RECONSTITUTED SERVICING AGREEMENT
EXECUTION
RECONSTITUTED
SERVICING AGREEMENT
This
RECONSTITUTED SERVICING AGREEMENT (this “Agreement”), entered into as of the 1st
day of April, 2007, by and between HSBC BANK USA, NATIONAL ASSOCIATION (“HSBC”
or the “Seller”), HSI ASSET SECURITIZATION CORPORATION (“HASCO” or the
“Depositor”) and XXXXX FARGO BANK, N.A., as servicer (in such capacity, the
“Servicer”), and is acknowledged by XXXXX FARGO BANK, N.A., as master servicer
(in such capacity, the “Master Servicer”) and securities administrator (in such
capacity, the “Securities Administrator”) and DEUTSCHE BANK NATIONAL TRUST
COMPANY (the “Trustee”), recites and provides as follows:
RECITALS
WHEREAS,
the Seller has conveyed the Mortgage Loans listed on Schedule I-A hereto (the
“Mortgage Loans”) to the Depositor, which in turn has conveyed the Mortgage
Loans as well as various other mortgage loans to the Trustee, pursuant to a
pooling and servicing agreement, dated as of April 1, 2007 (the “Pooling and
Servicing Agreement”), attached as Exhibit B hereto, among the Trustee, the
Master Servicer, the Securities Administrator, Xxxxx Fargo Bank, N.A., as
custodian, OfficeTiger Global Real Estate Services Inc., as credit risk manager
(the “Credit Risk Manager”) and the Depositor;
WHEREAS,
the Mortgage Loans are currently serviced by the Servicer pursuant to (i) the
Servicing Agreement between HSBC, as owner, and the Servicer, as servicer,
dated
June 30, 2006 (the
“Servicing Agreement”),
annexed
hereto as Exhibit C, and (ii) the First Addendum to Servicing Agreement between
HSBC, as owner, and the Servicer, as servicer, dated July 15, 2006 (the “First
Addendum”);
WHEREAS,
the Seller desires that the Servicer continue to service the Mortgage Loans,
and
the Servicer has agreed to do so, pursuant to the Servicing
Agreement,
subject
to the rights of the Seller and the Master Servicer to terminate the rights
and
obligations of the Servicer hereunder as set forth herein and to the other
conditions set forth herein;
WHEREAS,
the Seller and the Servicer agree that the provisions of the Servicing Agreement
shall apply to the Mortgage Loans, but only to the extent provided herein and
that this Agreement shall govern the Mortgage Loans for so long as such Mortgage
Loans remain subject to the provisions of the Pooling and Servicing
Agreement;
WHEREAS,
the Seller and the Servicer agree that the provisions of the First Addendum
shall not apply to the Mortgage Loans for so long as such Mortgage Loans remain
subject to the provisions of the Pooling and Servicing Agreement;
WHEREAS,
the Master Servicer and any successor master servicer shall be obligated, among
other things, to supervise the servicing of the Mortgage Loans on behalf of
the
Trustee, and shall have the right, under certain circumstances, to terminate
the
rights and obligations of the Servicer under this Agreement;
WHEREAS,
multiple classes of certificates (the “Certificates”), including the Class P
Certificates and the Class X Certificates, will be issued on the Closing Date
pursuant to the Pooling and Servicing Agreement and HSBC Securities (USA) Inc.
or a nominee thereof is expected to be the initial registered holder of the
Class P and Class X Certificates;
WHEREAS,
subsequent to the Closing Date (as defined in the Pooling and Servicing
Agreement), HSBC Securities (USA) Inc. may convey all of its rights, title
and
interest in and to the Class P and Class X Certificates and all payments and
other proceeds received thereunder to an owner trust or other special purpose
entity in which it will initially hold the sole equity interest, which trust
or
special purpose entity will issue net interest margin securities (“NIM
Securities”) through an indenture trust, such NIM Securities secured, in part,
by the payments on such Certificates (the “NIMS Transaction”);
WHEREAS,
one or more insurers (collectively, the “NIMS Insurer”) may each issue insurance
policies guaranteeing certain payments under the NIM Securities to be issued
pursuant to the indenture in the NIMS Transaction;
WHEREAS,
in the event there may be two or more individual insurers, it is intended that
the rights extended to the NIMS Insurer pursuant to this Agreement be allocated
among two or more individual insurers that issue insurance policies in
connection with the NIMS Transaction through a NIMS Insurance Agreement by
and
among such insurers and the parties hereto; and
WHEREAS,
the Seller and the Servicer intend that each of the NIMS Insurer, the Master
Servicer and the Trustee be an intended third party beneficiary of this
Agreement, provided
that the
rights extended to the NIMS Insurer pursuant to this Agreement shall exist
only
so long as the NIMS Insurer is not in default under its obligations and either
the NIM Securities remain outstanding or the NIMS Insurer is owed amounts in
respect of its guaranty of payment on such NIM Securities.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth
and
for other good and valuable consideration, the receipt and adequacy of which
are
hereby acknowledged, the Seller and the Servicer hereby agree as
follows:
AGREEMENT
1. Definitions.
Capitalized terms used and not defined in this Agreement, including Exhibit
A
hereto and any provisions of the Servicing Agreement incorporated by reference
herein (regardless if such terms are defined in the Servicing Agreement), shall
have the meanings ascribed to such terms in the Pooling and Servicing
Agreement.
2. Custodianship.
The
parties hereto acknowledge that Xxxxx Fargo Bank, N.A. will act as custodian
(the “Custodian”) of the Custodial Mortgage Files for the Trustee pursuant to
the Pooling and Servicing Agreement.
3. Servicing.
The
Servicer agrees, with respect to the Mortgage Loans, to perform and observe
the
duties, responsibilities and obligations that are to be performed and observed
under the provisions of the Servicing Agreement, except as otherwise provided
herein and on Exhibit A hereto, and that the provisions of the Servicing
Agreement, as so modified, are and shall be a part of this Agreement to the
same
extent as if set forth herein in full. The Servicer and the Seller agree that
provisions of the First Addendum shall not be a part of this
agreement.
The
Servicer additionally agrees that, to the extent the Servicer has serviced
the
Mortgage Loans for a period of sixty days, the Servicer will fully furnish,
in
accordance with the Fair Credit Reporting Act of 1970, as amended (the “Fair
Credit Reporting Act”) and its implementing regulations, accurate and complete
information (e.g., favorable and unfavorable) on its borrower credit files
to
Equifax, Experian, and Trans Union Credit Information Company (three of the
credit repositories) on a monthly basis.
4. Trust
Cut-off Date.
The
parties hereto acknowledge that by operation of Section 4.05 and Section 5.01
of
the Servicing Agreement, the remittance on May 18, 2007 to the Trust Fund is
to
include principal due after April 1, 2007 (the “Trust Cut-off Date”) plus
interest, at the Mortgage Loan Remittance Rate collected during the related
Due
Period exclusive of any portion thereof allocable to a period prior to the
Trust
Cut-off Date, with the adjustments specified in clauses (b), (c) and (d) of
Section 5.01 of the Servicing Agreement.
5. Master
Servicing; Termination of Servicer.
The
Servicer, including any successor servicer hereunder,
shall be subject to the supervision of the Master Servicer, which Master
Servicer shall be obligated to ensure that the Servicer services the Mortgage
Loans in accordance with the provisions of this Agreement. The Master Servicer,
acting on behalf of the HSI Asset Securitization Corporation Trust 2007-HE2
Trust Fund (the “Trust Fund”) created pursuant to the Pooling and Servicing
Agreement, shall have the same rights as the Seller under the Servicing
Agreement to enforce the obligations of the Servicer under the Servicing
Agreement and the term “Owner” as used in the Servicing Agreement in connection
with any rights of the Owner shall refer to the Master Servicer, except as
otherwise specified in Exhibit A hereto. The Master Servicer shall be entitled
to terminate the rights and obligations of the Servicer under this Agreement
upon the failure of the Servicer to perform any of its obligations under this
Agreement, as provided in Article X (Default) of the Servicing Agreement.
Notwithstanding anything herein to the contrary, in no event shall the Master
Servicer be required to assume any obligations of the Seller under the Servicing
Agreement; and, in connection with the performance of the Master Servicer’s
duties hereunder, the parties and other signatories hereto agree that the Master
Servicer shall be entitled to all of the rights, protections and limitations
of
liability afforded to the Master Servicer under the Pooling and Servicing
Agreement.
6. No
Representations.
Neither
the Servicer nor the Master Servicer shall be obligated or required to make
any
representations and warranties regarding the characteristics of the Mortgage
Loans (other than those representations and warranties made by the Servicer
in
Section 3.01 of the Servicing Agreement, which the Servicer hereby restates
as
of the Closing Date) in connection with the transactions contemplated by the
Pooling and Servicing Agreement and issuance of the Certificates issued pursuant
thereto.
7. Notices.
All
notices and communications between or among the parties hereto (including any
third party beneficiary thereof) or required to be provided to the Trustee
shall
be in writing and shall be deemed received or given when mailed first-class
mail, postage prepaid, addressed to each other party at its address specified
below or, if sent by facsimile or electronic mail, when facsimile or electronic
confirmation of receipt by the recipient is received by the sender of such
notice. Each party may designate to the other parties in writing, from time
to
time, other addresses to which notices and communications hereunder shall be
sent.
All
notices required to be delivered to the Master Servicer or the Securities
Administrator under this Agreement shall be delivered to the Master Servicer
or
the Securities Administrator at the following address:
Xxxxx
Fargo Bank, N.A.
X.X.
Xxx
00
Xxxxxxxx,
Xxxxxxxx 00000
Attention:
Client Manager - HASCO 2007-HE2
(or
in
the case of overnight deliveries,
0000
Xxx
Xxxxxxxxx Xxxx
Xxxxxxxx,
Xxxxxxxx 21045)
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
remittances required to be made to the Master Servicer under this Agreement
shall be made on a scheduled/scheduled basis to the following wire
account:
Xxxxx
Fargo Bank, N.A.
ABA#
000000000
Account
Name: SAS Clearing
ACCT:
0000000000
FFC:
53144600
Ref:
XXXXX 0000-XX0
Xxxxxxxxx:
Client Manager
Telephone:
(000) 000-0000
All
notices required to be delivered to the Trustee hereunder shall be delivered
to
the Trustee at the following address:
Deutsche
Bank National Trust Company
0000
Xxxx
Xx. Xxxxxx Xxxxx
Xxxxx
Xxx, Xxxxxxxxxx 00000
Attention: Trust
Administration - HB07H2
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
All
written information required to be delivered to the Seller hereunder shall
be
delivered to HSBC at the following address:
HSBC
Bank
USA, National Association
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
HASCO 2007-HE2
All
notices required to be delivered to the Servicer hereunder shall be delivered
to
its office at the address for notices as set forth in the Servicing
Agreement.
All
written information required to be delivered to the NIMS Insurer shall be
delivered to the NIMS Insurer at the address specified in the Pooling and
Servicing Agreement.
8. NIMS
Insurer.
As of
the Closing Date (as defined herein), a NIMS Insurer has not been assigned.
In
the event a NIMS Insurer is assigned after the Closing Date, the Master Servicer
shall promptly notify the Servicer in the manner provided by Section 12.05
of
the Servicing Agreement.
9. Acknowledgement.
The
Servicer hereby acknowledges that the rights and obligations of HSBC under
the
Servicing Agreement will be assigned to HASCO on the Closing Date under the
Mortgage Loan Purchase Agreement; and that such rights and obligations will
simultaneously be re-assigned by HASCO to the Trust Fund under the Pooling
and
Servicing Agreement. The Servicer agrees that the Mortgage Loan Purchase
Agreement and the Pooling and Servicing Agreement will each be a valid
assignment and assumption agreement or other assignment document required
pursuant to Sections 2.02 and 12.10 of the Servicing Agreement and will
constitute a valid assignment and assumption of the rights and obligations
of
HSBC under the Servicing Agreement to HASCO, and by HASCO to the Trust Fund,
as
applicable. In addition, the Trust Fund will make a REMIC election. The Servicer
hereby consents to each such assignment and assumption and acknowledges the
Trust Fund’s REMIC election.
10. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
11. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original, but all of which counterparts shall
together constitute but one and the same instrument.
12. Reconstitution.
The
Seller and the Servicer agree that this Agreement is a reconstitution agreement
executed in connection with a “Securitization Transaction,” and that the date
hereof is the “Reconstitution Date,” each as defined in the Servicing
Agreement.
Executed
as of the day and year first above written.
HSBC
BANK
USA, NATIONAL ASSOCIATION,
as
Seller
By: /s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Officer #15253
HSI
ASSET
SECURITIZATION CORPORATION
as
Depositor
By: /s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Vice President
XXXXX
FARGO BANK, N.A.,
as
Servicer
By: /s/
Xxxx X Xxxxxxxx
Name:
Xxxx X Xxxxxxxx
Title:
Vice President
Acknowledged:
XXXXX
FARGO BANK, N.A.,
as
Master
Servicer
By:
/s/
Xxxxxx Xxxx
Name:
Xxxxxx Xxxx
Title:
Vice President
DEUTSCHE
BANK NATIONAL TRUST COMPANY,
not
in
its individual capacity, but solely as Trustee
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Authorized Signer
EXHIBIT
A
Modifications
to the Servicing Agreement
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1.
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Unless
otherwise specified herein, any provisions of the Servicing Agreement,
including definitions, relating to (i) representations and warranties
relating to the Mortgage Loans and not relating to the servicing
of the
Mortgage Loans, (ii) Mortgage Loan repurchase obligations, (iii)
Whole
Loan Transfers, Securitization Transactions and Reconstitution, and
(iv)
Assignments of Mortgage, shall be disregarded for purposes relating
to
this Agreement. The exhibits to the Servicing Agreement and all references
to such exhibits shall also be
disregarded.
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2.
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The
definition of “Accepted Servicing Practices” in Article I is hereby
amended in its entirety to read as
follows:
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Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those mortgage servicing practices (i) of prudent
mortgage lending institutions which service mortgage loans of the same type
as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property
is
located and
(ii)
in accordance with applicable state, local and federal laws, rules and
regulations.
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3.
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The
definition of “Custodial Agreement” shall be inapplicable to this
Agreement.
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4.
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The
definition of “Custodian” in Article I is hereby amended to read as
follows:
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Custodian:
means
Xxxxx Fargo Bank, N.A., and its successors and assigns.
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5.
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A
new definition of “Document Transfer Event” is hereby added to Article I
immediately following the definition of “Determination Date” to read as
follows:
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Document
Transfer Event:
The day
on which (i) Xxxxx Fargo Bank, N.A. or any successor thereto is no longer the
servicer of any of the Mortgage Loans, (ii) the senior, unsecured long-term
debt
rating of Xxxxx Fargo & Company is less than “BBB-” by Fitch or (iii) any
Rating Agency requires the Servicer to deliver the Retained Mortgage Files
to
the Custodian.
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6.
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A
new definition of “Eligible Account” is hereby added to Article I
immediately following the definition of “Due Period” to read as
follows:
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Eligible
Account:
Either
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated A-1 by S&P and
Prime-1 by Moody's (or a comparable rating if another rating agency is specified
by the Owner by written notice to the Servicer) at the time any amounts are
held
on deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC or (iii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in
its
fiduciary capacity. Eligible Accounts may bear interest.
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7.
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A
new definition of “MERS Eligible Mortgage Loan” is hereby added to Article
I immediately following the definition of “MERS” to read as
follows:
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MERS
Eligible Mortgage Loan:
Any
Mortgage
Loan that has been designated by the Servicer as recordable in the name of
MERS,
as nominee.
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8.
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The
definition of “Mortgage Interest Rate” in Article I is hereby amended by
adding the phrase “net of any Relief Act Reduction” to the end of such
definition.
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9.
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New
definitions of “Non-MERS Eligible Mortgage Loan” and “Non-MERS Mortgage
Loans” are hereby added to Article I immediately following the definition
of “Mortgagor” to read as follows:
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Non-MERS
Eligible Mortgage Loan:
Any
Mortgage
Loan other than a MERS Eligible Mortgage Loan.
Non-MERS
Mortgage Loan:
Any
Mortgage Loan other than a MERS Mortgage Loan.
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10.
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A
new definition of “Prepayment Charge” is added to Article I to immediately
precede the definition of “Prepayment Interest Shortfall” and to read as
follows:
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Prepayment
Charge:
means
with respect to any Mortgage Loan and Distribution Date, the charges or
premiums, if any, exclusive of any servicing charges collected by the Servicer
in connection with a Mortgage Loan payoff, due in connection with a full
prepayment of such Mortgage Loan during the Principal Prepayment Period in
accordance with the terms thereof (other than any Servicer Prepayment Charge
Payment Amount).
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11.
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The
definition of “Prepayment Interest Shortfall” in Article I is hereby
amended to read as follows:
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Prepayment
Interest Shortfall Amount:
means,
with respect to any Mortgage Loan that was subject to a Principal Prepayment
in
full or in part during any Principal Prepayment Period, which Principal
Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan’s Due
Date in such Principal Prepayment Period, the amount of interest (net of the
related Servicing Fee for Principal Prepayments in full only) that would have
accrued on the amount of such Principal Prepayment during the period commencing
on the date as of which such Principal Prepayment was applied to such Mortgage
Loan and ending on the day immediately preceding such Due Date,
inclusive.
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12.
|
The
definition of “Prepayment Penalty” is hereby deleted in its entirety. In
addition, all references to “Prepayment Penalty” in the Servicing
Agreement is hereby replaced with “Prepayment
Charge”.
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13.
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A
new definition of “Qualified Depository” is added to Article I immediately
following the definition of “Purchase Agreement” to read as
follows:
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A
federal
or state chartered depository institution the deposits in which are insured
by
the FDIC to the applicable limits and the short-term unsecured debt obligations
of which (or, in the case of a depository institution that is a subsidiary
of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated A-1 by Standard & Poor’s Ratings Services and Prime-1 by
Xxxxx’x Investors Service, Inc. (or a comparable rating if another rating agency
is specified by the Owner by written notice to the Servicer) at the time any
deposits are held on deposit therein.
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14.
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A
new definition of “Realized Loss” is added to Article I immediately
following the definition of “Rating Agency” to read as
follows:
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Realized
Loss:
With
respect to each Liquidated Mortgage Loan (as defined in the Pooling and
Servicing Agreement), an amount equal to (i) the unpaid principal balance of
such Mortgage Loan as of the date of liquidation, minus (ii) Liquidation
Proceeds received, to the extent allocable to principal, net of amounts that
are
reimbursable therefrom to the Master Servicer or the Servicer with respect
to
such Mortgage Loan (other than Monthly Advances of principal) including expenses
of liquidation.
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15.
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A
new definition of “Relief Act Reduction” is hereby added to Article I
immediately following the definition of “Regulation AB” to read as
follows:
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Relief
Act Reduction:
With
respect to any Mortgage Loan as to which there has been a reduction in the
amount of the interest collectible thereon as a result of the application of
the
Servicemembers Civil Relief Act, any amount by which interest collectible on
such Mortgage Loan for the Due Date in the related Due Period is less than
the
interest accrued thereon for the applicable one-month period at the Mortgage
Interest Rate without giving effect to such reduction.
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16.
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A
new definition of “Servicer Prepayment Charge Payment Amount” is added to
Article I immediately after the new definition of “Servicer Information”
to read as follows:
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Servicer
Prepayment Charge Payment Amount:
Any
amount paid by the Servicer as a result of an impermissible waiver of a
Prepayment Charge pursuant to Section 4.01 of this Agreement.
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17.
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Section
2.01 (Possession of Mortgage Files; Maintenance of Servicing Files)
is
hereby amended as follows:
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(i) by
replacing the word “Owner” with the words “Trustee and the Trust Fund” in each
instance; and
(ii) by
adding
the following after the word “Owner” in the fourteenth line of the first
paragraph:
or
within
60 days of the occurrence of a Document Transfer Event
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18.
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Section
2.02 (Books and Records; Transfers of Mortgage Loans) is hereby amended
as
follows:
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(i)
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by
replacing the reference to “Owner” in the first paragraph of such section
with “Trustee and the Trust Fund;” and
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| (ii) | by adding the following paragraph as the last paragraph of such section: |
Only
if
so requested by the Seller or the Master Servicer, the Servicer, at the
Depositor’s expense, shall cause to be properly prepared and recorded as
Assignment of Mortgage in favor of the Trustee with respect to each Non-MERS
Mortgage Loan in each public recording office where such Non-MERS Mortgage
Loans
are recorded, as soon as practicable after the Closing Date (but in no event
more than 90 days thereafter to the extent delays are caused by the applicable
recording office).
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19.
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The
parties acknowledge that the fourth paragraph of Section 2.02 shall
be
inapplicable to this Agreement.
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20.
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The
parties acknowledge that Section 2.03 (Custodial Agreement; Delivery
of
Documents) shall be superseded by the provisions of the Pooling and
Servicing Agreement.
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21.
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The
first paragraph of Section 3.01 (Servicer Representations and Warranties)
is hereby amended by replacing the words “to the Owner” with “to the Trust
Fund, the Master Servicer, the Depositor, the Trustee and the Securities
Administrator.”
