 16a-3-308a became
effective July 1, 1999
--------------------------------------------------------------------------------
High APR Consumer
Loan (id. §
16a-3-308a)
--------------------------------------------------------------------------------
Kentucky 2003 KY H.B. 287 - High Cost Home High Cost Home Loan
Loan Act, Ky. Rev. Stat. §§
360.100 et seq.
Effective June 24, 2003
--------------------------------------------------------------------------------
Maine Truth in Lending, Me. Rev. Stat. High Rate High Fee
tit. 9-A, §§ 8-101 et seq. Mortgage
Effective September 30, 1995 and
as amended from time to time
--------------------------------------------------------------------------------
Massachusetts Part 40 and Part 32, 209 C.M.R. High Cost Home Loan
§§ 32.00 et seq. and 209 C.M.R.
§§ 40.01 et seq.
Effective March 22, 2001 and
amended from time to time
--------------------------------------------------------------------------------
Nevada Assembly Xxxx No. 284, Nev. Rev. Home Loan
Stat. §§ 598D.010 et seq.
Effective October 1, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership High Cost Home Loan
Security Act of 2002, N.J. Rev.
Stat. §§ 46:10B-22 et seq.
Effective for loans closed on or
after November 27, 2003
--------------------------------------------------------------------------------
New Mexico Home Loan Protection Act, N.M. High Cost Home Loan
Rev. Stat. §§ 58-21A-1 et seq.
Effective as of January 1, 2004;
Revised as of February 26, 2004
--------------------------------------------------------------------------------
New York N.Y. Banking Law Article 6-l High Cost Home Loan
Effective for applications made
on or after April 1, 2003
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on High Cost Home Loan
High Cost Home Loans, N.C. Gen.
Stat. §§ 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
Ohio H.B. 386 (codified in various Covered Loan
sections of the Ohio Code), Ohio
Rev. Code Xxx. §§ 1349.25 et seq.
Effective May 24, 2002
--------------------------------------------------------------------------------
Oklahoma Consumer Credit Code (codified in Subsection 10
various sections of Title 14A) Mortgage
Effective July 1, 2000; amended
effective January 1, 2004
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and High Cost Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. §§ 37-23-10 et seq.
Effective for loans taken on or
after January 1, 2004
--------------------------------------------------------------------------------
West Virginia West Virginia Residential West Virginia
Mortgage Lender, Broker and Mortgage Loan Act
Servicer Act, W. Va. Code Xxx. §§ Loan
31-17-1 et seq.
Effective June 5, 2002
--------------------------------------------------------------------------------
Georgia (Oct. 1, 2002 Georgia Fair Lending Act, Ga. Covered Loan
- Mar. 6, 2003) Code Xxx. §§ 7-6A-1 et seq.
Effective October 1, 2002 - March
6, 2003
--------------------------------------------------------------------------------
New Jersey New Jersey Home Ownership Covered Home Loan
Security Act of 2002, N.J. Rev.
Stat. §§ 46:10B-22 et seq.
Effective November 27, 2003 -
July 5, 2004
--------------------------------------------------------------------------------
North Carolina Restrictions and Limitations on Consumer Home Loan
High Cost Home Loans, N.C. Gen.
Stat. §§ 24-1.1E et seq.
Effective July 1, 2000; amended
October 1, 2003 (adding open-end
lines of credit)
--------------------------------------------------------------------------------
South Carolina South Carolina High Cost and Consumer Home Loan
Consumer Home Loans Act, S.C.
Code Xxx. §§ 37-23-10 et seq.
Effective for loans taken on or
after January 1, 2004
--------------------------------------------------------------------------------
A-1
SCHEDULE A
REQUIRED RATINGS FOR EACH CLASS OF NOTES
Notes
Class S&P/Xxxxx'x
Class A-1........ AAA/Aaa
Class A-2........ AAA/Aaa
Class M-1........ AAA/NR
Class M-2........ AA/NR
Class B-1........ A/NR
Class B-2........ BBB/NR
------------------------------------------------------------------------------
None of the above ratings has been lowered since the respective dates of such
letters.
B-1
SCHEDULE B
MORTGAGE LOAN SCHEDULE
[Provided upon request]