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22.
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Section
3.01(k) (No Brokers’ Fees) shall be inapplicable to this
Agreement.
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23.
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Section
3.01(n)(iii) is hereby replaced with the
following:
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Except
as
identified on Exhibit K hereto, no material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as servicer has been disclosed or reported by
the
Servicer;
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24.
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A
new paragraph is hereby added at the end of Section 3.01 (Servicer
Representations and Warranties) to read as
follows:
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It
is
understood and agreed that the representations and warranties set forth in
Section 3.01 (a) through (j) and (l) through (o) shall survive the engagement
of
the Servicer to perform the servicing responsibilities hereunder and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of the Depositor, the Trustee, the Trust Fund, the NIMS Insurer and the Master
Servicer. Upon discovery by either the Servicer, the Depositor, the Master
Servicer, the NIMS Insurer or the Trustee of a breach of any of the foregoing
representations and warranties which materially and adversely affects the
ability of the Servicer to perform its duties and obligations under this
Agreement or otherwise materially and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or the priority of the security interest
on such Mortgaged Property or the interest of the Depositor, Trustee or the
Trust Fund, the party discovering such breach shall give prompt written notice
to the other.
Within
sixty (60) days of the earlier of either discovery by or notice to the Servicer
of any breach of a representation or warranty set forth in Section 3.01 which
materially and adversely affects the ability of the Servicer to perform its
duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Loans, the Mortgaged Property or the priority
of the security interest on such Mortgaged Property, the Servicer shall use
its
best efforts promptly to cure such breach in all material respects and, if
such
breach cannot be cured, the Servicer shall, at the Trustee’s or Master
Servicer’s option or the NIMS Insurer, assign the Servicer’s rights and
obligations under this Agreement (or respecting the affected Loans) to a
successor Servicer selected by the Master Servicer with prior written notice
to
the Trustee (if and to the extent required under the Pooling and Servicing
Agreement). Such assignment shall be made in accordance with Section
12.01.
In
addition, the Servicer shall indemnify (from its own funds) the Depositor,
the
Trustee, the Trust Fund, the NIMS Insurer and the Master Servicer and hold
each
of them harmless against any costs resulting from any claim, demand, defense
or
assertion based on or grounded upon, or resulting from, a breach of the
Servicer’s representations and warranties contained in this Agreement. It is
understood and agreed that the remedies set forth in this Section 3.01
constitute the sole remedies of the Depositor, the Master Servicer, the Trust
Fund, the NIMS Insurer and the Trustee respecting a breach of the foregoing
representations and warranties.
Any
cause
of action against the Servicer relating to or arising out of the breach of
any
representations and warranties made in Section 3.01 shall accrue upon (i)
discovery of such breach by the Servicer or notice thereof by the Trustee,
the
NIMS Insurer or Master Servicer to the Servicer, (ii) failure by the Servicer
to
cure such breach within the applicable cure period, and (iii) demand upon the
Servicer by the Depositor, the Trustee, the NIMS Insurer or the Master Servicer
for compliance with this Agreement.
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25.
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Section
4.01 (Servicer to Act as Servicer) is hereby amended
by:
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(i) replacing
the second paragraph of such section with the following:
Consistent
with the terms of this Agreement, the Servicer may waive, modify or vary any
term of any Mortgage Loan or consent to the postponement of any such term or
in
any manner grant indulgence to any Mortgagor if in the Servicer’s reasonable and
prudent determination such waiver, modification, postponement or indulgence
is
not materially adverse to the Owner, provided, however, that unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is,
in
the judgment of the Servicer, imminent, the Servicer shall not permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, forgive the payment of principal or interest, reduce or increase
the outstanding principal balance (except for actual payments of principal)
or
change the final maturity date on such Mortgage Loan. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself and the
Owner, all instruments of satisfaction or cancellation, or of partial or full
release, discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties; provided, further,
that upon the full release or discharge, the Servicer shall notify the related
Custodian of the related Mortgage Loan of such full release or discharge. If
reasonably required by the Servicer, the Owner shall furnish the Servicer with
any powers of attorney and other documents necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties under this
Agreement. Promptly after the execution of any assumption, modification,
consolidation or extension of any Mortgage Loan, the Servicer shall forward
to
the Master Servicer copies of any documents evidencing such assumption,
modification, consolidation or extension. Notwithstanding anything to the
contrary contained in this Agreement, the Servicer shall not make or permit
any
modification, waiver or amendment of any term of any Mortgage Loan that would
cause any REMIC created under the Pooling and Servicing Agreement to fail to
qualify as a REMIC or result in the imposition of any tax under Section 860F(a)
or Section 860G(d) of the Code.
|
(ii)
|
by
replacing the reference to “the tenth (10th)
Business Day of each month” with “tenth calendar day of each month (or if
such calendar day is not a Business Day, the immediately preceding
Business Day)” in the second to last sentence of the sixth
paragraph.
|
|
26.
|
Section
4.04 (Establishment of and Deposits to Custodial Account) is hereby
amended by replacing the words “in trust for the Owner and/or subsequent
owners of Mortgage Loans, and various Mortgagors - P&I” in the fourth
and fifth lines of the first sentence of the first paragraph with
the
following:
|
“in
trust
for the HSI Asset Securitization Corporation Trust 2007-HE2 and various
Mortgagors”.
|
27.
|
Section
4.05 (Permitted Withdrawals From Custodial Account) is hereby amended
as
follows:
|
(i) by
replacing the last two lines of clause (iii) with the following:
thereto
shall be prior to the rights of the Trust Fund; provided however, that in the
event that the Servicer determines in good faith that any unreimbursed Monthly
Advances will not be recoverable from amounts representing late recoveries
of
payments of principal or interest respecting the particular Mortgage Loan as
to
which such Monthly Advance was made or from Liquidation Proceeds or Insurance
Proceeds with respect to such Mortgage Loan, the Servicer may reimburse itself
for such amounts from the Custodial Account, it being understood, in the case of
any such reimbursement, that the Servicer’s right thereto shall be prior to the
rights of the Trust Fund;
|
(ii)
|
by
amending clause (v) thereof by adding the words “Section 4.01 and” before
the reference to Section 8.01.
|
|
28.
|
Section
4.06 (Establishment of and Deposits to Escrow Account) is hereby
amended
by deleting the words “Owner and/or subsequent Owners of Residential
Mortgage Loans, and various Mortgagors - T&I” in the fourth and fifth
lines of the first sentence of the first paragraph, and replacing
it with
the following:
|
HSI
Asset
Securitization Corporation Trust 2007-HE2 and various Mortgagors.
|
29.
|
Section
4.07 (Permitted Withdrawals from Escrow Account) is hereby amended
by
removing the word “and” at the end of clause (viii), replacing the period
at the end of clause (ix) with “; and” and adding a new clause (x) to read
as follows:
|
(x) to
transfer funds to another Eligible Institution in accordance with Section 4.09
hereof.
|
30.
|
Section
4.09 (Protection of Accounts) is hereby amended as
follows:
|
|
(i)
|
by
replacing the words “the Owner” with “the Master Servicer” in each
instance; and
|
|
(ii)
|
by
adding the following sentence as the last sentence of such
section:
|
The
Servicer shall give notice to the Master Servicer of any transfer of the
Custodial Account or the Escrow Account to a different Qualified Depository
no
later than thirty (30) days after any such transfer is made and deliver to
the
Master Servicer, upon request, a certification notice in the form of Exhibit
E
or Exhibit F, as applicable, with respect to such Qualified
Depository.
|
31.
|
Section
4.10 (Maintenance of Hazard Insurance), is hereby amended by deleting
the
following from the end of the fourth paragraph, “and if the Mortgagor does
not obtain such coverage, the Servicer shall immediately force place
the
required coverage on the Mortgagor's
behalf.”
|
|
32.
|
Section
4.13 (Inspections), is hereby amended by deleting it in its entirety
and
replacing it with the following:
|
The Servicer or
its agent shall inspect the Mortgaged Property as often as deemed necessary
by
the Servicer in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer, to assure itself that the
value of the Mortgaged Property is being preserved. The Servicer
shall keep a record of each such inspection and, upon request, shall provide
the Owner with an electronic report of each such inspection.
|
33.
|
Section
4.15 (Maintenance of PMI Policy or LPMI Policy), is hereby amended
by
adding to (ii), after Homeowners Protection Act of 1998, 12 USC §4901,
et
seq.,“or
other applicable law”
|
|
34.
|
Section
4.16 (Title, Management and Disposition of REO Property) is hereby
amended
by (i) replacing the reference to “one year” in the fifteenth line of the
second paragraph thereof with “three years”, (ii) adding two new
paragraphs after the second paragraph thereof to read as
follows:
|
In
the
event that the Trust Fund acquires any REO Property in connection with a default
or imminent default on a Mortgage Loan, the Servicer shall dispose of such
REO
Property not later than the end of the third taxable year after the year of
its
acquisition by the Trust Fund unless the Servicer has applied for and received
a
grant of extension from the Internal Revenue Service ( and provided a copy
of
the same to the Master Servicer and the Trustee) to the effect that, under
the
REMIC Provisions and any relevant proposed legislation and under applicable
state law, the applicable Trust REMIC may hold REO Property for a longer period
without adversely affecting the REMIC status of such REMIC or causing the
imposition of a federal or state tax upon such REMIC. If the Servicer has
received such an extension, then the Servicer shall continue to attempt to
sell
the REO Property for its fair market value for such period longer than three
years as such extension permits (the “Extended Period”). If the Servicer has not
received such an extension and the Servicer is unable to sell the REO Property
within the period ending 3 months before the end of such third taxable year
after its acquisition by the Trust Fund or if the Servicer has received such
an
extension, and the Servicer is unable to sell the REO Property within the period
ending three months before the close of the Extended Period, the Servicer shall,
before the end of the three year period or the Extended Period, as applicable,
(i) purchase such REO Property at a price equal to the REO Property’s fair
market value or (ii) auction the REO Property to the highest bidder (which
may
be the Servicer) in an auction reasonably designed to produce a fair price
prior
to the expiration of the three-year period or the Extended Period, as the case
may be. The Trustee shall sign any document or take any other action reasonably
requested by the Servicer which would enable the Servicer, on behalf of the
Trust Fund, to request such grant of extension.
Notwithstanding
any other provisions of this Agreement, no REO Property acquired by the Trust
Fund shall be rented (or allowed to continue to be rented) or otherwise used
by
or on behalf of the Trust Fund in such a manner or pursuant to any terms that
would: (i) cause such REO Property to fail to qualify as “foreclosure property”
within the meaning of Section 860G(a)(8) of the Code; or (ii) subject any Trust
REMIC to the imposition of any federal income taxes on the income earned from
such REO Property, including any taxes imposed by reason of Sections 860F or
860G(c) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the Trust Fund with respect to the imposition of any such
taxes.
(iii)
deleting
the first sentence of the third paragraph thereto, and (iv) by adding the
following to the end of such Section:
Prior
to
acceptance by the Servicer of an offer to sell any REO Property for a sale
price
that is less than 90% of the unpaid principal balance of the related Mortgage
Loan, the Servicer shall notify the Master Servicer of such offer in writing
which notification shall set forth all material terms of said offer (each a
“Notice of Sale”). The Master Servicer shall be deemed to have approved
the sale of any REO Property unless the Master Servicer notifies the Servicer
in
writing, within two (2) Business Days after its receipt of the related Notice
of
Sale, that it disapproves of the related sale, in which case the Servicer shall
not proceed with such sale.
|
35.
|
Section
5.01 (Remittances) is hereby amended as follows by adding the following
after the second paragraph of such
Section:
|
All
remittances required to be made to the Master Servicer shall be made to the
following wire account or to such other account as may be specified by the
Master Servicer from time to time:
Xxxxx
Fargo Bank, N.A.
ABA#
000000000
Account
Name: SAS Clearing
ACCT:
0000000000
FFC:
53144600
Ref:
XXXXX 0000-XX0
Xxxxxxxxx:
Client Manager
Telephone:
(000) 000-0000
|
36.
|
Section
5.02 (Statements to Owner) is hereby amended to read as
follows:
|
Section
5.02 Statements
to Master Servicer.
Not
later
than the tenth calendar day of each month (or if such calendar day is not a
Business Day, the immediately preceding Business Day), the Servicer shall
furnish to the Master Servicer (i) a monthly remittance advice in the format
set
forth in Exhibit D-1 hereto, a monthly defaulted loan report in the format
set
forth in Exhibit D-2 hereto (or in such other format mutually agreed to between
the Servicer and the Master Servicer) relating to the period ending on the
last
day of the preceding calendar month and a monthly loan loss report in the format
set forth in Exhibit D-3 hereto (or in such other format mutually agreed to
between the Servicer and the Master Servicer) and (ii) all such information
required pursuant to clause (i) above on a magnetic tape or other similar media
reasonably acceptable to the Master Servicer; provided,
however, the
information required by Exhibit D-2 and Exhibit D-3 is limited to that which
is
readily available to the Servicer and is mutually agreed to by the Servicer
and
Master Servicer. No later than two Business Days after the thirteenth day of
each calendar month, the Servicer shall furnish to the Master Servicer a monthly
report containing such information regarding prepayments of Mortgage Loans
during the applicable Principal Prepayment Period and in a format as mutually
agreed to between the Servicer and the Master Servicer.
The
Servicer shall provide the Master Servicer (which shall in turn provide the
NIMS
Insurer) with such information available to it concerning the Mortgage Loans
as
is necessary for the Securities Administrator to prepare the Trust Fund’s
federal income tax return as the Securities Administrator may reasonably request
from time to time.
|
37.
|
Section
6.04 (Annual Statement as to Compliance) is hereby amended as
follows:
|
|
(i)
|
by
replacing the words “the Owner or any Master Servicer or Depositor” with
“the Master Servicer” in each instance;
and
|
|
(ii)
|
by
replacing “2007” with “2008” in the first sentence of such section.
|
|
38.
|
Section
6.05 (Annual Independent Public Accountants’ Servicing Report) is hereby
deleted in its entirety and replaced with
“[Reserved]”.
|
|
39.
|
Section
6.06 (Report on Assessment of Compliance and Attestation) is hereby
amended as follows:
|
|
(i)
|
by
replacing the last three lines of subsection (i) with the
following:
|
“Applicable
Servicing Criteria” specified on Exhibit H.
|
(ii)
|
by
replacing “2007” with “2008” in the first sentence of such
section;
|
|
(iii)
|
by
replacing any reference to “the Owner, any Master Servicer or any
Depositor” with “the Master Servicer”;
and
|
|
(iv)
|
by
replacing any reference to “the Owner, such Master Servicer and such
Depositor” with “the Master
Servicer.”
|
|
40.
|
Section
8.01 (Indemnification; Third Party Claims) is hereby amended in its
entirety to read as follows:
|
The
Servicer shall indemnify the Owner, the Depositor, the Trust Fund, the Trustee,
the Securities Administrator and the Master Servicer and hold each of them
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses that any of such parties may sustain
the
failure of the Servicer to perform its duties and service the Mortgage Loans
in
strict compliance with the terms of this Agreement (including, but not limited
to its obligations to provide any information, report, certification,
accountants’ letter or other material pursuant to Sections 6.04 and 6.06
hereunder) or for any inaccurate or misleading information provided pursuant
to
Sections 6.04 and 6.06 hereunder. The Servicer immediately shall notify the
Owner, the Master Servicer, the Securities Administrator and the Trustee or
any
other relevant party if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of
the
indemnified party, which consent shall not be unreasonably withheld or delayed)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or
decree which may be entered against it or any of such parties in respect of
such
claim. The Servicer shall follow any written instructions received from the
Master Servicer or the Trustee in connection with such claim. The Servicer
shall
provide the Trustee (with a copy to the Master Servicer) with a written report
of all expenses and advances incurred by the Servicer pursuant to this Section
8.01, and the Trustee (at the written direction of the Master Servicer) from
the
assets of the Trust Fund promptly shall reimburse the Servicer for all amounts
advanced by it pursuant to the preceding sentence except when the claim is
in
any way relates to the failure of the Servicer to service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement or the
gross negligence, bad faith or willful misconduct of this Servicer.
|
41.
|
Section
9.01 (Removal of Mortgage Loans from Inclusion Under this Agreement
Upon a
Securitization Transaction) is hereby amended as
follows:
|
|
(a)
|
Subsection
(f)(J) is hereby amended in its entirety to read as
follows:
|
a
description of any affiliation or relationship (of a type described in Item
1119
of Regulation AB) between the Servicer, each Subservicer and any of the parties
listed on Exhibit J hereto.
|
(b)
|
Subsection
(i)(i)(7) is hereby amended in its entirety to read as
follows:
|
there
are
no affiliations, relationships or transactions relating to the Servicer or
any
Subservicer with respect to any Securitization Transaction and any party listed
on Exhibit J hereto.
|
(c)
|
Subsection
(m) is hereby amended by (1) changing the reference to “the Owner, each
affiliate of the Owner” to “the Trust Fund, the Master Servicer, the
Depositor and the Trustee,” (2) deleting the reference to “or the
Depositor,” and (3) deleting the reference to “and of the Depositor”;
and
|
|
(d)
|
by
changing any reference to “Owner” to “Master Servicer” in each instance in
subsection (e) and the last four paragraphs of Section 9.01.
|
|
42.
|
Section
10.01 (Events of Default) is hereby amended
by:
|
|
(a)
|
changing
any reference to “Owner” to “Master Servicer”;
|
|
(b)
|
adding
the words “except with respect to clause (xi) of this Section 10.01,” at
the beginning of the second paragraph;
and
|
|
(c)
|
adding
the words “within the applicable cure period” after the word “remedied” in
the first line of the second
paragraph.
|
|
43.
|
Section
10.02 (Waiver of Defaults) is hereby amended by changing the reference
to
“Owner” to “Master Servicer with the prior written consent of the NIMS
Insurer, if any”.
|
|
44.
|
Section
11.01 (Termination) is hereby amended by restating subclause (ii)
thereof
to read as below and adding the following sentence at the end of
the first
paragraph of Section 11.01:
|
|
(ii)
|
mutual
consent of the Servicer and the Master Servicer in writing, provided
such
termination is also acceptable to the Rating
Agencies.
|
At
the
time of any termination of the Servicer pursuant to Section 11.01, the Servicer
shall be entitled to all accrued and unpaid Servicing Fees and unreimbursed
Servicing Advances and Monthly Advances; provided, however, in the event of
a
termination for cause under Section 10.01 hereof, such unreimbursed amounts
shall not be reimbursed to the Servicer until such amounts are received by
the
Trust Fund from the related Mortgage Loans.
|
45.
|
Section
11.02 (Termination Without Cause) is hereby amended by adding the
following to the end of the second
paragraph:
|
In
addition, the Servicer shall be entitled to receive from the Owner, with
respect to each Mortgage Loan subject to termination, pursuant to this Section
11.02, an amount equal to the sum of: (i) unreimbursed Monthly Advances and
Servicing Advances; (ii) costs to transfer the Mortgage Loans to the successor
servicer; and (iii) Servicing Fees and REO Disposition Fees earned but not
yet
collected.
|
46.
|
Section
12.01 (Successor to Servicer) is hereby amended in its entirety to
read as
follows:
|
Simultaneously
with the termination of the Servicer’s responsibilities and duties under this
Agreement pursuant to Sections 8.04, 10.01, 11.01(ii) or 11.02, the Master
Servicer shall, in accordance with the provisions of the Pooling and Servicing
Agreement (including any transition period provided therein) (i) succeed to
and
assume all of the Servicer’s responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor meeting the eligibility
requirements of this Agreement, and which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this
Agreement with the termination of the Servicer’s responsibilities, duties and
liabilities under this Agreement. Any successor to the Servicer that is not
at
that time a Servicer of other mortgage loans for the Trust Fund shall be subject
to the approval of the Master Servicer, the Owner and each Rating Agency (as
such term is defined in the Pooling and Servicing Agreement). Unless the
successor servicer is at that time a servicer of other mortgage loans for the
Trust Fund, each Rating Agency must deliver to the Trustee a letter to the
effect that such transfer of servicing will not result in a qualification,
withdrawal or downgrade of the then-current rating of any of the Certificates.
In connection with such appointment and assumption, the Master Servicer or
the
Owner, as applicable, may make such arrangements for the compensation of such
successor out of payments on the Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Servicer under this Agreement. In the event that the Servicer’s
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Servicer of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Trustee on behalf of the Trust Fund under Section 3.03 shall be applicable
to
the Servicer notwithstanding any such resignation or termination of the
Servicer, or the termination of this Agreement.
Within
a
reasonable period of time, but in no event longer than 30 days of the
appointment of a successor entity, the Servicer shall prepare, execute and
deliver to the successor entity any and all documents and other instruments,
place in such successor’s possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of
such notice of termination. The Servicer shall cooperate with the Trustee and
the Master Servicer, as applicable, and such successor in effecting the
termination of the Servicer’s responsibilities and rights hereunder and the
transfer of servicing responsibilities to the successor Servicer, including
without limitation, the transfer to such successor for administration by it
of
all cash amounts which shall at the time be credited by the Servicer to the
Account or any Escrow Account or thereafter received with respect to the
Mortgage Loans.
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Trustee, the Servicer and the Master Servicer an instrument (i) accepting
such appointment, wherein the successor shall make an assumption of the due
and
punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Servicer or termination of this Agreement pursuant to
Sections 8.04, 10.01, 11.01 or 11.02 shall not affect any claims that the Master
Servicer or the Trustee may have against the Servicer arising out of the
Servicer’s actions or failure to act prior to any such termination or
resignation.
The
Servicer shall deliver, within three (3) Business Days of the appointment of
a
successor Servicer, the funds in the Custodial Account and Escrow Account and
all collateral files, credit files and related documents and statements held
by
it hereunder to the successor Servicer and the Servicer shall account for all
funds and shall execute and deliver such instruments and do such other things
as
may reasonably be required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations and liabilities
of the Servicer.
Upon
a
successor’s acceptance of appointment as such, the Servicer shall notify the
Trustee and Master Servicer of such appointment in accordance with the notice
procedures set forth herein.
Except
as
otherwise provided in this Agreement, all reasonable costs and expenses incurred
in connection with any transfer of servicing hereunder (whether as a result
of
termination pursuant to Section 10.01 or removal of the Servicer or resignation
of the Servicer or otherwise), including, without limitation, the costs and
expenses of the Master Servicer or any other Person in appointing a successor
servicer, or of the Master Servicer in assuming the responsibilities of the
Servicer hereunder, or of transferring the Servicing Files and the other
necessary data to the successor servicer shall be paid by the terminated,
removed or resigning Servicer from its own funds without
reimbursement.
|
47.
|
Section
12.02 (Amendment) is hereby amended by adding the words “, with the
written consent of the Master Servicer, the Trustee and the NIMS
Insurer”
after the word “Owner”.
|
|
48.
|
Section
12.04 (Duration of Agreement) is hereby amended by deleting the last
sentence thereof.
|
|
49.
|
Section
12.05 is hereby amended by replacing the
following:
|
Xxxxx
Fargo Bank, N.A.
1
Home
Xxxxxx
Xxx
Xxxxxx, XX 00000-0000
Attention:
Xxxx X. Xxxxx, MAC X2401-042
Fax:
515/000-0000
With:
Xxxxx
Fargo Bank, N.A.
1
Home
Xxxxxx
Xxx
Xxxxxx, XX 00000-0000
Attention:
Xxxx X. Xxxxx, MAC X2302-033
Fax:
515/000-0000
|
50.
|
Section
12.10 (Assignment by Owner) is hereby replaced with
[Reserved].
|
|
51.
|
Section
12.18 (Third Party Beneficiaries) is hereby amended in its entirety
to
read as follows:
|
Section
12.18 Intended
Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that the Trust Fund, the Master Servicer, the
Depositor and the Trustee receive the benefit of the provisions of this
Agreement as intended third party beneficiaries of this Agreement to the extent
of such provisions. The Servicer shall have the same obligations to the Trust
Fund, the Master Servicer, the Depositor and the Trustee as if they were parties
to this Agreement, and the Trust Fund, the Master Servicer, the Depositor and
the Trustee shall have the same rights and remedies to enforce the provisions
of
this Agreement as if they were parties to this Agreement. The Servicer shall
only take direction from the Master Servicer (if direction by the Master
Servicer is required under this Agreement) unless otherwise directed by this
Agreement. Notwithstanding the foregoing, all rights and obligations of the
Trust Fund, the Master Servicer, the Depositor and the Trustee hereunder (other
than the right to indemnification) shall terminate upon termination of the
Pooling and Servicing Agreement and of the Trust Fund pursuant to the Pooling
and Servicing Agreement.
|
52.
|
New
Exhibit D-1 (Form of Monthly Remittance Advice), Exhibit D-2 (Standard
Layout for Monthly Defaulted Loan Report) and Exhibit D-3 (Form of
Loan
Loss Report) are hereby added to the Servicing Agreement and are
attached
hereto as Exhibits X-0, X-0 and D-3, respectively.
|
|
53.
|
Exhibit
H to the Servicing Agreement is hereby replaced in its entirety by
Exhibit
E attached hereto.
|
|
54.
|
A
new Exhibit J (Transaction Parties) is hereby added to the Servicing
Agreement and is attached hereto as Exhibit F.
|
|
55.
|
A
new Exhibit K is hereby added to the Servicing Agreement and is attached
hereto as Exhibit G.
|
EXHIBIT
B
Pooling
and Servicing Agreement
EXHIBIT
C
Servicing
Agreement
HSBC
BANK (USA) INC.
Owner
and
XXXXX
FARGO BANK, N.A.
Servicer
SERVICING
AGREEMENT
Dated
as of June 30, 2006
TABLE
OF CONTENTS
|
ARTICLE
I
|
|
|
DEFINITIONS
|
1
|
|
|
|
|
ARTICLE
II
|
|
|
POSSESSION
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY
OF
DOCUMENTS
|
12
|
|
|
|
|
ARTICLE
III
|
|
|
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
|
14
|
|
|
|
|
ARTICLE
IV
|
|
|
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
|
19
|
|
|
|
|
ARTICLE
V
|
|
|
PAYMENTS
TO OWNER
|
38
|
|
|
|
|
ARTICLE
VI
|
|
|
GENERAL
SERVICING PROCEDURES
|
40
|
|
|
|
|
ARTICLE
VII
|
|
|
SERVICER
TO COOPERATE
|
46
|
|
|
|
|
ARTICLE
VIII
|
|
|
THE
SERVICER
|
47
|
|
|
|
|
ARTICLE
IX
|
|
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SECURITIZATION
TRANSACTIONS
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49
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ARTICLE
X
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DEFAULT
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58
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ARTICLE
XI
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TERMINATION
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61
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ARTICLE
XII
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MISCELLANEOUS
PROVISIONS
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61
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EXHIBITS
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Exhibit
A
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Form
of Acknowledgment Agreement
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Exhibit
B
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Form
of Assignment and Assumption
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Exhibit
C
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Reserved
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Exhibit
D
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Reserved
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Exhibit
E
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Form
of Custodial Account Certification
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Exhibit
F
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Form
of Escrow Account Certification
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Exhibit
G
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Form
of Power or Attorney
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Exhibit
H
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Servicing
Criteria
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Exhibit
I
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Sarbanes
Certification
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This
is a
Servicing Agreement for fixed-rate and adjustable-rate residential first
lien
and second lien mortgage loans, dated and effective as of June 30, 2006,
and is
executed between HSBC Bank (USA) Inc., as owner (the "Owner"), and Xxxxx
Fargo
Bank, N.A., as servicer (the "Servicer").
WITNESSETH
WHEREAS,
the Owner has agreed to sell, from time to time, and the Servicer shall
purchase, from time to time, the servicing rights pursuant to that certain
Flow
Servicing Rights Purchase and Sale Agreement dated as of between the Owner
and
the Servicer;
WHEREAS,
the parties desire to set forth the terms and conditions as to the servicing
of
the Mortgage Loans in which Servicer owns the servicing rights, pursuant
to this
Servicing Agreement;
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and
for other good and valuable consideration, the receipt and adequacy of which
is
hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE
I
DEFINITIONS
Whenever
used herein, the following words and phrases, unless the content otherwise
requires, shall have the following meanings:
Accepted
Servicing Practices:
With
respect to any Mortgage Loan, those customary mortgage servicing practices
(including collection procedures) of prudent mortgage lending institutions
which
service mortgage loans of the same type as the Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located. Such standard
of
care shall not be lower than that the Company or its designee customarily
employs and exercises in servicing and administering similar mortgage loans
for
its own account and shall be in full compliance with the terms of the Mortgage
Loan Documents and all applicable federal, state and local legal and regulatory
requirements.
Acknowledgment
Agreement:
An
acknowledgment agreement substantially in the form of Exhibit A, agreed to
by
the parties hereto that makes specific reference to this Agreement to be
executed on or prior to each Sale Date with respect to servicing of Mortgage
Loans by the Servicer.
Adjustment
Date:
As to
each adjustable rate Mortgage Loan, the date on which the Mortgage Interest
Rate
is adjusted in accordance with the terms of the related Mortgage Note and
Mortgage.
1
Agency/Agencies:
Xxxxxx
Xxx, Xxxxxxx Mac or GNMA, or any of them as applicable.
Agency
Sale:
Any
sale or transfer of some or all of the Mortgage Loans by the Owner to an
Agency
which sale or transfer is not a Securitization Transaction or Whole Loan
Transfer.
Agreement:
This
Servicing Agreement and all exhibits and amendments hereof and supplements
hereto.
Assignment
of Mortgage:
An
assignment of the Mortgage, notice of transfer or equivalent instrument in
recordable form, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect the ownership of the Mortgage
to the Owner, or if the related Mortgage has been recorded in the name of
MERS
or its designee, such actions as are necessary to cause the Owner to be shown
as
the owner of the related Mortgage on the records of MERS for purposes of
the
system of recording transfers of beneficial ownership of mortgages maintained
by
MERS, including assignment of the MIN Number which will appear either on
the
Mortgage or the Assignment of Mortgage to MERS.
Assignment
of Mortgage Note and Pledge Agreement:
With
respect to a Cooperative Loan, an assignment of the Mortgage Note and Pledge
Agreement.
Assignment
of Proprietary Lease:
With
respect to a Cooperative Loan, an assignment of the Proprietary Lease sufficient
under the laws of the jurisdiction wherein the related Cooperative Apartment
is
located to effect the assignment of such Proprietary Lease.
Business
Day:
Any day
other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings
and loan institutions in the states where the parties are located are authorized
or obligated by law or executive order to be closed.
Buydown
Agreement:
An
agreement between the originator of a Mortgage Loan and a Mortgagor, or an
agreement among the originator, a Mortgagor and a seller of a Mortgaged Property
or a third party with respect to a Mortgage Loan which provides for the
application of Buydown Funds.
Buydown
Funds:
In
respect of any Buydown Mortgage Loan, any amount contributed by the seller
of a
Mortgaged Property subject to a Buydown Mortgage Loan, the buyer of such
property, or any other source, plus interest earned thereon, in order to
enable
the Mortgagor to reduce the payments required to be made from the Mortgagor’s
funds in the early years of a Mortgage Loan.
Buydown
Mortgage Loan:
Any
Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the
Mortgagor pays less than the full monthly payments specified in the Mortgage
Note for a specified period, and (ii) the difference between the payments
required under such Buydown Agreement and the Mortgage Note is provided from
Buydown Funds.
2
Buydown
Period:
The
period of time when a Buydown Agreement is in effect with respect to a related
Buydown Mortgage Loan.
Code:
The
Internal Revenue Code of 1986, as it may be amended from time to time or
any
successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Commission:
The
United States Securities and Exchange Commission.
Commitment
Letter:
The
commitment by Servicer to purchase the Servicing Rights from Owner, pursuant
to
the Purchase Agreement.
Condemnation
Proceeds:
All
awards or settlements in respect of a Mortgaged Property, whether permanent
or
temporary, partial or entire, by exercise of the power of eminent domain
or
condemnation, to the extent not required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents.
Cooperative:
The
entity that holds title (fee or an acceptable leasehold estate) to all of
the
real property that the Project comprises, including the land, separate dwelling
units and all common areas.
Cooperative
Apartment:
The
specific dwelling unit relating to a Cooperative Loan.
Cooperative
Loan:
A
Mortgage Loan that is secured by a first lien on and a perfected security
interest in Cooperative Shares and a Proprietary Lease granting exclusive
rights
to occupy the related Cooperative Apartment in the building owned by the
related
cooperative.
Cooperative
Shares:
The
shares of stock issued by a Cooperative, owned by the Mortgagor, and allocated
to a Cooperative Apartment and represented by a Stock Certificate.
Custodial
Account:
The
separate account or accounts created and maintained pursuant to Section
4.04.
Custodial
Agreement:
The
agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents.
Custodian:
The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement
as
provided therein.
Cut-off
Date:
With
respect to the transfer of servicing by the Owner to the Servicer for any
group
of Mortgage Loans, the date so specified in the related Acknowledgment
Agreement.
Depositor:
The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
3
Determination
Date:
The
Business Day prior to the Remittance Date.
Due
Date:
The
first day of the month on which the Monthly Payment is due on a Mortgage
Loan,
exclusive of any days of grace.
Due
Period:
With
respect to each Remittance Date, the period commencing on the second day
of the
month preceding the month of the Remittance Date and ending on the first
day of
the month of the Remittance Date.
Eligible
Account:
Either
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company the short-term unsecured debt
obligations of which (or, in the case of a depository institution or trust
company that is the principal subsidiary of a holding company, the short-term
unsecured debt obligations of such holding company) are rated A-1 by S&P or
Prime-1 by Moody's (or a comparable rating if another rating agency is specified
by the Owner by written notice to the Servicer) at the time any amounts are
held
on deposit therein, (ii) an account or accounts the deposits in which are
fully
insured by the FDIC or (iii) a trust account or accounts maintained with
a
federal or state chartered depository institution or trust company acting
in its
fiduciary capacity. Eligible Accounts may bear interest.
Errors
and Omissions Insurance Policy:
An
errors and omissions insurance policy to be maintained by the Servicer pursuant
to Section 4.12.
Escrow
Account:
The
separate account or accounts created and maintained pursuant to Section 4.06.
Escrow
Payments:
With
respect to any Mortgage Loan, the amounts constituting ground rents, taxes,
assessments, water rates, sewer rents, municipal charges, mortgage insurance
premiums, fire and hazard insurance premiums, condominium charges, and any
other
payments required to be escrowed by the Mortgagor with the mortgagee pursuant
to
the Mortgage or any other related document.
Event
of Default:
Any one
of the conditions or circumstances enumerated in Section 10.01.
Exchange
Act:
The
Securities Exchange Act of 1934, as amended.
Xxxxxx
Mae:
The
entity formerly known as Federal National Mortgage Association (FNMA), or
any
successor thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity
Bond:
A
fidelity bond to be maintained by the Servicer pursuant to Section
4.12.
4
First
Remittance Date:
With
respect to each Mortgage Loan, the 18th day (or if such day is not a Business
Day, the immediately following Business Day) of the month following the month
in
which the related Cut-off Date occurs, or such other day of the month as
may be
specified in the related Acknowledgment Agreement.
Fitch:
Fitch
Ratings or any successor in interest.
Xxxxxxx
Mac:
The
entity also known as the Federal Home Loan Mortgage Corporation (FHLMC),
or any
successor thereto.
Insurance
Proceeds:
With
respect to each Mortgage Loan, proceeds of insurance policies insuring the
Mortgage Loan or the related Mortgaged Property.
Liquidation
Proceeds:
Cash
received in connection with the liquidation of a defaulted Mortgage Loan,
whether through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or the sale of the related Mortgaged Property
if
the Mortgaged Property is acquired in satisfaction of the Mortgage Loan,
other
than amounts received following the acquisition of REO Property.
Loan-to-Value
Ratio or LTV:
With
respect to any Mortgage Loan, the ratio of the original loan amount of the
Mortgage Loan at its origination (unless otherwise indicated) to the Appraised
Value of the Mortgaged Property.
LPMI
Policy: A
policy
of primary mortgage guaranty insurance issued by a Qualified Insurer pursuant
to
which the related premium is to be paid by the servicer of the related Mortgage
Loan from payments of interest made by the Mortgagor.
Master
Servicer:
With
respect to any Securitization Transaction, the “master servicer,” if any,
identified in the related transaction documents.
MERS:
Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or
any
successor in interest thereto.
MERS
Mortgage Loan:
Any
Mortgage Loan as to which the related Mortgage or Assignment of Mortgage
has
been registered with MERS on the MERS System
MERS
System:
The
system of recording transfers of mortgages electronically maintained by
MERS.
MIN:
The
Mortgage Identification Number used to identify mortgage loans registered
under
MERS.
Monthly
Advance:
The
portion of each Monthly Payment that is delinquent with respect to each Mortgage
Loan at the close of business on the Determination Date required to be advanced
by the Servicer pursuant to Section 5.03 on the Business Day immediately
preceding the Remittance Date of the related month.
5
Monthly
Payment:
The
scheduled monthly payment of principal and interest or, with respect to an
interest only Mortgage Loan, payments of (i) interest, or (ii) principal
and
interest, if applicable, on a Mortgage Loan.
Moody’s:
Xxxxx’x
Investors Service, Inc. or any successor in interest.
Mortgage:
The
mortgage, deed of trust or other instrument securing a Mortgage Note, which
creates a first lien on an unsubordinated estate in fee simple in real property
securing the Mortgage Note or the Pledge Agreement securing the Mortgage
Note
for a Cooperative Loan.
Mortgage
File:
The
Mortgage Loan Documents, and any additional documents required to be added
to
the Mortgage File pursuant to this Agreement.
Mortgage
Impairment Insurance Policy:
A
mortgage impairment or blanket hazard insurance policy as described in Section
4.11.
Mortgage
Interest Rate:
The
annual rate of interest borne on a Mortgage Note in accordance with the
provisions of the Mortgage Note.
Mortgage
Loan:
An
individual mortgage loan or a Cooperative Loan which is the subject of this
Agreement, each Mortgage Loan or a Cooperative Loan originally sold and subject
to this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan or a Cooperative Loan includes without limitation the Servicing File,
the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan or a Cooperative Loan.
Mortgage
Loan Documents:
With
respect to a Mortgage Loan, the original related Mortgage Note with applicable
addenda and riders, the original related Mortgage and the originals of any
required addenda and riders, the original related Assignment of Mortgage
and any
original intervening related Assignments of Mortgage, the original related
title
insurance policy and evidence of the related PMI Policy or LPMI Policy, if
any.
Mortgage
Loan Remittance Rate:
With
respect to each Mortgage Loan, the annual rate of interest remitted to the
Owner, which shall be equal to the related Mortgage Interest Rate minus the
Servicing Fee Rate and minus any lender paid PMI Policy premiums, if
applicable.
Mortgage
Loan Schedule:
A
schedule of Mortgage Loans subject to this Agreement, annexed to each
Acknowledgment Agreement.
Mortgage
Note:
The
original executed note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage and riders thereto.
Mortgaged
Property:
The
real property consisting of a fee simple interest in a single parcel of real
property improved by a residential dwelling securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the
Cooperative Apartment.
6
Mortgagor:
The
obligor on a Mortgage Note, the owner of the Mortgaged Property and the grantor
or mortgagor named in the related Mortgage and such grantor's or mortgagor's
successor in title to the Mortgaged Property.
Nonrecoverable
Monthly Advance:
Any
Monthly Advance previously made or proposed to be made in respect of a Mortgage
Loan or REO Property that, in the good faith business judgment of the Servicer,
will not, or, in the case of a proposed Monthly Advance, would not be,
ultimately recoverable from related late payments, Insurance Proceeds or
Liquidation Proceeds on such Mortgage Loan or REO Property as provided
herein.
Officer's
Certificate:
A
certificate signed by the Chairman of the Board or the Vice Chairman of the
Board or the President or a Vice President or an Assistant Vice President
and
certified by the Treasurer or the Secretary or one of the Assistant Treasurers
or Assistant Secretaries of the Servicer, and delivered to the Owner as required
by this Agreement.
Opinion
of Counsel:
A
written opinion of counsel, who may be an employee of the Servicer, reasonably
acceptable to the Owner.
Owner:
HSBC
Bank (USA) Inc. or its successor in interest or any successor to the Owner
under
this Agreement as herein provided.
Person:
Any
individual, corporation, partnership, joint venture, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
Pledge
Agreement:
With
respect to a Cooperative Loan, the specific agreement creating a first lien
on
and pledge of the Cooperative Shares and the appurtenant Proprietary
Lease.
Pledge
Instruments:
With
respect to a Cooperative Loan, the Stock Power, the Assignment of the
Proprietary Lease and the Assignment of the Mortgage Note and Pledge
Agreement.
PMI
Policy:
A
policy of primary mortgage guaranty insurance evidenced by an electronic
form
and certificate number issued by a Qualified Insurer, as required by this
Agreement with respect to certain Mortgage Loans.
Prepayment
Interest Shortfall:
As to
any Remittance Date and each Mortgage Loan subject to a Principal Prepayment
received during the calendar month preceding such Remittance Date, the amount,
if any, by which one month’s interest at the related Mortgage Loan Remittance
Rate on such Principal Prepayment exceeds the amount of interest paid in
connection with such Principal Prepayment.
Prepayment
Penalty:
Payments, penalties, fees or charges calculated pursuant to the Mortgage
Note
and due pursuant
to the terms of the
Mortgage
Loan Documents as the result of a Principal Prepayment
of the
Mortgage Loan, not otherwise due thereon in respect of principal or
interest.
7
Prime
Rate:
The
prime rate announced to be in effect from time to time, as published as the
average rate in The
Wall Street Journal.
Principal
Prepayment:
Any
payment or other recovery of principal on a Mortgage Loan which is received
in
advance of its scheduled Due Date, including any prepayment penalty or premium
thereon and which is not accompanied by an amount of interest representing
scheduled interest due on any date or dates in any month or months subsequent
to
the month of prepayment.
Principal
Prepayment Period:
Either
A(i)
with respect to any Principal Prepayment in full, the period that commences
on
and includes the 14th day of the month immediately preceding the month in
which
such Remittance Date occurs and ends on and includes the 13th day of the
month
in which such Remittance Date occurs, and (ii) with respect to any partial
Principal Prepayment, the calendar month preceding the month in which the
Remittance Date occurs, or (B) the calendar month preceding the month in
which
the Remittance Date occurs, as set forth in the related Commitment Letter
.
Project:
With
respect to a Cooperative Loan, all real property owned by the related
Cooperative including the land, separate dwelling units and all common
areas.
Proprietary
Lease:
With
respect to a Cooperative Loan, a lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchase
Agreement:
The
Flow Servicing Rights Purchase and Sale Agreement dated as of June 30, 2006
between the Owner and the Servicer;
Qualified
Depository:
A
deposit account or accounts maintained with a federal or state chartered
depository institution the deposits in which are insured by the FDIC to the
applicable limits and the short-term unsecured debt obligations of which
(or, in
the case of a depository institution that is a subsidiary of a holding company,
the short-term unsecured debt obligations of such holding company) are rated
A-1
by Standard & Poor’s Ratings Services or Prime-1 by Xxxxx’x Investors
Service, Inc. (or a comparable rating if another rating agency is specified
by
the Owner by written notice to the Servicer) at the time any deposits are
held
on deposit therein.
Qualified
Insurer:
A
mortgage guaranty insurance company duly authorized and licensed where required
by law to transact mortgage guaranty insurance business and approved as an
insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating
Agency:
Each of
Fitch, Moody’s and S&P or their respective successors. If such agencies or
their successors are no longer in existence, “Rating Agencies” shall be such
nationally recognized statistical rating agencies, or other comparable person,
agreed upon and designated by the Owner.
Reconstitution:
Any
Securitization Transaction or Whole Loan Transfer.
8
Reconstitution
Agreement:
The
agreement or agreements entered into by the Servicer and the Owner and/or
certain third parties on the Reconstitution Date or Dates with respect to
any or
all of the Mortgage Loans serviced hereunder, in connection with a Whole
Loan
Transfer or Securitization Transaction.
Reconstitution
Date:
The
date on which any or all of the Mortgage Loans serviced under this Agreement
may
be removed from this Agreement and reconstituted as part of an Agency Sale,
Securitization Transaction or Whole Loan Transfer pursuant to Section 9.01
hereof. The Reconstitution Date shall be such date which the Owner shall
designate. On such date, the Mortgage Loans transferred may cease to be covered
by this Agreement and the Servicer's servicing responsibilities may cease
under
this Agreement with respect to the related transferred Mortgage
Loans.
Regulation
AB:
Subpart
229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject
to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
REMIC:
A "real
estate mortgage investment conduit" within the meaning of Section 860D of
the
Code.
REMIC
Provisions:
Provisions of the federal income tax law relating to a REMIC, which appear
at
Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the
Code,
and related provisions, regulations, rulings or pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
Remittance
Date:
The
18th calendar day (or if such 18th day is not a Business Day, the first Business
Day immediately following) of any month, beginning with the First Remittance
Date.
REO
Account:
The
account or accounts created and maintained pursuant to Section 4.16 of this
Agreement.
REO
Disposition:
The
final sale by the Servicer of any REO Property.
REO
Disposition Fee:
The REO
Disposition fee shall be the greater of one percent (1%) of the gross sales
price of the REO Property or $1,000.00 per REO Property.
REO
Disposition Proceeds:
All
amounts received with respect to an REO Disposition pursuant to Section
4.16.
REO
Property:
A
Mortgaged Property acquired by the Servicer on behalf of the Owner through
foreclosure or by deed in lieu of foreclosure, as described in Section
4.16.
9
Sale
Date:
Each
date on which the Servicer acquires the right, title and interest in and
to the
Servicing Rights attendant to Mortgage Loans.
Sarbanes
Certifying Party:
A
Person who files a Xxxxxxxx-Xxxxx certification directly with the Securities
and
Exchange Commission pursuant to the Xxxxxxxx-Xxxxx Act of 2002.
Securities
Act of 1933 or the 1933 Act:
The
Securities Act of 1933, as amended.
Securitization
Transaction:
Any
transaction involving either (a) a sale or other transfer of some or all
of the
Mortgage Loans directly or indirectly to an issuing entity in connection
with an
issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities or (b) an issuance of publicly offered or privately
placed, rated or unrated securities, the payments on which are determined
primarily by reference to one or more portfolios of residential mortgage
loans
consisting, in whole or in part, of some or all of the Mortgage
Loans.
Seller:
Each
person who sold Mortgage Loans to the Owner.
Servicer:
Xxxxx
Fargo Bank, N.A., or its successor in interest or assigns, or any successor
to
the Servicer under this Agreement appointed as herein provided.
Servicer
Information:
As
defined in Section 9.01(h)(i)(A).
Servicing
Advances:
All
customary, reasonable and necessary "out of pocket" costs and expenses
(including reasonable attorney's fees and disbursements) incurred in the
performance by the Servicer of its servicing obligations, including, but
not
limited to, the cost of (a) the preservation, restoration and protection
of the
Mortgaged Property, (b) any enforcement or judicial proceedings, including
foreclosures, (c) the management and liquidation of any REO Property and
(d)
compliance with the obligations under Section 4.08 (excluding the Servicer’s
obligation to pay the premiums on LPMI Policies).
Servicing
Criteria:
The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.
Servicing
Fee:
With
respect to each Mortgage Loan, the amount of the annual fee the Owner shall
pay
to the Servicer, which shall, for a period of one full month, be equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly,
computed on the basis of the same principal amount and period respecting
which
any related interest payment on a Mortgage Loan is received. The obligation
of
the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect
to
interest from Liquidation Proceeds, to the extent permitted by Section 4.05)
of
such Monthly Payment collected by the Servicer, or as otherwise provided
under
Section 4.05.
Servicing
Fee Rate:
the
percentage per annum with respect to each Mortgage Loan set forth in the
applicable Mortgage Loan Schedule.
10
Servicing
File:
With
respect to each Mortgage Loan, the file retained by the Servicer consisting
of
originals of all documents in the Mortgage File which are not delivered to
the
Owner or the Custodian and copies of the Mortgage Loan Documents listed in
the
Custodial Agreement, if applicable, the originals of which are delivered
to the
Custodian or the Owner pursuant to Section 2.03.
Servicing
Officer:
Any
officer of the Servicer involved in or responsible for the administration
and
servicing of the Mortgage Loans whose name appears on a list of servicing
officers furnished by the Servicer to the Owner upon request, as such list
may
from time to time be amended.
S&P:
Standard & Poor’s Rating Services, A Division of The XxXxxx-Xxxx Companies,
Inc. or any successor in interest.
Stated
Principal Balance:
As to
each Mortgage Loan and as of any date of determination, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date, whether or not received, minus (ii)
all
amounts previously distributed to the Owner with respect to the related Mortgage
Loan representing payments or recoveries of principal.
Stock
Certificate:
With
respect to a Cooperative Loan, a certificate evidencing ownership of the
Cooperative Shares issued by the Cooperative
Stock
Power:
With
respect to a Cooperative Loan, an assignment of the Stock Certificate or
an
assignment of the Cooperative Shares issued by the Cooperative.
Subcontractor:
Any
vendor, subcontractor or other Person that is not responsible for the overall
servicing (as “servicing” is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or
more
discrete functions identified in Item 1122(d) of Regulation AB with respect
to
Mortgage Loans under the direction or authority of the Servicer or a
Subservicer.
Subservicer:
Any
person that services Mortgage Loans on behalf of the Servicer or any Subservicer
and is responsible for the performance (whether directly or through Subservicers
or Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under this Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.
Transfer
Date:
Each
date on which Servicing Rights are transferred to the Servicer
hereunder.
Whole
Loan Transfer:
Any
sale or transfer of some or all of the Mortgage Loans by the Owner to a third
party, which sale or transfer is not a Securitization Transaction or Agency
Sale.
11
ARTICLE
II
POSSESSION
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF
DOCUMENTS
Section
2.01 Possession
of Mortgage Files; Maintenance of Servicing Files.
From
and
after each Transfer Date or Sale Date, as applicable, the contents of each
Mortgage File not delivered to the Owner or held by the Custodian shall be
held
in trust by the Servicer for the benefit of the Owner as the owner thereof.
The
Servicer shall maintain a Servicing File consisting of a copy of the contents
of
each Mortgage File and the originals of the documents in each Mortgage File
not
delivered to the Owner or the Custodian, as applicable. The possession of
each
Servicing File by the Servicer is at the will of the Owner for the sole purpose
of servicing the related Mortgage Loan, and such retention and possession
by the
Servicer is in a custodial capacity only. The ownership of each Mortgage
Note,
the related Mortgage and the related Mortgage File are vested in the Owner,
and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
vest
immediately in the Owner and shall be retained and maintained by the Servicer,
in trust, at the will of the Owner and only in such custodial capacity. The
Servicer shall release its custody of the contents of any Servicing File
only in
accordance with written instructions from the Owner, unless such release
is
required as incidental to the Servicer's servicing of the Mortgage Loans
or is
in connection with a repurchase of any Mortgage Loan. All such costs associated
with the release, transfer and re-delivery of
any Servicing Files to
the
Servicer shall be the responsibility of the party in possession of such file
or
files, unless otherwise provided herein.
In
addition, in connection with the assignment of any MERS Mortgage Loan, the
Servicer agrees that it will cause the MERS System to indicate that such
Mortgage Loan has been assigned by the Servicer to the Owner in accordance
with
this Agreement by including (or deleting, in the case of a Mortgage Loan
repurchased in accordance with this Agreement) in such computer files the
information required by the MERS System to identify the Owner as the beneficial
owner of such Mortgage Loan.
12
Section
2.02 Books
and Records; Transfers of Mortgage Loans.
All
rights arising out of the Mortgage Loans, including, but not limited to,
all
funds received on or in connection with the Mortgage Loans, shall be received
and held by the Servicer in trust for the benefit of the Owner as owner of
the
Mortgage Loans, and the Servicer shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans. Notwithstanding the foregoing,
beneficial ownership of each Mortgage and the related Mortgage Note shall
be
vested solely in the Owner or the appropriate designee of the Owner, as the
case
may be.
To
the
extent that original documents are not required for purposes of realization
of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer
may be in the form of microfilm or microfiche or such other reliable means
of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Servicer complies with the requirements of the
Xxxxxx
Xxx Selling and Servicing Guide, as amended from time to time.
The
Servicer shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Owner or its designee the related Servicing
File
during the time the Owner retains ownership of a Mortgage Loan and thereafter
in
accordance with applicable laws and regulations.
The
Servicer shall keep at its servicing office books and records in which, subject
to such reasonable regulations as it may prescribe, the Servicer shall note
transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made unless
such transfer is in compliance with the terms hereof. For the purposes of
this
Agreement, the Servicer shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Owner may,
subject to the terms of this Agreement, sell and transfer one or more of
the
Mortgage Loans. Upon receipt of notice of the transfer, the Servicer shall
xxxx
its books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Owner from its obligations hereunder
with respect to the Mortgage Loans sold or transferred. Such notification
of a
transfer shall include a final loan schedule which shall be received by the
Servicer no fewer than five (5) Business Days before the last Business Day
of
the month. If such notification is not received as specified above, the
Servicer’s duties to remit and report as required by Section 5 shall begin with
the following Due Period.
Section
2.03 Custodial
Agreement; Delivery of Documents.
The
Servicer shall forward to the Owner or the Custodian, as applicable, original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within
one week of their execution, provided, however, that the Servicer shall provide
the Owner or the Custodian, as applicable, with a certified true copy of
any
such document submitted for recordation within ten (10) days of its execution,
and shall provide the original of any document submitted for recordation
or a
copy of such document certified by the appropriate public recording office
to be
a true and complete copy of the original within 60 days of its submission
for
recordation.
13
In
the
event the public recording office is delayed in returning any original document,
the Servicer shall deliver to the Owner or the Custodian within 180 days
of its
submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that
the
recorded document has not been delivered to the Custodian due solely to a
delay
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Servicer will be required
to
deliver the document to the Owner or the Custodian by the date specified
in (iv)
above. An extension of the date specified in (iv) above may be requested
from
the Owner, which consent shall not be unreasonably withheld; provided that
in
any event, the Servicer shall cause such document to be delivered to the
Owner
within one year of its submission for recordation.
In
the
event that new, replacement, substitute or additional Stock Certificates
are
issued with respect to existing Cooperative Shares, the Servicer immediately
shall deliver to the Owner or the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall
be
subject to the related Pledge Instruments and shall be subject to all of
the
terms, covenants and conditions of this Agreement.
The
Owner shall designate the Servicer to obtain Mortgage Files from the Custodian
on behalf of the Owner. From time to time and as appropriate for the servicing
or foreclosure of a Mortgage Loan, including for this purpose collection
under any Primary Insurance Policy, the Servicer may request the release
of a
Mortgage File held by the Custodian. The Servicer will provide the Custodian
with two copies of a release request or an electronic release request in
a
format acceptable to the Custodian. The Servicer will be obligated to
return the related Mortgage File to the Custodian when the need therefore
by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and
the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the
Custodial Account or the Mortgage File has been delivered to an attorney,
or to
a public trustee or other public official as required by law, for purposes
of
initiating or pursuing legal action or other proceedings for the foreclosure
of
the Mortgaged Loan either judicially or non-judicially.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES REMEDIES AND BREACH
Section
3.01 Servicer
Representations and Warranties.
The
Servicer hereby represents and warrants to the Owner that, as of each Transfer
Date and Sale Date:
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(a)
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Due
Organization and Authority.
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14
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The
Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States
and has
all licenses necessary to carry on its business as now being conducted
and
is licensed, qualified and in good standing in each state where
a
Mortgaged Property is located if the laws of such state require
licensing
or qualification in order to conduct business of the type conducted
by the
Servicer, and in any event the Servicer is in compliance with the
laws of
any such state to the extent necessary to ensure the enforceability
of the
related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Servicer has the
full
power and authority to execute and deliver this Agreement and to
perform
in accordance herewith; the execution, delivery and performance
of this
Agreement (including all instruments of transfer to be delivered
pursuant
to this Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
this Agreement evidences the valid, binding and enforceable obligation
of
the Servicer; and all requisite action has been taken by the Servicer
to
make this Agreement valid and binding upon the Servicer in accordance
with
its terms. No licenses or approvals obtained by the Servicer have
been
suspended or revoked by any court, administrative agency, arbitrator
or
governmental body and no proceedings are pending which might result
in
such suspension or revocation;
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(b)
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Ordinary
Course of Business.
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The
consummation of the transactions contemplated by this Agreement
are in the
ordinary course of business of the Servicer, who is in the business
of
selling and servicing loans, and are not subject to the bulk transfer
or
any similar statutory provisions in effect in any applicable
jurisdiction;
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(c)
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No
Conflicts.
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Neither
the execution and delivery of this Agreement, or the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms
and conditions of this Agreement will conflict with or result in
a breach
or acceleration of any of the terms, articles of incorporation
or by-laws
or any legal restriction or any agreement or instrument to which
the
Servicer is now a party or by which it is bound, or constitute
a default
or result in the violation of any law, rule, regulation, order,
judgment
or decree to which the Servicer or its property is subject, or
impair the
ability of the Owner to realize on the Mortgage Loans, or impair
the value
of the Mortgage Loans;
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15
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(d)
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Ability
to Service.
|
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The
Servicer is an approved seller/servicer of conventional residential
mortgage loans for Xxxxxx Xxx and Xxxxxxx Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing
of
mortgage loans of the same type as the Mortgage Loans. The Servicer
is a
HUD approved mortgagee pursuant to Section 203 of the National
Housing Act
and is in good standing to sell mortgage loans to and service mortgage
loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred,
including
but not limited to a change in insurance coverage, which would
make the
Servicer unable to comply with Xxxxxx Mae or Xxxxxxx Mac eligibility
requirements or which would require notification to either Xxxxxx
Mae,
Xxxxxxx Mac or HUD;
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(e)
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Reasonable
Servicing Fee.
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|
The
Servicer acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire
Servicing Fee shall be treated by the Servicer, for accounting
and tax
purposes, as compensation for the servicing and administration
of the
Mortgage Loans pursuant to this
Agreement;
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(f)
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Ability
to Perform.
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The
Servicer does not believe, nor does it have any reason or cause
to
believe, that it cannot perform each and every covenant contained
in this
Agreement and the Servicer is
solvent;
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(g)
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No
Litigation Pending.
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There
is no action, suit, proceeding or investigation pending or threatened
against the Servicer before any court, administrative agency or
other
tribunal which, either in any one instance or in the aggregate,
may result
in any material adverse change in the business, operations, financial
condition, properties or assets of the Servicer, or in any material
impairment of the right or ability of the Servicer to carry on
its
business substantially as now conducted, or in any material liability
on
the part of the Servicer, or which would draw into question the
validity
of this Agreement or of any action taken or to be contemplated
herein, or
which would be likely to impair materially the ability of the Servicer
to
enter into or perform under the terms of this
Agreement;
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(h)
|
No
Consent Required.
|
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No
consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance
by
the Servicer of or compliance by the Servicer with this Agreement,
or if
required, such approval has been obtained prior to the respective
Transfer
Date or Sale Date Servicer has complied with, and is not in default
under,
any law, ordinance, requirement, regulation, rule, or order applicable
to
its business or properties, the violation of which would materially
and
adversely affect the operations or financial condition of Servicer
or its
ability to perform its obligations
hereunder;
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16
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(i)
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No
Untrue Information.
|
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Neither
this Agreement nor any statement, report or other document furnished
or to
be furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement
of fact or
omits to state a fact necessary to make the statements contained
therein
not misleading;
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(j)
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No
Material Change.
|
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There
has been no material adverse change in the business, operations,
financial
condition or assets of the Servicer since the date of the Servicer’s most
recent financial statements;
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(k)
|
No
Brokers’ Fees.
|
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The
Servicer has not dealt with any broker, investment banker, agent
or other
Person that may be entitled to any commission or compensation in
the
connection with the transactions contemplated hereunder;
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(l)
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MERS.
|
The
Servicer is a member of MERS in good standing and is current in payment of
all
fees and assessments imposed by MERS;
(m) Compliance
with Applicable Laws.
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The
Servicer is not in violation of, and the execution and delivery
of this
Agreement by the Servicer and its performance and compliance with
the
terms of this Agreement will not constitute a violation with respect
to,
any order or decree of any court or any order or regulation of
any
federal, state, municipal or governmental agency having jurisdiction
over
the Servicer or its assets, which violation might have consequences
that
would materially and adversely affect the condition (financial
or
otherwise) or the operation of the Servicer or its assets or might
have
consequences that would materially and adversely affect the performance
of
its obligations and duties hereunder;
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17
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(n)
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Regulation
AB.
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The
Servicer hereby represents to the Owner, that, except as disclosed
in
writing to the Owner: (i) no default, early amortization or other
performance triggering event has occurred as to any securitization
due to
any act or failure to act of the Servicer; (ii) the Servicer has
not been
terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing
performance test or trigger; (iii) no material noncompliance with
the
applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as servicer has
been
disclosed or reported by the Servicer; (iv) no material changes
to the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreement
for
mortgage loans of a type similar to the Mortgage Loans have occurred
during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Servicer’s
financial condition that could have a material adverse impact on
the
performance by the Servicer of its obligations under this Agreement
or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Servicer
or
any Subservicer; and (vii) there are no affiliations, relationships
or
transactions relating to the Servicer or any Subservicer with respect
to
any Securitization Transaction and any party thereto of a type
described
in Item 1119 of Regulation AB; and
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(o)
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Effective
Agreement.
|
The
execution, delivery and performance of this Agreement by Servicer and
consummation of the transactions contemplated hereunder have been or will
be
duly and validly authorized by all necessary organizational or other action;
this Agreement is valid and a legally binding agreement of Servicer enforceable
against Servicer in accordance with its terms, subject to the effect of
insolvency, liquidation, conservatorship and similar laws administered by
the
Federal Deposit Insurance Corporation affecting the contract obligations
of
insured banks and the discretion of a court to grant specific
performance.
Section
3.02 Remedies.
The
Servicer shall indemnify the Owner and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments, and other costs and expenses resulting from any
claim,
demand, defense or assertion based on or grounded upon, or resulting from
a
breach of the Servicer’s representations and warranties contained in this
Agreement. It is understood and agreed that the obligations of the Servicer
to
indemnify the Owner as provided in this Section 3.02 constitute the sole
remedies of the Owner respecting a breach of the foregoing representations
and
warranties. The indemnification obligation of the Servicer as set forth herein
shall survive the termination of this Agreement.
18
Any
cause
of action against the Servicer relating to or arising out of the breach of
any
representations and warranties made in Section 3.01 shall accrue as to any
Mortgage Loan upon (i) discovery of such breach by the Owner or notice thereof
by the Servicer to the Owner, (ii) failure by the Servicer to cure such breach,
and (iii) demand upon the Servicer by the Owner for compliance with this
Agreement.
ARTICLE
IV
ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS
Section
4.01 Servicer
to Act as Servicer.
The
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or through
the utilization of a Subservicer or a Subcontractor, to do any and all things
in
connection with such servicing and administration which the Servicer may
deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices
and, in the case of any Mortgage Loan transferred to a REMIC, with the REMIC
Provisions.
The
Servicer shall be responsible for any and all acts of a Subservicer and a
Subcontractor, and the Servicer’s utilization of a Subservicer or a
Subcontractor shall in no way relieve the liability of the Servicer under
this
Agreement.
Consistent
with the terms of this Agreement and subject to the REMIC Provisions if a
Mortgage Loan has been transferred to a REMIC, the Servicer may waive, modify
or
vary any
term
of any Mortgage Loan or consent to the postponement of strict compliance
with
any such term or in any manner grant indulgence to any Mortgagor if in the
Servicer's reasonable and prudent determination such waiver, modification,
postponement or indulgence is not materially adverse to the Owner, provided,
however, that the Servicer shall not permit any modification with respect
to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive
the
payment thereof or of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal) make additional
advances of additional principal or change the final maturity date on such
Mortgage Loan, unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, imminent. In the
event
that no default exists or is imminent, the Servicer shall request written
consent from the Owner to permit such a modification and the Owner shall
provide
written consent or notify the Servicer of its objection to such modification
within three (3) Business Days of its receipt of the Servicer's request.
Without
limiting the generality of the foregoing, the Servicer shall continue, and
is
hereby authorized and empowered, to execute and deliver on behalf of itself
and
the Owner, all instruments of satisfaction or cancellation, or of partial
or
full release, discharge and all other comparable instruments, with respect
to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Servicer, the Owner shall furnish the Servicer, within five
(5)
Business Days of Servicer’s request, any powers of attorney and other documents
necessary or appropriate to enable the Servicer to carry out its servicing
and
administrative duties under this Agreement.
19
The
Servicer is authorized and empowered by the Owner, in its own name, when
the
Servicer believes it appropriate in its reasonable judgment to register any
Mortgage Loan on the MERS System, or cause the removal from MERS registration
of
any Mortgage Loan on the MERS System, to execute and deliver, on behalf of
the
Owner, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name
of
MERS, solely as nominee for the Owner and its successors and assigns. The
Servicer will comply in all material respects with the rules and procedures
of
MERS in connection with the servicing of the Mortgage Loans that are registered
with MERS.
In
servicing and administering the Mortgage Loans, the Servicer shall employ
procedures (including collection procedures) and exercise the same care that
it
customarily employs and exercises in servicing and administering similar
mortgage loans for similar investors, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Owner's reliance on the Servicer.
The
Servicer shall cause to be maintained for each Cooperative Loan a copy of
the
financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Owner.
The
Servicer shall not waive any Prepayment Penalty with respect to any Mortgage
Loan which contains a Prepayment Penalty which prepays during the term of
the
charge. If the Servicer fails to collect the Prepayment Penalty upon any
prepayment of any Mortgage Loan which contains a Prepayment Penalty, the
Servicer shall pay the Owner at such time (by deposit to the Custodial Account)
an amount equal to amount of the Prepayment Penalty which was not collected.
Notwithstanding the above, the Servicer may waive (and shall waive, in the
case
of (vi) below) a Prepayment Penalty without paying the Owner the amount of
the
Prepayment Penalty (i) if the Mortgage Loan is in default (defined as 61
days or
more delinquent) and such waiver would maximize recovery of total proceeds
taking into account the value of such Prepayment Penalty and the related
Mortgage Loan, (ii) if the prepayment is not a result of a refinancing by
the
Servicer or any of its affiliates and the Mortgage Loan is foreseen to be
in
default and such waiver would maximize recovery of total proceeds taking
into
account the value of such Prepayment Penalty and the related Mortgage Loan,
(iii) if the collection of the Prepayment Penalty would be in violation of
applicable laws, (iv) if the collection of such Prepayment Penalty would
be
considered “predatory” pursuant to written guidance published or issued by any
applicable federal, state or local regulatory authority acting in its official
capacity and having jurisdiction over such matters (v) the Mortgage Loan
is
accelerated or paid off in connection with the workout of a delinquency or
due
to the borrower’s default, notwithstanding that the terms of the Mortgage Loan
or state or federal law might permit the imposition of such penalty and (vi)
notwithstanding any state or federal law to the contrary, any instance when
a
Mortgage Loan is in foreclosure. The
Servicer will provide to the Owner, no later than the tenth (10th) Business
Day
of each month, a report as of the prior month’s end, of all Mortgage Loans
subject to a Principal Prepayment in full during such month, including a
description of the applicable Prepayment Penalty, the estimated amount to
be
collected and the amount actually collected.
Upon
request, the Servicer shall provide the Owner with documentation and explanation
supporting the Servicer’s determination to waive any Prepayment
Charge.
20
The
Servicer shall
pay
the amount of any
Prepayment
Penalty (to the extent not collected and remitted to the Owner) to the Owner
or
its assignees if the
Servicer waives any Prepayment Penalty other than as permitted under this
Section 4.01. The
Servicer
shall pay the amount of such
Prepayment Penalty, for the benefit of the Owner or any assignee of the Owner,
by depositing such amount into the Custodial Account at the time that the
amount
prepaid on the related Mortgage Loan is required to be deposited into the
Custodial Account.
Section
4.02 Liquidation
of Mortgage Loans.
In
the
event that any payment due under any Mortgage Loan and not postponed pursuant
to
Section 4.01 is not paid when the same becomes due and payable, or in the
event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period,
the
Servicer shall take such action as (1) the Servicer would take under similar
circumstances with respect to a similar mortgage loan held for its own account
for investment, (2) shall be consistent with Accepted Servicing Practices,
(3)
the Servicer shall determine prudently to be in the best interest of Owner,
and
(4) is consistent with any related PMI Policy or LPMI Policy or any other
primary mortgage guaranty insurance policies obtained and paid for by the
Owner.
In the event that any payment due under any Mortgage Loan is not postponed
pursuant to Section 4.01 and remains delinquent for a period of 90 days or
any
other default continues for a period of 90 days beyond the expiration of
any
grace or cure period, the Servicer shall commence foreclosure proceedings.
In
such connection, the Servicer shall from its own funds make all necessary
and
proper Servicing Advances, provided, however, that the Servicer shall not
be
required to expend its own funds in connection with any foreclosure or towards
the restoration or preservation of any Mortgaged Property in excess of $2,000,
unless it shall determine (a) that such preservation, restoration and/or
foreclosure will increase the proceeds of liquidation of the Mortgage Loan
to
Owner after reimbursement to itself for such expenses and (b) that such expenses
will be recoverable by it either through Liquidation Proceeds (respecting
which
it shall have priority for purposes of withdrawals from the Custodial Account
pursuant to Section 4.05) or through Insurance Proceeds (respecting which
it
shall have similar priority). The Servicer be responsible for all costs and
expenses incurred by it in any such proceedings; provided, however, that
it
shall be entitled to reimbursement thereof from the related Mortgaged Property,
as contemplated herein.
Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure
or
acceptance of a deed in lieu of foreclosure, in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Owner otherwise requests
an
environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector. The cost
for
such inspection or review shall be borne by the Owner. Upon completion of
the
inspection or review, the Servicer shall promptly provide the Owner with
a
written report of the environmental inspection.
21
After
reviewing the environmental inspection report, the Owner shall determine
how the
Servicer shall proceed with respect to the Mortgaged Property. In the event
(a)
the environmental inspection report indicates that the Mortgaged Property
is
contaminated by hazardous or toxic substances or wastes and (b) the Owner
directs the Servicer to proceed with foreclosure or acceptance of a deed
in lieu
of foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to
fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 4.05 hereof. In the
event
the Owner directs the Servicer not to proceed with foreclosure or acceptance
of
a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
Servicing Advances made with respect to the related Mortgaged Property from
the
Custodial Account pursuant to Section 4.05 hereof.
Section
4.03 Collection
of Mortgage Loan Payments.
Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are
paid in full, the Servicer shall proceed diligently to collect all payments
due
under each of the Mortgage Loans when the same shall become due and payable
and
shall take special care in ascertaining and estimating Escrow Payments and
all
other charges that will become due and payable with respect to the Mortgage
Loan
and the Mortgaged Property, to the end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become
due
and payable.
Section
4.04 Establishment
of and Deposits to Custodial Account.
The
Servicer shall segregate and hold all funds collected and received in
connection with
a
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form
of
time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A., in trust
for
the Owner and/or subsequent owners of Mortgage Loans, and various Mortgagors
- P
& I." The Custodial Account shall be established with a Qualified
Depository. Within ten (10) days of the Transfer Date the Servicer shall
provide
the Owner with written confirmation of the existence of such Custodial
Account
in the
form attached hereto as Exhibit E.
The
Custodial Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on
by the
Servicer in accordance with Section 4.05.
The
Servicer shall deposit in a clearing account on a daily basis, and in the
Custodial Account within two Business Days of receipt, and retain therein,
the
following collections received by the Servicer and any other amounts required
to
be deposited by the Servicer pursuant to this Agreement after the Cut-off
Date,
or received by the Servicer prior to the Cut-off Date but allocable to a
period
subsequent thereto, other than payments of principal and interest due on
or
before the Cut-off Date, as follows:
|
(i)
|
all
payments on account of principal on the Mortgage Loans, including
all
Principal Prepayments and all Prepayment
Charges;
|
22
|
(ii)
|
all
payments on account of interest on the Mortgage Loans adjusted
to the
Mortgage Loan Remittance Rate;
|
|
(iii)
|
all
Liquidation Proceeds;
|
|
(iv)
|
all
Insurance Proceeds including amounts required to be deposited pursuant
to
Section 4.10 (other than proceeds to be held in the Escrow Account
and
applied to the restoration or repair of the Mortgaged Property
or released
to the Mortgagor in accordance with Section 4.14), Section 4.11,
Section
4.15, the Servicer’s normal servicing procedures, the loan documents and
applicable law;
|
|
(v)
|
all
Condemnation Proceeds which are not applied to the restoration
or repair
of the Mortgaged Property or released to the Mortgagor in accordance
with
Section 4.14, the Servicer’s normal servicing procedures, the loan
documents and applicable law;
|
|
(vi)
|
any
amount required to be deposited in the Custodial Account pursuant
to
Sections 4.01, 6.01 or 6.02;
|
|
(vii)
|
any
amounts payable in connection with the repurchase of any Mortgage
Loan
pursuant to Section 5.04;
|
|
(viii)
|
any
amounts required to be deposited by the Servicer pursuant to Section
4.11
in connection with the deductible clause in any blanket hazard
insurance
policy;
|
|
(ix)
|
any
amounts received with respect to or related to any REO Property
and all
REO Disposition Proceeds pursuant to Section
4.16;
|
|
(x)
|
with
respect to each Principal Prepayment, the Prepayment Interest Shortfall
(to be paid by the Servicer out of its funds); provided, however,
that in
no event shall the aggregate of deposits made by the Servicer pursuant
to
this sub clause (x) exceed the aggregate amount of the Servicer’s
Servicing Fee for the related Due
Period;
|
|
(xi)
|
any
amount required to be deposited in the Custodial Account pursuant
to this
Agreement
|
The
foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Servicer into the Custodial Account. Such Custodial Account shall be an Eligible
Account. Any interest paid on funds deposited in the Custodial Account by
the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 4.05. The Servicer shall give notice
to
the Owner of the location of the Custodial Account when established and with
respect to any change thereof to another Qualified Depository.
23
If
the
balance on deposit in the Custodial Account exceeds $75,000 as of the
commencement of business on any Business Day and the Custodial Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of Eligible Account, the Servicer shall, on or before twelve o'clock noon
Eastern time on such Business Day, withdraw from the Custodial Account any
and
all amounts payable to the Owner and remit such amounts to the Owner by wire
transfer of immediately available funds. If the Servicer elects or is required
by law to deposit a Mortgagor’s escrow funds into an interest-bearing account,
the Servicer shall remain obligated to pay the Mortgagor’s taxes and insurance
premiums when due, even if the Mortgagor’s escrow funds are not withdrawable on
demand.
Section
4.05 Permitted
Withdrawals From Custodial Account.
The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for
the following purposes:
|
(i)
|
to
make payments to the Owner in the amounts and in the manner provided
for
in Section 5.01;
|
|
(ii)
|
to
reimburse itself for unreimbursed Servicing Advances, and for any
unpaid
Servicing Fees, the Servicer's right to reimburse itself pursuant
to this
subclause (ii) with respect to any Mortgage Loan being limited
to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
and such
other amounts as may be collected by the Servicer from the Mortgagor
or
otherwise relating to the Mortgage Loan, it being understood that,
in the
case of any such reimbursement, the Servicer's right thereto shall
be
prior to the rights of Owner;
|
|
(iii)
|
to
reimburse itself for Monthly Advances of the Servicer's funds made
pursuant to Section 5.03, the Servicer's right to reimburse itself
pursuant to this sub clause (iii) being limited to amounts received
on the
related Mortgage Loan which represent late Monthly Payments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and such other
amounts
as may be collected by the Servicer respecting the Mortgage Loan
as to
which any such advance was made, it being understood that, in the
case of
any such reimbursement, the Servicer's right thereto shall be prior
to the
rights of Owner, and all other amounts required to be paid to the
Owner
with respect to such Mortgage Loan;
|
|
(iv)
|
to
pay itself interest on funds deposited in the Custodial Account
(all such
interest to be withdrawn monthly not later than each Remittance
Date);
|
|
(v)
|
to
reimburse itself for expenses incurred and reimbursable to it pursuant
to
Section 8.01;
|
|
(vi)
|
to
pay any amount required to be paid pursuant to Section 4.16 related
to any
REO Property, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property,
the amount
of such expenditure or withdrawal from the Custodial Account shall
be
limited to amounts on deposit in the Custodial Account with respect
to the
related REO Property;
|
24
|
(vii)
|
to
reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
|
|
(viii)
|
to
remove funds inadvertently placed in the Custodial Account by the
Servicer; and
|
|
(x)
|
to
clear and terminate the Custodial Account upon the termination
of this
Agreement.
|
In
the
event that the Custodial Account is interest bearing, on each Remittance
Date,
the Servicer shall withdraw all funds from the Custodial Account except for
those amounts which, pursuant to Section 5.01, the Servicer is not obligated
to
remit on such Remittance Date. The Servicer may use such withdrawn funds
only
for the purposes described in this Section 4.05.
The
Servicer shall keep and maintain separate accounting, on a Mortgage Loan
by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to subclauses (i), (ii), (iii), (v) and (vii)
above.
The Servicer shall provide written notification in the form of an Officers’
Certificate to the Owner, on or prior to the next succeeding Remittance Date,
upon making any withdrawals from the Custodial Account pursuant to subclause
(v)
above.
Section
4.06 Establishment
of and Deposits to Escrow Account.
The
Servicer shall segregate and hold all funds collected and received pursuant
to a
Mortgage Loan constituting Escrow Payments separate and apart from any of
its
own funds and general assets and shall establish and maintain one or more
Escrow
Accounts, in the form of time deposit or demand accounts, titled, "Xxxxx
Fargo
Bank, N.A., in trust for the Owner and/or subsequent Owners of Residential
Mortgage Loans, and various Mortgagors - T & I." The Escrow Accounts shall
be established with a Qualified Depository, in a manner which shall provide
maximum available insurance thereunder. Within ten (10) days of the Transfer
Date , the Servicer shall provide the Owner with written confirmation of
the
existence of such Escrow Account
in the
form attached hereto as Exhibit F.
Funds
deposited in the Escrow Account may be drawn on by the Servicer in accordance
with Section 4.07.
The
Servicer shall deposit in a clearing account on a daily basis and in the
Escrow
Account or Accounts within two Business Days of the Servicer’s receipt, and
retain therein:
|
(i)
|
all
Escrow Payments collected on account of the Mortgage Loans, for
the
purpose of effecting timely payment of any such items as required
under
the terms of this Agreement;
|
|
(ii)
|
all
amounts representing Insurance Proceeds or Condemnation Proceeds
which are
to be applied to the restoration or repair of any Mortgaged Property;
and
|
25
|
(iii)
|
all
payments on account of Buydown
Funds.
|
The
Servicer shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.07.
The
Servicer shall be entitled to retain any interest paid on funds deposited
in the
Escrow Account by the depository institution, other than interest on escrowed
funds required by law to be paid to the Mortgagor. To the extent required
by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section
4.07 Permitted
Withdrawals From Escrow Account.
Withdrawals
from the Escrow Account or Accounts may be made by the Servicer
only:
|
(i)
|
to
effect timely payments of ground rents, taxes, assessments, water
rates,
mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums, or other items constituting Escrow Payments
for the
related Mortgage;
|
|
(ii)
|
to
reimburse the Servicer for any Servicing Advances made by the Servicer
pursuant to Section 4.08 with respect to a related Mortgage Loan,
but only
from amounts received on the related Mortgage Loan which represent
late
payments or collections of Escrow Payments
thereunder;
|
|
(iii)
|
to
refund to any Mortgagor any funds found to be in excess of the
amounts
required under the terms of the related Mortgage
Loan;
|
|
(iv)
|
for
transfer to the Custodial Account for application to reduce the
principal
balance of the Mortgage Loan in accordance with the terms of the
related
Mortgage, Mortgage Note and this
Agreement;
|
|
(v)
|
for
application to the restoration or repair of the Mortgaged Property
in
accordance with the procedures outlined in Section
4.14;
|
|
(vi)
|
to
pay to the Servicer, or any Mortgagor to the extent required by
law, any
interest paid on the funds deposited in the Escrow
Account;
|
|
(vii)
|
to
remove funds inadvertently placed in the Escrow Account by the
Servicer;
|
|
(viii)
|
to
remit to Owner payments on account of Buydown Funds as applicable;
and
|
|
(ix)
|
to
clear and terminate the Escrow Account on the termination of this
Agreement.
|
Section
4.08 Payment
of Taxes, Insurance and Other Charges.
26
With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy or LPMI Policy premiums and fire and
hazard insurance coverage and shall obtain, from time to time, all bills
for the
payment of such charges (including insurance renewal premiums) and shall
effect
payment thereof prior to the applicable penalty or termination date and at
a
time appropriate for securing maximum discounts allowable, employing for
such
purpose deposits of the Mortgagor in the Escrow Account which shall have
been
estimated and accumulated by the Servicer in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage and applicable law.
To the
extent that the Mortgage does not provide for Escrow Payments, the Servicer
shall determine that any such payments are made by the Mortgagor at the time
they first become due. The Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payment of all such charges
irrespective of each Mortgagor's faithful performance in the payment of same
or
the making of the Escrow Payments, and the Servicer shall make advances from
its
own funds to effect such payments.
Section
4.09 Protection
of Accounts.
The
Servicer may transfer the Custodial Account or the Escrow Account to a different
Qualified Depository from time to time, so long as such accounts remain Eligible
Accounts. The Servicer shall promptly notify the Owner of such transfer.
Section
4.10 Maintenance
of Hazard Insurance.
The
Servicer shall cause to be maintained for each Mortgage Loan fire and hazard
insurance with extended coverage such that all buildings upon the Mortgaged
Property are insured by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac
against loss by fire, hazards of extended coverage and such other hazards
as are
customary in the area where the Mortgaged Property is located, in an amount
which is at least equal to the lesser of: (i) 100% of the insurable value
on a
replacement cost basis of the improvements on the related Mortgaged Property
and
(ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan
and (b) an amount such that the proceeds of such insurance shall be sufficient
to prevent the application to the Mortgagor or the loss payee of any coinsurance
clause under the policy. In the event a hazard insurance policy shall be
in
danger of being terminated, or in the event the insurer shall cease to be
acceptable to Xxxxxx Mae or Xxxxxxx Mac, the Servicer shall notify the Owner
and
the related Mortgagor, and shall use its best efforts, as permitted by
applicable law, to obtain from another qualified insurer a replacement hazard
insurance policy substantially and materially similar in all respects to
the
original policy. In no event, however, shall a Mortgage Loan be without a
hazard
insurance policy at any time, subject only to Section 4.11 hereof.
If
the
related Mortgaged Property is located in an area identified by the Flood
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) the Servicer shall cause to be maintained
a
flood insurance policy meeting the requirements of the current guidelines
of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to Xxxxxx Mae or Xxxxxxx Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii)
the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law
and
pursuant to the Xxxxxx Mae Guides that a Mortgaged Property is located in
a
special flood hazard area and is not covered by flood insurance or is covered
in
an amount less than the amount required by the Flood Disaster Protection
Act of
1973, as amended, the Servicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails
to obtain the required flood insurance coverage within forty-five (45) days
after such notification, the Servicer shall immediately force place the required
flood insurance on the Mortgagor’s behalf.
27
If
a
Mortgage is secured by a unit in a condominium project, the Servicer shall
use
reasonable efforts to verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is
being
maintained.
In
the
event that the Owner or the Servicer shall determine that the Mortgaged Property
should be insured against loss or damage by hazards and risks not covered
by the
insurance required to be maintained by the Mortgagor pursuant to the terms
of
the Mortgage, the Servicer shall communicate and consult with the Mortgagor
with
respect to the need for such insurance and bring to the Mortgagor's attention
the required amount of coverage for the Mortgaged Property and if the Mortgagor
does not obtain such coverage, the Servicer shall immediately force place
the
required coverage on the Mortgagor’s behalf.
All
policies required hereunder shall name the Servicer as loss payee and shall
be
endorsed with standard mortgagee clauses, without contribution, which shall
provide for at least 30 days prior written notice of any cancellation, reduction
in amount or material change in coverage.
The
Servicer shall not interfere with the Mortgagor's freedom of choice in selecting
either his insurance carrier or agent.. The Servicer shall determine that
such
policies provide sufficient risk coverage and amounts, that they insure the
property owner, and that they properly describe the property
address.
The
Servicer also shall maintain on any REO Property, fire and hazard insurance
with
extended coverage in an amount which is at least equal to the lesser of (i)
the
maximum insurable value of the improvements which are a part of such property
and (ii) the outstanding principal balance of the related Mortgage Loan at
the
time it became an REO Property plus accrued interest at the Mortgage Interest
Rate and related Servicing Advances, liability insurance and, to the extent
required and available under the National Flood Insurance Act of 1968 or
the
Flood Disaster Protection Act of 1973, as amended, flood insurance in an
amount
as provided above.
28
Pursuant
to Section 4.04, any amounts collected by the Servicer under any such policies
(other than amounts to be deposited in the Escrow Account and applied to
the
restoration or repair of the related Mortgaged Property, or property acquired
in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Servicer's normal servicing procedures as specified in
Section 4.14) shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05.
Any
cost
incurred by the Servicer in maintaining any such insurance shall not, for
the
purpose of calculating distributions to the Owner, be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the
terms
of such Mortgage Loan so permit. It is understood and agreed that no earthquake
or other additional insurance need be required by the Servicer of the Mortgagor
or maintained on property acquired in respect of the Mortgage Loan, other
than
pursuant to such applicable laws and regulations as shall at any time be
in
force and as shall require such additional insurance.
Section
4.11 Maintenance
of Mortgage Impairment Insurance.
In
the
event that the Servicer shall obtain and maintain mortgage impairment or
a
blanket policy insuring against losses arising from fire, flood and hazards
covered under extended coverage on all of the the Mortgage Properties securing
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 4.10, is acceptable to Xxxxxx
Xxx and Xxxxxxx Mac and otherwise complies with all other requirements of
Section 4.10, it shall conclusively be deemed to have satisfied its obligations
as set forth in Section 4.10. The Servicer shall prepare and make any claims
on
the blanket policy as deemed necessary by the Servicer in accordance with
Accepted Servicing Practices. Any amounts collected by the Servicer under
any
such policy relating to a Mortgage Loan shall be deposited in the Custodial
Account subject to withdrawal pursuant to Section 4.05. Such policy may contain
a deductible clause, in which case, in the event that there shall not have
been
maintained on the related Mortgaged Property or REO Property a policy complying
with Section 4.10, and there shall have been one or more losses which would
have
been covered by such policy, the Servicer shall deposit in the Custodial
Account
at the time of such loss the amount not otherwise payable under the blanket
policy because of such deductible clause, such amount to be deposited from
the
Servicer's funds, without reimbursement therefore. The Servicer agrees to
prepare and present claims under any such blanket policy in a timely fashion
in
accordance with the terms of such policy. Upon request of the Owner, the
Servicer shall cause to be delivered to such Owner a certificate of insurance
and a statement from the insurer thereunder that such policy shall in no
event
be terminated or materially modified without 30 days' prior written notice
to
such Owner.
Section
4.12 Maintenance
of Fidelity Bond and Errors and Omissions Insurance.
The
Servicer shall maintain a blanket Fidelity Bond and an Errors and Omissions
Insurance Policy acceptable to Xxxxxx Mae or Xxxxxxx Mac, with broad coverage
on
all officers, employees or other Persons acting in any capacity requiring
such
Persons to handle funds, money, documents or papers relating to the Mortgage
Loans ("Servicer Employees"). Any such Fidelity Bond and Errors and Omissions
Insurance Policy shall be in the form of the Mortgage Banker's Blanket Bond
and
shall protect and insure the Servicer against losses, including forgery,
theft,
embezzlement, fraud, errors and omissions and negligent acts of such Servicer
Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy also
shall protect and insure the Servicer against losses in connection with the
failure to maintain any insurance policies required pursuant to this Agreement
and the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 4.12 requiring such Fidelity Bond and Errors and Omissions Insurance
Policy shall diminish or relieve the Servicer from its duties and obligations
as
set forth in this Agreement. The minimum coverage under any such Fidelity
Bond
and Errors and Omissions Insurance Policy shall be acceptable to Xxxxxx Mae
or
Xxxxxxx Mac. Upon the request of the Owner, the Servicer shall cause to be
delivered to the Owner a certificate of insurance for such Fidelity Bond
and
Errors and Omissions Insurance Policy and a statement from the surety and
the
insurer that such Fidelity Bond and Errors and Omissions Insurance Policy
shall
in no event be terminated or materially modified without thirty days' prior
written notice to the Owner.
29
Section
4.13 Inspections.
If
any
Mortgage Loan is more than 60 days delinquent, the Servicer immediately shall
inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Accepted Servicing Practices or as may be required by the
primary mortgage guaranty insurer. The Servicer shall keep a record of each
such
inspection and, upon request, shall provide the Owner with such
information.
Section
4.14 Restoration
of Mortgaged Property.
The
Servicer need not obtain the approval of the Owner prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, the Servicer
shall
comply with the following conditions in connection with any such release
of
Insurance Proceeds or Condemnation Proceeds:
|
(i)
|
the
Servicer shall receive satisfactory independent verification
of completion
of repairs and issuance of any required approvals with respect
thereto;
|
|
(ii)
|
the
Servicer shall take all steps necessary to preserve the priority
of the
lien of the Mortgage, including, but not limited to requiring
waivers with
respect to mechanics' and materialmen's
liens;
|
|
(iii)
|
the
Servicer shall verify that the Mortgage Loan is not in default;
and
|
|
(iv)
|
pending
repairs or restoration, the Servicer shall place the Insurance
Proceeds or
Condemnation Proceeds in the Escrow
Account.
|
If
the
Owner is named as an additional loss payee, the Servicer is hereby empowered
to
endorse any loss draft issued in respect of such a claim in the name of the
Owner.
Section
4.15 Maintenance
of PMI Policy or LPMI Policy; Claims.
30
With
respect to each Mortgage Loan with an LTV in excess of 80% at the time of
origination, the Servicer shall, without any cost to the Owner maintain or
cause
the Mortgagor to maintain in full force and effect a PMI Policy or LPMI Policy
issued by a Qualified Insurer insuring a portion of the unpaid principal
balance
of the Mortgage Loan as to payment defaults. If the Mortgage Loan is insured
by
a PMI Policy for which the Mortgagor pays all premiums, the coverage will
remain
in place until (i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise
terminated pursuant to the Homeowners Protection Act of 1998, 12 USC §4901, et
seq. The Servicer will not cancel or refuse to renew any PMI Policy or LPMI
Policy in effect on the Transfer Date that is required to be kept in force
under
this Agreement unless a replacement PMI Policy or LPMI Policy for such cancelled
or non-renewed policy is obtained from and maintained with a Qualified Insurer.
In the event that such PMI Policy or LPMI Policy shall be terminated other
than
as required by law, the Servicer shall obtain from another Qualified Insurer
a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy or LPMI Policy. If the insurer shall
cease to be a Qualified Insurer, the Servicer shall determine whether recoveries
under the PMI Policy or LPMI Policy are jeopardized for reasons related to
the
financial condition of such insurer, it being understood that the Servicer
shall
in no event have any responsibility or liability for any failure to recover
under the PMI Policy or LPMI Policy for such reason. If the Servicer determines
that recoveries are so jeopardized, it shall notify the Owner and the Mortgagor,
if required, and obtain from another Qualified Insurer a replacement insurance
policy. The Servicer shall not take any action which would result in noncoverage
under any applicable PMI Policy or LPMI Policy, of any loss which, but for
the
actions of the Servicer would have been covered thereunder. In connection
with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer
under
the related PMI Policy or LPMI Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such PMI Policy
or
LPMI Policy and shall take all actions which may be required by the insurer
as a
condition to the continuation of coverage under the PMI Policy or LPMI Policy.
If such PMI Policy or LPMI Policy is terminated as a result of such assumption
or substitution of liability, the Servicer shall obtain a replacement PMI
Policy
or LPMI Policy as provided above.
In
connection with its activities as servicer, the Servicer agrees to prepare
and
present, on behalf of itself and the Owner, claims to the insurer under any
PMI
Policy or LPMI Policy or any other primary mortgage guaranty insurance policies
obtained and paid for by the Owner, in a timely fashion in accordance with
the
terms of such PMI Policy or LPMI Policy and, in this regard, to take such
action
as shall be necessary to permit recovery under any PMI Policy or LPMI Policy
or
any other primary mortgage guaranty insurance policies obtained and paid
for by
the Owner respecting a defaulted Mortgage Loan. Pursuant to Section 4.04,
any
amounts collected by the Servicer under any PMI Policy or LPMI Policy shall
be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Section
4.16 Title,
Management and Disposition of REO Property.
In
the
event that title to any Mortgaged Property is acquired in foreclosure or
by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in
the
name of the Owner or the Owner's designee, or in the event such person is
not
authorized or permitted to hold title to real property in the state where
the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from an attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Owner shall acknowledge
in writing that such title is being held as nominee for the benefit of the
Owner.
31
The
Servicer shall manage, conserve, protect and operate each REO Property for
the
Owner solely for the purpose of its prompt disposition and sale. The Servicer,
either itself or through an agent selected by the Servicer, shall manage,
conserve, protect and operate the REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its
own
account, in the same manner that similar property in the same locality as
the
REO Property is managed and in a manner which does not cause such REO Property
to fail to qualify as “foreclosure property” within the meaning of Section
860G(a)(8) of the Code or result in the receipt by such REMIC of any “income
from non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the
Code or any “net income from foreclosure property” within the meaning of Section
860G(c)(2) of the Code. The Servicer shall cause each REO Property to be
inspected promptly upon the acquisition of title thereto and shall cause
each
REO Property to be inspected at least annually thereafter. The Servicer shall
make or cause to be made an electronic report of each such inspection. Such
reports shall be retained in the Mortgage File and copies thereof shall be
forwarded by the Servicer to the Owner upon receipt. The Servicer shall attempt
to sell the same (and may temporarily rent the same for a period not greater
than one year, except as otherwise provided below) on such terms and conditions
as the Servicer deems to be in the best interest of the Owner.
The
Servicer shall use its best efforts to dispose of the REO Property as soon
as
possible and shall sell such REO Property in any event within one year after
title has been taken to such REO Property, unless the Servicer determines,
and
gives appropriate notice to the Owner, that a longer period is necessary
for the
orderly liquidation of such REO Property. If a period longer than one year
is
necessary to sell any REO property the Servicer shall report monthly to the
Owner as to the progress being made in selling such REO Property.
Notwithstanding the foregoing, if a REMIC election is made with respect to
the
arrangement under which the Mortgage Loans and the REO Property are held,
such
REO Property shall be disposed of before the close of the third taxable year
following the taxable year in which the Mortgage Loan became an REO Property,
unless the Servicer provides to the trustee under such REMIC an opinion of
counsel to the effect that the holding of such REO Property subsequent to
the
close of the third taxable year following the taxable year in which the Mortgage
Loan became an REO Property, will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code, or cause
the
transaction to fail to qualify as a REMIC at any time that certificates are
outstanding.
The
disposition of REO Property shall be carried out by the Servicer at such
price,
and upon such terms and conditions, as the Servicer deems to be in the best
interests of the Owner. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account. As soon as practical thereafter
the
expenses of such sale shall be paid and the Servicer shall collect the related
REO Disposition Fee, reimburse itself for any related unreimbursed Servicing
Advances and unpaid Servicing Fees. On the Remittance Date immediately following
the receipt of such sale proceeds, the net cash proceeds of such sale remaining
in the Custodial Account shall be distributed to the Owner.
32
With
respect to each REO Property, the Servicer shall segregate and hold all funds
collected and received in connection with the operation of the REO Property
separate and apart from its own funds or general assets and shall establish
and
maintain a separate REO Account for each REO Property. The Servicer shall
be
permitted to allow the Custodial Account to serve as the REO Account, subject
to
separate ledgers for each REO Property. The Servicer shall be entitled to
retain
or withdraw any interest income paid on funds deposited in the REO
Account.
Each
REO
Account shall be established with the Servicer or, with the prior consent
of the
Owner, with a commercial bank, a mutual savings bank or a savings association.
The creation of any REO Account shall be evidenced by a letter agreement
substantially in the form of the Custodial Account Letter Agreement attached
as
Exhibit E hereto. An original of such letter agreement shall be furnished
to any
Owner upon request.
The
Servicer shall deposit or cause to be deposited, in a clearing account on
a
daily basis and in each REO Account within two Business Days of receipt,
all
revenues received with respect to the related REO Property and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of the REO Property, including the cost of maintaining any fire and hazard
insurance pursuant to this Agreement hereof and the fees of any managing
agent
acting on behalf of the Servicer.
Section
4.17 Real
Estate Owned Reports.
Together
with the statement furnished pursuant to Section 5.02, the Servicer shall
furnish to the Owner on or before the Remittance Date each month a statement
with respect to any REO Property covering the operation of such REO Property
for
the previous month and the Servicer's efforts in connection with the sale
of
such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous month. That statement shall be accompanied by such
other information available to the Servicer as the Owner shall reasonably
request.
Section
4.18 Liquidation
Reports.
Upon
the
foreclosure sale of any Mortgaged Property or the acquisition thereof by
the
Owner pursuant to a deed in lieu of foreclosure, the Servicer shall submit
to
the Owner a liquidation report with respect to such Mortgaged
Property.
33
Section
4.19 Reports
of Foreclosures and Abandonments of Mortgaged Property.
Following
the foreclosure sale or abandonment of any Mortgaged Property, the Servicer
shall report such foreclosure or abandonment as required pursuant to the
Code.
The Servicer shall file information reports with respect to the receipt of
mortgage interest received in a trade or business reports of foreclosures
and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property
as
required by the Code. Such reports shall be in form and substance sufficient
to
meet the reporting requirements imposed by the Code.
Section
4.20 Application
of Buydown Funds.
With
respect to each Buydown Mortgage Loan, the Servicer shall have deposited
into
the Escrow Account, no later than the last day of the month, Buydown Funds
in an
amount equal to the aggregate undiscounted amount of payments that, when
added
to the amount the Mortgagor on such Mortgage Loan is obligated to pay on
all Due
Dates in accordance with the terms of the Buydown Agreement, is equal to
the
full scheduled Monthly Payments which are required to be paid by the Mortgagor
under the terms of the related Mortgage Note (without regard to the related
Buydown Agreement as if the Mortgage Loan were not subject to the terms of
the
Buydown Agreement). With respect to each Buydown Mortgage Loan, the Servicer
will distribute to the Owner on each Remittance Date an amount of Buydown
Funds
equal to the amount that, when added to the amount required to be paid on
such
date by the related Mortgagor, pursuant to and in accordance with the related
Buydown Agreement, equals the full Monthly Payment that would otherwise be
required to be paid on such Mortgage Loan by the related Mortgagor under
the
terms of the related Mortgage Note (as if the Mortgage Loan were not a Buydown
Mortgage Loan and without regard to the related Buydown Agreement).
If
the
Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan during
the
Buydown Period and the Mortgaged Property securing such Buydown Mortgage
Loan is
sold in the liquidation thereof (either by the Servicer or the insurer under
any
related Primary Insurance Policy) the Servicer shall, on the Remittance Date
following the date upon which Liquidation Proceeds or REO Disposition proceeds
are received with respect to any such Buydown Mortgage Loan, distribute to
the
Owner all remaining Buydown Funds for such Mortgage Loan then remaining in
the
Escrow Account. Pursuant to the terms of each Buydown Agreement, any amounts
distributed to the Owner in accordance with the preceding sentence will be
applied to reduce the outstanding principal balance of the related Buydown
Mortgage Loan. If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage
Loan in its entirety during the related Buydown Period, the Servicer shall
be
required to withdraw from the Escrow Account any Buydown Funds remaining
in the
Escrow Account with respect to such Buydown Mortgage Loan in accordance with
the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a
Buydown
Mortgage Loan during the related Buydown Period, together with any Buydown
Funds
then remaining in the Escrow Account related to such Buydown Mortgage Loan,
would result in a principal prepayment of the entire unpaid principal balance
of
the Buydown Mortgage Loan, the Servicer shall distribute to the Owner on
the
Remittance Date occurring in the month immediately succeeding the month in
which
such Principal Prepayment is received, all Buydown Funds related to such
Mortgage Loan so remaining in the Escrow Account, together with any amounts
required to be deposited into the Custodial Account.
34
Section
4.21 Notification
of Adjustments.
With
respect to each adjustable rate Mortgage Loan, the Servicer shall adjust
the
Mortgage Interest Rate on the related Adjustment Date in compliance with
the
requirements of applicable law and the related Mortgage and Mortgage Note.
The
Servicer shall execute and deliver any and all necessary notices required
under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. Upon the discovery by the Servicer
or
the receipt of notice from the Owner that the Servicer has failed to adjust
a
Mortgage Interest Rate in accordance with the terms of the related Mortgage
Note, the Servicer shall immediately deposit in the Custodial Account from
its
own funds the amount of any interest loss or deferral caused the Owner thereby
without any reimbursement therefor.
Section
4.22 Confidentiality/Protection
of Customer Information.
Each
party agrees that it shall comply with all applicable laws and regulations
regarding the privacy or security of Customer Information and shall maintain
appropriate administrative, technical and physical safeguards to protect
the
security, confidentiality and integrity of Customer Information, including
maintaining security measures designed to meet the objectives of the Interagency
Guidelines Establishing Standards for Safeguarding Customer Information,
66 Fed.
Reg. 8616 (the “Interagency Guidelines”). For purposes of this Section, the term
“Customer Information” shall have the meaning assigned to it in the Interagency
Guidelines.
Section
4.23 Fair
Credit Reporting Act
The
Servicer, in its capacity as servicer for each Mortgage Loan, agrees to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and
Trans Union Credit Information Company (three of the credit repositories),
on a
monthly basis.
Section
4.24 Use
of
Subservicers and Subcontractors.
The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to
fulfill any of the obligations of the Servicer under this Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions
of
paragraph (a) of this Section 4.24. The Servicer shall not hire or otherwise
utilize the services of any Subcontractor, and shall not permit any Subservicer
to hire or otherwise utilize the services of any Subcontractor, to fulfill
any
of the obligations of the Servicer under this Agreement or any Reconstitution
Agreement unless the Servicer complies with the provisions of paragraph (b)
of
this Section 4.24.
35
(a) It
shall
not be necessary for the Servicer to seek the consent of the Owner, any Master
Servicer or any Depositor to the utilization of any Subservicer. The Servicer
shall cause any Subservicer used by the Servicer (or by any Subservicer)
for the
benefit of the Owner and any Depositor to comply with the provisions of this
Section 4.24 and with Sections 6.04, 6.06 and 9.01 of this Agreement to the
same
extent as if such Subservicer were the Servicer, and to provide the information
required with respect to such Subservicer under Section 9.01(e)(iv) of this
Agreement. The Servicer shall be responsible for obtaining from each Subservicer
and delivering to the Owner and any Depositor any servicer compliance statement
required to be delivered by such Subservicer under Section 6.04 and any
assessment of compliance and attestation required to be delivered by such
Subservicer under Section 6.06 and any certification required to be delivered
to
the Person that will be responsible for signing the Sarbanes Certification
under
Section 6.06 as and when required to be delivered.
(b) It
shall
not be necessary for the Servicer to seek the consent of the Owner, any Master
Servicer or any Depositor to the utilization of any Subcontractor. The Servicer
shall promptly upon request provide to the Owner, any Master Servicer and
any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory
to the
Owner, such Master Servicer and such Depositor) of the role and function
of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i)
the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are “participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
Any
Subservicing arrangement and the terms of the related Subservicing Agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Each Subservicer
shall
be (i) authorized to transact business in the state or states where the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement and (ii) a Xxxxxxx Mac or
Xxxxxx
Mae approved mortgage servicer. Notwithstanding the provisions of any
Subservicing Agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the Servicer or a Subservicer or reference
to
actions taken through the Servicer or otherwise, the Servicer shall remain
obligated and liable to the Owner and its successors and assigns for the
servicing and administration of the Mortgage Loans in accordance with the
provisions of this Agreement without diminution of such obligation or liability
by virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the
same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. Every Subservicing Agreement entered into by the Servicer
shall contain a provision giving the successor servicer the option to terminate
such agreement in the event a successor servicer is appointed. All actions
of
each Subservicer performed pursuant to the related Subservicing Agreement
shall
be performed as an agent of the Servicer with the same force and effect as
if
performed directly by the Servicer.
36
For
purposes of this Agreement, the Servicer shall be deemed to have received
any
collections, recoveries or payments with respect to the Mortgage Loans that
are
received by a Subservicer regardless of whether such payments are remitted
by
the Subservicer to the Servicer. For purposes of this Agreement, the Assignment
Agreements shall not be deemed to be Subservicing Agreements.
As
a
condition to the utilization of any Subcontractor determined to be
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner, any Master
Servicer and any Depositor to comply with the provisions of Sections 6.04,
6.06
and 9.01 of this Agreement to the same extent as if such Subcontractor were
the
Servicer. The Servicer shall be responsible for obtaining from each
Subcontractor and delivering to the Owner, any Master Servicer and any Depositor
any assessment of compliance and attestation required to be delivered by
such
Subcontractor under Sections 6.04 and 6.06, in each case as and when required
to
be delivered.
Section
4.25 Successor
Subservicers.
Any
Subservicing Agreement shall provide that the Servicer shall be entitled
to
terminate any Subservicing Agreement and to either itself directly service
the
related Mortgage Loans or enter into a Subservicing Agreement with a successor
Subservicer which qualifies under Section 4.27. Any Subservicing Agreement
shall
include the provision that such agreement may be immediately terminated by
any
successor to the Servicer without fee, in accordance with the terms of this
Agreement, in the event that the Servicer (or any successor to the Servicer)
shall, for any reason, no longer be the servicer of the related Mortgage
Loans
(including termination due to an Event of Default).
Section
4.26. No
Contractual Relationship Between Subservicer and the Owner.
Any
Subservicing Agreement and any other transactions or services relating to
the
Mortgage Loans involving a Subservicer shall be deemed to be between the
Subservicer and the Servicer alone and the Owner shall not be deemed a party
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to any Subservicer.
Section
4.27. Assumption
or Termination of Subservicing Agreement by Successor Servicer.
In
connection with the assumption of the responsibilities, duties and liabilities
and of the authority, power and rights of the Servicer hereunder by a successor
servicer pursuant to this Agreement, it is understood and agreed that the
Servicer’s rights and obligations under any Subservicing Agreement then in force
between the Servicer and a Subservicer shall be assumed simultaneously by
such
successor servicer without act or deed on the part of such successor servicer;
provided, however, that any successor servicer may terminate the
Subservicer.
The
Servicer shall, upon the reasonable request of the Owner, but at its own
expense, deliver to the assuming party documents and records relating to
each
Subservicing Agreement and an accounting of amounts collected and held by
it and
otherwise use its best efforts to effect the orderly and efficient transfer
of
the Subservicing Agreements to the assuming party.
37
The
Servicing Fee payable to any such successor servicer shall be payable from
payments received on the Mortgage Loans in the amount and in the manner set
forth in this Agreement.
ARTICLE
V
PAYMENTS
TO OWNER
Section
5.01 Remittances.
On
each
Remittance Date the Servicer shall remit by wire transfer of immediately
available funds to the Owner (a) all amounts deposited in the Custodial Account
as of the close of business on the Determination Date (net of charges against
or
withdrawals from the Custodial Account pursuant to Section 4.05), plus (b)
all
amounts, if any, which the Servicer is obligated to distribute pursuant to
Section 5.03, minus (c) any amounts attributable to Principal Prepayments
received after the applicable Principal Prepayment Period which amounts shall
be
remitted on the following Remittance Date, together with any additional interest
required to be deposited in the Custodial Account in connection with such
Principal Prepayment in accordance with Section 4.04(viii); minus (d) any
amounts attributable to Monthly Payments collected but due on a Due Date
or
Dates subsequent to the first day of the month of the Remittance Date, and
minus
(e) any amounts attributable to Buydown Funds being held in the Custodial
Account, which amounts shall be remitted on the Remittance Date next succeeding
the Due Period for such amounts.
With
respect to any remittance received by the Owner after the first Business
Day
following the Business Day on which such payment was due, the Servicer shall
pay
to the Owner interest on any such late payment at an annual rate equal to
the
Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by applicable
law. Such interest shall be deposited in the Custodial Account by the Servicer
on the date such late payment is made and shall cover the period commencing
with
the day following such first Business Day and ending with the Business Day
on
which such payment is made, both inclusive. Such interest shall be remitted
along with such late payment. The payment by the Servicer of any such interest
shall not be deemed an extension of time for payment or a waiver by the Owner
of
any Event of Default by the Servicer.
Section
5.02 Statements
to Owner.
Not
later
than the Remittance Date, the Servicer shall furnish to the Owner, a monthly
remittance advice, with a trial balance report attached thereto, as to the
remittance period ending on the last day of the preceding month in an electronic
format mutually agreed upon between the Owner and the Servicer. In addition,
the
Servicer shall provide the Owner with such information as the Owner may
reasonably request from time to time concerning the Mortgage Loans as is
necessary for the Owner to prepare its federal income tax return and any
and all
other tax returns, information statements or other filings required to be
delivered to any governmental authority or to the Owner pursuant to any
applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby.
Section
5.03 Monthly
Advances by the Servicer.
38
Not
later
than the close of business on the Business Day immediately preceding each
Remittance Date, the Servicer shall deposit in the Custodial Account from
its
own funds or from amounts held for future distribution an amount equal to
all
payments not previously advanced by the Servicer, whether or not deferred
pursuant to Section 4.01, of principal (due after the Cut-off Date) and interest
not allocable to the period prior to the Cut-off Date, at the Mortgage Loan
Remittance Rate which were due on the Mortgage Loans during the applicable
Due
Period and which were delinquent at the close of business on the immediately
preceding Determination Date or which were deferred pursuant to Section 4.01.
Any amounts held for future distribution and so used shall be replaced by
the
Servicer by deposit in the Custodial Account on or before any future Remittance
Date if funds in the Custodial Account on such Remittance Date shall be less
than payments to the Owner required to be made on such Remittance Date. The
Servicer's obligation to make such Monthly Advances is mandatory,
notwithstanding any other provision of this Agreement, and, with respect
to any
Mortgage Loan or REO Property, will continue until a Final Recovery
Determination in connection therewith, or through the last Remittance Date
prior
to the Remittance Date for the distribution of all Liquidation Proceeds and
other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Servicer determines, in
its
sole reasonable opinion, that advances with respect to such Mortgage Loan
are
Nonrecoverable Monthly Advances. In the event that the Servicer determines
that
any such advances is a Nonrecoverable Monthly Advance, the Servicer shall
provide the Owner with an Officer’s Certificate signed by an authorized officer
of the Servicer evidencing such determination. The Servicer shall not have
an
obligation to make such Monthly Advances as to any Mortgage Loan with respect
to
shortfalls relating to the Servicemembers Civil Relief Act or similar state
and
local laws.
Section
5.04 Repurchase.
The
Servicer shall cooperate with the Owner in facilitating the repurchase of
any
Mortgage Loan by the Seller. Upon receipt by the Servicer of notice from
the
Owner of a breach by the Seller of a representation or warranty contained
in any
agreement between the Owner and the Seller, or a request
by the Owner for the Seller to repurchase any Mortgage Loan, the Servicer
shall,
at the direction of the Owner, use its best efforts to cure and correct any
such
breach related to such deficiencies of the related Mortgage Loans.
At
the
time of repurchase, the Owner or the Custodian, as applicable, and the Servicer
shall arrange for the reassignment of the repurchased Mortgage Loan to the
Seller according to the Owner’s instructions and the delivery of any documents
held by the Servicer with respect to the repurchased Mortgage Loan.
The
Servicer will facilitate the remittance of repurchase funds between the Seller
and the Owner, but shall not be required to advance any funds for such
repurchase and shall be reimbursed for any expenses incurred due to such
repurchase.
39
ARTICLE
VI
GENERAL
SERVICING PROCEDURES
Section
6.01 Transfers
of Mortgaged Property.
The
Servicer shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the
Person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Servicer shall, to the extent
it has knowledge of such conveyance, exercise its rights to accelerate the
maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Servicer shall not exercise such rights
if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy or LPMI Policy,
if any.
If
the
Servicer reasonably believes it is unable under applicable law to enforce
such
"due-on-sale" clause, the Servicer shall enter into (i) an assumption and
modification agreement with the Person to whom such property has been conveyed,
pursuant to which such Person becomes liable under the Mortgage Note and
the
original Mortgagor remains liable thereon or (ii) in the event the Servicer
is
unable under applicable law to require that the original Mortgagor remain
liable
under the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is
released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note. In
connection with any such assumption or substitution of liability, the Servicer
shall follow the underwriting practices and procedures of prudent mortgage
lenders in the state in which the related Mortgaged Property is located.
With
respect to an assumption or substitution of liability, Mortgage Interest
Rate,
the amount of the Monthly Payment, and the final maturity date of such Mortgage
Note may not be changed without the Owner’s consent. The Servicer shall notify
the Owner that any such substitution of liability or assumption agreement
has
been completed by forwarding to the Owner the original of any such substitution
of liability or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of
such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
To
the
extent that any Mortgage Loan is assumable, the Servicer shall inquire
diligently into the credit worthiness of the proposed transferee, and shall
use
the underwriting criteria for approving the credit of the proposed transferee
which are used with respect to underwriting mortgage loans of the same type
as
the Mortgage Loan. If the credit worthiness of the proposed transferee does
not
meet such underwriting criteria, the Servicer diligently shall, to the extent
permitted by the Mortgage or the Mortgage Note and by applicable law, accelerate
the maturity of the Mortgage Loan.
40
Notwithstanding
the foregoing paragraphs of this Section 6.01 or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption
of a
Mortgage Loan by operation of law or any assumption which the Servicer may
be
restricted by law from preventing, for any reason whatsoever. For purposes
of
this Section 6.01, the term “assumption” is deemed to also include a sale of the
Mortgaged Property subject to the Mortgage that is not accompanied by an
assumption or substitution of liability agreement.
Section
6.02 Satisfaction
of Mortgages and Release of Mortgage Files.
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary
for
such purposes, the Servicer will promptly notify the Owner by a certification
of
a servicing officer of the Servicer (a “Servicing Officer”), which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited
in
the Custodial Account have been or will be so deposited, and shall request
execution of any document necessary to satisfy the Mortgage Loan and delivery
to
it of the portion of the Mortgage File held by the Owner or the Owner's
designee. Upon receipt of such certification and request, the Owner, shall
promptly release the related mortgage documents to the Servicer and the Servicer
shall prepare and process any satisfaction or release. No expense incurred
in
connection with any instrument of satisfaction or deed of reconveyance shall
be
chargeable to the Custodial Account or the Owner. If such Mortgage Loan is
a
MERS Mortgage Loan, the Servicer is authorized to cause the removal from
the
registration on the MERS System of such Mortgage and to execute and deliver,
on
behalf of the Owner, any and all instruments of satisfaction or cancellation
or
of partial or full release.
If
the
Servicer satisfies or releases a Mortgage without first having obtained payment
in full of the indebtedness secured by the Mortgage (other than pursuant
to a
modification or liquidation in accordance with this Agreement) or should
the
Servicer otherwise prejudice any rights the Owner may have under the mortgage
instruments, upon written demand of the Owner, the Servicer shall deposit
in the
Custodial Account the entire outstanding principal balance, plus all accrued
interest on such Mortgage Loan, on the day preceding the Remittance Date
in the
month following the date of such release. The Servicer shall maintain the
Fidelity Bond and Errors and Omissions Insurance Policy as provided for in
Section 4.12 insuring the Servicer against any loss it may sustain with respect
to any Mortgage Loan not satisfied in accordance with the procedures set
forth
herein.
On
or before each Transfer Date, the Owner will provide the Servicer with a
loan
level schedule identifying the Custodian, including contact information,
with
respect to each Mortgage Loan and the Custodian’s reference number for each
Mortgage Loan. The Owner shall designate the Servicer to obtain Mortgage
Files
from the Custodian on behalf of the Owner. Such designation will remain in
effect until revoked by the Owner. From time to time and as appropriate for
the
servicing or foreclosure of a Mortgage Loan, including for this purpose
collection under any Primary Insurance Policy, the Servicer may
request the release of a Mortgage File held by the Custodian.
The Servicer will provide the Custodian with two copies of a
release request or an electronic release request in a format acceptable to
the
Custodian. The Servicer will be obligated to return the related Mortgage
File to the Custodian when the need therefore by the Servicer
no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the
Custodial Account or the Mortgage File has been delivered to an attorney,
or to
a public trustee or other public official as required by law, for purposes
of
initiating or pursuing legal action or other proceedings for the foreclosure
of
the Mortgaged Loan either judicially or non-judicially. The Owner will instruct
the Custodian to provide directly to the Servicer loan level exception reports,
missing files and documents and to cooperate with the Servicer in the
reconciliation of system data.
41
Section
6.03 Servicing
Compensation.
As
compensation for its services hereunder, the Servicer shall be entitled to
withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis
of the
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Owner
to
pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly Payments.
Additional
servicing compensation in the form of assumption fees, to the extent provided
in
Section 6.01, late payment charges and other ancillary fees shall be retained
by
the Servicer to the extent not required to be deposited in the Custodial
Account. The Servicer shall be required to pay all expenses incurred by it
in
connection with its servicing activities hereunder and shall not be entitled
to
reimbursement thereof except as specifically provided for herein.
Section
6.04 Annual
Statements as to Compliance.
On
or
before March 1 of each calendar year, commencing in 2007, the Servicer shall
deliver to the Owner or any Master Servicer or Depositor an officer’s
certificate (each, an “Annual Statement of Compliance”) addressed to the Owner,
any Master Servicer and such Depositor and signed by an authorized officer
of
the Servicer, to the effect that (a) a review of the Servicer’s activities
during the immediately preceding calendar year (or applicable portion thereof)
and of its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer’s supervision, and
(b) to the best of such officers’ knowledge, based on such review, the Servicer
has fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar
year
(or applicable portion thereof) or, if there has been a failure to fulfill
any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof. Copies
of
such statement shall be provided by the Owner to any Person identified as
a
prospective purchaser of the Mortgage Loans. In the event that the Servicer
has
delegated any servicing responsibilities with respect to the Mortgage Loans
to a
Subservicer, the Servicer shall deliver an officer’s certificate of the
Subservicer as described above as to each Subservicer as and when required
with
respect to the Servicer.
Section
6.05 Annual
Independent Public Accountants' Servicing Report.
42
Except
with respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1st,
the
Company, at its expense, shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants
to
furnish a statement to each Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
similar in nature and that such firm is of the opinion that the provisions
of
this or similar Agreements have been complied with, and that, on the basis
of
such examination conducted in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and
(ii) such other exceptions as shall be set forth in such statement. By providing
Purchaser a copy of a Uniform Single Attestation Program Report from their
independent public accountant's on an annual basis, Company shall be considered
to have fulfilled its obligations under this Section 6.05. Copies of such
report
shall be provided by the Owner to any Person identified as a prospective
purchaser of the Mortgage Loans. Notwithstanding the foregoing, the Servicer’s
obligation to deliver such report under this Section, as to the Servicer
or any
Subservicer on an annual basis beginning with the report required in March
2007,
Servicer shall be considered to have fulfilled its obligations under this
Section 6.05 for such calendar year with respect to that entity.
Section
6.06 Report
on Assessment of Compliance and Attestation.
With
respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1 of each calendar year, commencing in 2007,
the
Servicer shall:
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(i)
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deliver
to the Owner, any Master Servicer or any Depositor a report (in
form and
substance reasonably satisfactory to the Owner, such Master Servicer
and
such Depositor) regarding the Servicer’s assessment of compliance with the
Servicing Criteria during the immediately preceding calendar year,
as
required under Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122
of Regulation AB. Such report shall be addressed to the Owner,
such Master
Servicer and such Depositor and signed by an authorized officer
of the
Servicer and shall address each of the “Applicable Servicing Criteria”
specified substantially on Exhibit H hereto (or those Servicing
Criteria
otherwise mutually agreed to by the Owner and the Servicer in response
to
evolving interpretations of Regulation
AB;
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(ii)
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deliver
to the Owner, any Master Servicer or any Depositor a report of
a
registered public accounting firm reasonably acceptable to the
Owner, such
Master Servicer and such Depositor that attests to, and reports
on, the
assessment of the compliance made by the Servicer and delivered
pursuant
to the .preceding paragraph. Such attestation shall be in accordance
with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act
and the Exchange Act;
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(iii)
|
cause
each Subservicer and each Subcontractor, determined by the Servicer
pursuant to Section 4.24(b) to be “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB, to deliver to
the Owner, any Master Servicer and any Depositor an assessment
of
compliance and accountants’ attestation as and when provided in paragraphs
(i) and (ii) of this Section 6.06; and
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43
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(iv)
|
deliver,
and cause each Subservicer and each Subcontractor described in
clause
(iii) to deliver to the Owner, any Master Servicer, any Depositor
and any
other Person that will be responsible for signing the certification
(a
“Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of
2002) on behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification signed by the appropriate officer of
the
Servicer in the form attached hereto as Exhibit
I.
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Each
assessment of compliance provided by a Subservicer pursuant to Section 6.06(i)
shall address each of the Servicing Criteria specified substantially in the
form
of Exhibit H hereto delivered to the Owner concurrently with the execution
of
this Agreement or, in the case of a Subservicer subsequently appointed as
such,
on or prior to the date of such appointment. An assessment of compliance
provided by a Subcontractor pursuant to Section 6.06(iii) need not address
any
elements of the Servicing Criteria other than those specified by the Servicer
pursuant to Section 4.24.
The
Servicer acknowledges that the parties identified in clause (iv) above may
rely
on the certification provided by the Servicer pursuant to such clause in
signing
a Sarbanes Certification and filing such with the Commission. Neither the
Owner,
any Master Servicer or any Depositor will request delivery of a certification
under clause (iv) above unless a Depositor is required under the Exchange
Act to
file an annual report on Form 10-K with respect to an issuing entity whose
asset
pool includes Mortgage Loans.
Section
6.07 Remedies.
(i) Any
failure by the Servicer, any Subservicer or any Subcontractor to deliver
any
information, report, certification, accountants’ letter or other material when
and as required under Article IX, Section 4.24, Section 6.04, Section 6.05
or
Section 6.06, or any breach by the Servicer of a representation or warranty
set
forth in Section 9.01(i)(i), or in a writing furnished pursuant to Section
9.01(i)(ii) and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not cured by
such
closing date, or any breach by the Servicer of a representation or warranty
in a
writing furnished pursuant to Section 9.01(i)(ii) to the extent made as of
a
date subsequent to such closing date, shall, except as provided in sub-clause
(ii) of this Section, immediately and automatically, without notice or grace
period, constitute an Event of Default with respect to the Servicer under
this
Agreement and any applicable Reconstitution Agreement, and shall entitle
the
Owner, any Master Servicer or any Depositor, as applicable, in its sole
discretion to terminate the rights and obligations of the Servicer as servicer
under this Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement or any applicable
Reconstitution Agreement to the contrary) of any compensation to the Servicer
if
the Servicer is servicing any of the Mortgage Loans in a Securitization
Transaction, appoint a successor servicer, in accordance with the related
securitization agreement, reasonably acceptable to any Master Servicer of
such
Securitization Transaction; provided that to the extent that any provision
of
this Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of
the
Servicer as servicer, such provision shall be given effect.
44
(ii) Any
failure by the Servicer, any Subservicer or any Subcontractor to deliver
any
information, report, certification or accountants’ letter when and as required
under Section 6.04, Section 6.05 or Section 6.06, including (except as provided
below) any failure by the Servicer to identify any Subcontractor “participating
in the servicing function” within the meaning of Item 1122 of Regulation AB,
which continues unremedied for ten (10) calendar days after the date on which
such information, report, certification or accountants’ letter was required to
be delivered shall constitute an Event of Default with respect to the Servicer
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Owner, any Master Servicer or Depositor, as applicable, in its
sole
discretion to terminate the rights and obligations of the Servicer under
this
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any compensation
to the Servicer; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides
for
the survival of certain rights or obligations following termination of the
Servicer as servicer, such provision shall be given effect.
Neither
the Owner nor any Depositor shall be entitled to terminate the rights and
obligations of the Servicer pursuant to this subparagraph (b)(ii) if a failure
of the Servicer to identify a Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB was attributable
solely to the role or functions of such Subcontractor with respect to mortgage
loans other than the Mortgage Loans.
(iii) The
Servicer shall promptly reimburse the Owner (or any designee of the Owner,
including the Master Servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Owner (or such designee) or such Depositor,
as such are incurred, in connection with the termination of the Servicer
as
servicer and the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit whatever rights
the
Owner or any Depositor may have under other provisions of this Agreement
and/or
any applicable Reconstitution Agreement or otherwise, whether in equity or
at
law, such as an action for damages, specific performance or injunctive
relief.
Section
6.08 Right
to Examine Servicer Records.
The
Owner, or its designee, shall have the right to examine and audit any and
all of
the books, records, or other information of the Servicer, whether held by
the
Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times
as
may be reasonable under applicable circumstances, without charge and upon
reasonable advance notice. The Owner shall pay its own expenses associated
with
such examination.
45
Section
6.09 Compliance
with REMIC Provisions.
If
a
REMIC election has been made with respect to the arrangement under which
the
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause
to
be taken) any action that, under the REMIC Provisions, if taken or not taken,
as
the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii)
result in the imposition of a tax upon the REMIC (including but not limited
to
the tax on “prohibited transactions” as defined in Section 860F(a) (2) of the
Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of
the Code) unless the Servicer has received an Opinion of Counsel (at the
expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of
any
such tax.
ARTICLE
VII
SERVICER
TO COOPERATE
Section
7.01 Provision
of Information.
During
the term of this Agreement, the Servicer shall furnish to the Owner such
periodic, special, or other reports or information, and copies or originals
of
any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein
as
shall be necessary, reasonable, or appropriate with respect to the Owner
or any
regulatory agency will be provided at the Owner’s expense. All such reports,
documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Owner may give.
The
Servicer shall execute and deliver all such instruments and take all such
action
as the Owner may reasonably request from time to time, in order to effectuate
the purposes and to carry out the terms of this Agreement.
Section
7.02 Financial
Statements; Servicing Facility.
In
connection with marketing the Mortgage Loans, the Owner may make available
to a
prospective Owner a Consolidated Statement of Operations of the Servicer
for the
most recently completed three fiscal years for which such a statement is
available, as well as a Consolidated Statement of Condition at the end of
the
last two fiscal years covered by such Consolidated Statement of Operations.
The
Servicer, upon request, also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on
behalf
of the Servicer (and are available upon request to members or stockholders
of
the Servicer or to the public at large). The Servicer, if it has not already
done so, agrees to furnish promptly to the Owner copies of the statements
specified above.
46
The
Servicer also agrees to allow access to knowledgeable financial, accounting
and
servicing officers of the Servicer for the purpose of answering questions
asked
by any Owner regarding recent developments affecting the Servicer, its servicing
practices or the financial statements of the Servicer.
The
Servicer also shall make available to Owner or prospective purchasers a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the financial
statements of the Servicer, and to permit any prospective purchaser to inspect
the Servicer's servicing facilities for the purpose of satisfying such
prospective purchaser that the Servicer has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE
VIII
THE
SERVICER
Section
8.01 Indemnification;
Third Party Claims.
In
addition to the Indemnification otherwise provided under this Agreement,
the
Servicer shall indemnify the Owner and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Owner may sustain in any way related to the failure of the Servicer
to
perform its duties and service the Mortgage Loans in strict compliance with
the
terms of this Agreement, or a related Reconstitution Agreement or resulting
from
a breach of the representations and warranties contained in this Agreement
or a
related Reconstitution Agreement. The Servicer immediately shall notify the
Owner if a claim is made by a third party with respect to this Agreement
or the
Mortgage Loans, assume (with the prior written consent of the Owner) the
defense
of any such claim and pay all expenses in connection therewith, including
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or the Owner in respect of such claim. The
Owner
promptly shall reimburse the Servicer for all amounts advanced by it pursuant
to
the preceding sentence except when the claim is in any way related to the
Servicer's indemnification pursuant to Section 3.02 or Section 6.07(iii),
or the
failure of the Servicer to service and administer the Mortgage Loans in strict
compliance with the terms of this Agreement. The Servicer shall follow any
written instructions received from the Owner in connection with such claim.
The
Servicer shall follow any written instructions received from the Owner in
connection with such claim. The indemnification obligation of the Servicer
set
forth herein shall survive the termination of this Agreement.
Section
8.02 Merger
or Consolidation of the Servicer.
The
Servicer shall keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein and shall obtain and preserve its qualification
to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement or
any of
the Mortgage Loans and to perform its duties under this Agreement.
47
Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer,
shall be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto,
anything herein to the contrary notwithstanding, provided, however, that
the
successor or surviving Person shall be an institution whose deposits are
insured
by FDIC or a company whose business is the origination and servicing of mortgage
loans, (ii) have a GAAP net worth of not less than $25,000,000, and (iii)
be a
Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in good standing and
shall
satisfy any requirements of Section 12.01 with respect to the qualifications
of
a successor to the Servicer. Furthermore, in the event the Servicer transfers
or
otherwise disposes of all or substantially all of its assets to an affiliate
of
the Servicer, such affiliate shall satisfy the condition above, and shall
also
be fully liable to the Owner for all of the Servicer's obligations and
liabilities hereunder.
Section
8.03 Limitation
on Liability of Servicer and Others.
Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Owner for any action taken or
for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Servicer or any such Person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement
or
any other liability which would otherwise be imposed under this Agreement.
The
Servicer and any director, officer, employee or agent of the Servicer may
rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action which is not incidental to its duties to service the Mortgage Loans
in
accordance with this Agreement and which in its opinion may involve it in
any
expense or liability, provided, however, that the Servicer may, with the
consent
of the Owner, undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto.
In
such event, the Servicer shall be entitled to reimbursement from the Owner
of
the reasonable legal expenses and costs of such action.
Section
8.04 Limitation
on Resignation and Assignment by Servicer.
The
Owner
has entered into this Agreement with the Servicer and subsequent purchasers
will
purchase the Mortgage Loans in reliance upon the independent status of the
Servicer, and the representations as to the adequacy of its servicing
facilities, personnel, records and procedures, its integrity, reputation
and
financial standing, and the continuance thereof. Therefore, the Servicer
shall
neither assign this Agreement or the servicing rights hereunder or delegate
its
rights or duties hereunder (other than pursuant to Sections 4.01 and 4.24)
or
any portion hereof or sell or otherwise dispose of all of its property or
assets
without the prior written consent of the Owner, which consent shall not be
unreasonably withheld.
The
Servicer shall not resign from the obligations and duties hereby imposed
on it
except by mutual consent of the Servicer and the Owner or upon the determination
that its duties hereunder are no longer permissible under applicable law
and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer shall be evidenced by an Opinion
of
Counsel to such effect delivered to the Owner which Opinion of Counsel shall
be
in form and substance acceptable to the Owner. No such resignation shall
become
effective until a successor shall have assumed the Servicer's responsibilities
and obligations hereunder in the manner provided in Section 12.01.
48
Without
in any way limiting the generality of this Section 8.04, in the event that
the
Servicer either shall assign this Agreement or the servicing responsibilities
hereunder or delegate its duties hereunder (other than pursuant to Sections
4.01
and 4.24) or any portion thereof or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Owner, then the Owner shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Servicer or
any
third party.
ARTICLE
IX
SECURITIZATION
TRANSACTIONS
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Section
9.01
|
Removal
of Mortgage Loans from Inclusion Under this Agreement Upon a
Securitization Transaction
|
The
Owner
and the Servicer agree that with respect to some or all of the Mortgage Loans,
the Owner, at its sole option, may effect Whole Loan Transfers, Agency Sales
or
Securitization Transactions, retaining the Servicer as the servicer thereof
or
subservicer if a master servicer is employed, or as applicable the
"seller/servicer." On the Reconstitution Date, the Mortgage Loans transferred
may cease to be covered by this Agreement; provided, however, that, in the
event
that any Mortgage Loan transferred pursuant to this Section 9 is rejected
by the
transferee, the Servicer shall continue to service such rejected Mortgage
Loan
on behalf of the Owner in accordance with the terms and provisions of this
Agreement.
The
Servicer shall cooperate with the Owner in connection with each Whole Loan
Transfer, Agency Sale or Securitization Transaction in accordance with this
Section 9. In connection therewith the Servicer shall:
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(a)
|
cooperate
fully with the Owner and any prospective purchaser with respect
to all
reasonable requests and due diligence procedures including participating
in meetings with rating agencies, bond insurers and such other
parties as
the Owner shall designate and participating in meetings with prospective
purchasers of the Mortgage Loans or interests therein and providing
information reasonably requested by such
purchasers;
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49
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(b)
|
make
all representations and warranties with respect to the servicing
of the
Mortgage Loans and with respect to the Servicer itself as of the
closing
date of each Whole Loan Transfer, Agency Sale or Securitization
Transaction (each, a “Reconstitution Date”) modified to the extent
necessary to accurately reflect the pool statistics of the Mortgage
Loans
as of the date of such Reconstitution and supplemented by additional
representations and warranties with respect to the Servicer and
the
servicing of the Mortgage Loans that are not unreasonable under
the
circumstances as of the date of such
Reconstitution;
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(c)
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deliver
to the Owner such information, reports, letters and certifications
as are
required pursuant to this Agreement and to indemnify the Owner
and its
affiliates as set forth herein;
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(d)
|
deliver
to the Owner, and to any Person designated by the Owner, such legal
documents and in-house Opinions of Counsel as are customarily delivered
by
servicers, as the case may be, and reasonably determined by the
Owner to
be necessary in connection with an Reconstitution, as the case
may be,
such in-house Opinions of Counsel for a Securitization Transaction
to be
in the form reasonably acceptable to the Owner, it being understood
that
the cost of any opinions of outside special counsel that may be
required
for a Reconstitution, as the case may be, shall be the responsibility
of
the Owner;
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(e)
|
in
connection with any Securitization Transaction, the Servicer shall
(1)
within five (5) Business Days following request by the Owner or
any
Depositor, provide to the Owner and such Depositor (or, as applicable,
cause each Subservicer to provide), in writing and in form and
substance
reasonably satisfactory to the Owner and such Depositor, the information
and materials specified in subsections (f), and (i) and (2) as
promptly as
practicable following notice to or discovery by the Servicer, provide
to
the Owner and any Depositor (in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor) the information
specified in subsection (g).
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(f)
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If
so requested by the Owner or any Depositor, the Servicer shall
provide
such information regarding the Servicer, as servicer of the Mortgage
Loans, and each Subservicer (each of the Servicer and each Subservicer,
for purposes of this paragraph, a “Servicer”), as is requested for the
purpose of compliance with Items 1108, 1117 and 1119 of Regulation
AB.
Such information shall include, at a
minimum:
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50
|
A.
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the
Servicer’s form of
organization;
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|
B.
|
a
description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer’s experience in
servicing assets of any type as well as a more detailed discussion
of the
Servicer’s experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of the Servicer’s
portfolio of residential mortgage loans of a type similar to the
Mortgage
Loans and information on factors related to the Servicer that may
be
material, in the good faith judgment of the Owner or any Depositor,
to any
analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:
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1.
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whether
any prior securitizations of mortgage loans of a type similar to
the
Mortgage Loans involving the Servicer have defaulted or experienced
an
early amortization or other performance triggering event because
of
servicing during the three-year period immediately preceding the
related
Securitization Transaction;
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2.
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the
extent of outsourcing the Servicer
utilizes;
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3.
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whether
there has been previous disclosure of material noncompliance with
the
applicable servicing criteria with respect to other securitizations
of
residential mortgage loans involving the Servicer as a servicer
during the
three-year period immediately preceding the related Securitization
Transaction;
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4.
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whether
the Servicer has been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger;
and
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5.
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such
other information as the Owner or any Depositor may reasonably
request for
the purpose of compliance with Item 1108(b)(2) of Regulation
AB;
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C.
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a
description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to
the
Servicer’s policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements
for
mortgage loans of a type similar to the Mortgage
Loans;
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D.
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information
regarding the Servicer’s financial condition, to the extent that there is
a material risk that an adverse financial event or circumstance
involving
the Servicer could have a material adverse effect on the performance
by
the Servicer of its servicing obligations under this Agreement
or any
Reconstitution Agreement;
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51
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E.
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information
regarding advances made by the Servicer on the Mortgage Loans and
the
Servicer’s overall servicing portfolio of residential mortgage loans for
the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized
officer
of the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during
such period, or, if such statement would not be accurate, information
regarding the percentage and type of advances not made as required,
and
the reasons for such failure to
advance;
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|
F.
|
a
description of the Servicer’s processes and procedures designed to address
any special or unique factors involved in servicing loans of a
similar
type as the Mortgage
Loans;
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G.
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a
description of the Servicer’s processes for handling delinquencies,
losses, bankruptcies and recoveries, such as through liquidation
of
mortgaged properties, sale of defaulted mortgage loans or workouts;
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H.
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information
as to how the Servicer defines or determines delinquencies and
charge-offs, including the effect of any grace period, re-aging,
restructuring, partial payments considered current or other practices
with
respect to delinquency and loss experience;
and
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I.
|
a
description of any material legal or governmental proceedings pending
(or
known to be contemplated) against the Servicer;
and
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J.
|
a
description of any affiliation or relationship between the Servicer
and
any of the following parties to a Securitization Transaction, as
such
parties are identified to the Servicer by the Owner or any Depositor
in
writing in advance of such Securitization
Transaction:
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(1)
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the
sponsor;
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(2)
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the
depositor;
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(3)
|
the
issuing entity;
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(4)
|
any
servicer;
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(5)
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any
trustee;
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(6)
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any
originator;
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(7)
|
any
significant obligor;
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(8)
|
any
enhancement or support provider;
and
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(9)
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any
other material transaction party.
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52
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(g)
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For
the purpose of satisfying the reporting obligation under the Exchange
Act
with respect to any class of asset-backed securities, the Servicer
shall
(or shall cause each Subservicer to) (i) provide prompt notice
to the
Owner, any Master Servicer and any Depositor in writing of (A)
any
material litigation or governmental proceedings involving the Servicer
or
any Subservicer, (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction between
the
Servicer or any Subservicer and any of the parties specified in
clause (J)
of paragraph (f) of this Section (and any other parties identified
in
writing by the requesting party) with respect to such Securitization
Transaction, (C) any Event of Default under the terms of this Agreement
or
any Reconstitution Agreement, (D) any merger, consolidation or
sale of
substantially all of the assets of the Servicer, and (E) the Servicer’s
entry into an agreement with a Subservicer to perform or assist
in the
performance of any of the Servicer’s obligations under this Agreement or
any Reconstitution Agreement and (ii) provide to the Owner and
any
Depositor a description of such proceedings, affiliations or
relationships.
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(h)
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As
a condition to the succession to the Servicer or any Subservicer
as
servicer or subservicer under this Agreement or any Reconstitution
Agreement by any Person (i) into which the Servicer or such Subservicer
may be merged or consolidated, or (ii) which may be appointed as
a
successor to the Servicer or any Subservicer, the Servicer shall
provide
to the Owner and any Depositor, at least 15 calendar days prior
to the
effective date of such succession or appointment, (x) written notice
to
the Owner and any Depositor of such succession or appointment and
(y) in
writing and in form and substance reasonably satisfactory to the
Owner and
such Depositor, all information reasonably requested by the Owner
or any
Depositor in order to comply with its reporting obligation under
Item 6.02
of Form 8-K with respect to any class of asset-backed
securities.
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(i)
|
(i)The
Servicer shall be deemed to represent to the Owner, to any Master
Servicer
and to any Depositor, as of the date on which information is first
provided to the Owner, any Master Servicer or any Depositor under
this
Section 9.01(i) that, except as disclosed in writing to the Owner,
any
Master Servicer or such Depositor prior to such date: (1) the Servicer
is
not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Servicer;
(2) the
Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger; (3) no material noncompliance
with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer
as
servicer has been disclosed or reported by the Servicer; (4) no
material
changes to the Servicer’s policies or procedures with respect to the
servicing function it will perform under this Agreement and any
Reconstitution Agreement for mortgage loans of a type similar to
the
Mortgage Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (5) there are
no aspects
of the Servicer’s financial condition that could have a material adverse
effect on the performance by the Servicer of its servicing obligations
under this Agreement or any Reconstitution Agreement; (6) there
are no
material legal or governmental proceedings pending (or known to
be
contemplated) against the Servicer or any Subservicer ; and (7)
there are
no affiliations, relationships or transactions relating to the
Servicer or
any Subservicer with respect to any Securitization Transaction
and any
party thereto identified by the related Depositor of a type described
in
Item 1119 of Regulation AB.
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53
(ii) On
any
date following the date on which information is first provided to the Owner,
any
Master Servicer or any Depositor under this Section 9.01(i), the Servicer
shall,
within five (5) Business Days following such request, confirm in writing
the
accuracy of the representations and warranties set forth in sub clause (i)
above
or, if any such representation and warranty is not accurate as of the date
of
such request, provide reasonably adequate disclosure of the pertinent facts,
in
writing, to the requesting party.
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(j)
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In
addition to such information as the Servicer, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, not later
than ten
days prior to the deadline for the filing of any distribution report
on
Form 10-D in respect of any Securitization Transaction that includes
any
of the Mortgage Loans serviced by the Servicer or any Subservicer,
the
Servicer or such Subservicer, as applicable, shall provide to the
party
responsible for filing such report (including, if applicable, the
Master
Servicer) notice of the occurrence of any of the following events
along
with all information, data, and materials related thereto as may
be
required to be included in the related distribution report on Form
10-D
(as specified in the provisions of Regulation AB referenced
below):
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(i) any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a)(11) of Regulation AB);
(ii) material
breaches of pool asset representations or warranties or transaction covenants
(Item 1121(a)(12) of Regulation AB); and
(iii)
information regarding new asset-backed securities issuances backed by the
same
pool assets, any pool asset changes (such as, additions, substitutions or
repurchases), and any material changes in origination, underwriting or other
criteria for acquisition or selection of pool assets (Item 1121(a)(14) of
Regulation AB).
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(k)
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The
Servicer shall provide to the Owner, any Master Servicer and any
Depositor, evidence of the authorization of the person signing
any
certification or statement, evidence of Fidelity Bond Insurance
and Errors
and Omission Insurance policy, financial information and reports,
and such
other information related to the Servicer or any Subservicer or
the
Servicer’s or Subservicer’s performance hereunder and which information is
available to the Servicer and necessary for compliance with Regulation
AB.
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(l)
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In
addition to such information as the Servicer, as servicer, is obligated
to
provide pursuant to other provisions of this Agreement, if so requested
by
the Owner or any Depositor, the Servicer shall provide such additional
information as such party may reasonably request, including evidence
of
the authorization of the person signing any certification or statement,
financial information and reports, and such other information related
to
the Servicer or any Subservicer or the Servicer or such Subservicer’s
performance hereunder and such information regarding the performance
or
servicing of the Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of
Regulation AB. Such information shall be provided concurrently
with the
monthly reports otherwise required to be delivered by the servicer
under
this Agreement, commencing with the first such report due not less
than
ten (10) Business Days following such
request.
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54
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(m)
|
The
Servicer shall indemnify the Owner, each affiliate of the Owner,
and each
of the following parties participating in a Securitization Transaction:
each sponsor and issuing entity; each Person, including, but not
limited
to, any Master Servicer, if applicable, responsible for the preparation,
execution or filing of any report required to be filed with the
Commission
with respect to such Securitization Transaction, or for execution
of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under
the
Exchange Act with respect to such Securitization Transaction; each
broker
dealer acting as underwriter, placement agent or initial Owner,
each
Person who controls any of such parties or the Depositor (within
the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange
Act); and the respective present and former directors, officers,
employees, affiliates and agents of each of the foregoing and of
the
Depositor (each an “Indemnified Party”), and shall hold each of them
harmless from and against any claims, losses, damages, penalties,
fines,
forfeitures, legal fees and expenses and related costs, judgments,
and any
other costs, fees and expenses that any of them may sustain arising
out of
or based upon:
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|
(i)
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(A)
any untrue statement of a material fact contained or alleged
to be
contained in any information, report, certification, data, accountants’
letter or other material provided under Sections 4.24, 6.04,
6.06,
9.01(e), (f) and (l) by or on behalf of the Servicer, or provided
under
Sections 4.24, 6.04, 6.06, 9.01(e), (f) and (l) by or on behalf
of any
Subservicer or Subcontractor (collectively, the “Servicer Information”),
or (B) the omission or alleged omission to state in the Servicer
Information a material fact required to be stated in the Servicer
Information or necessary in order to make the statements therein,
in the
light of the circumstances under which they were made, not misleading;
provided,
by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference
to the
Servicer Information and not to any other information communicated
in
connection with a sale or purchase of securities, without regard
to
whether the Servicer Information or any portion thereof is presented
together with or separately from such other
information;
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|
(ii)
|
any
breach by the Servicer of its obligations under this Section 9.01(l),
including particularly any failure by the Servicer, any Subservicer
or any
Subcontractor to deliver any information, report, certification,
accountants’ letter or other material when and as required under Sections
4.24, 6.04, 6.05, 6.06, 9.01(h), (i) and (l), including any failure
by the
Servicer to identify any Subcontractor “participating in the servicing
function” within the meaning of Item 1122 of Regulation AB;
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|
(iii)
|
any
breach by the Servicer of a representation or warranty set forth
in
Section 9.01(i)(i) or in a writing furnished pursuant to Section
9.01(i)(ii) and made as of a date prior to the closing date of
the related
Securitization Transaction, to the extent that such breach is not
cured by
such closing date, or any breach by the Servicer of a representation
or
warranty in a writing furnished pursuant to Section 9.01(i)(ii)
to the
extent made as of a date subsequent to such closing date;
or
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55
|
(iv)
|
the
negligence, bad faith or willful misconduct of the Servicer in
connection
with its performance under this Section
9.01(l).
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If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless an Indemnified party, then the Servicer agrees that it shall contribute
to the amount paid or payable by such Indemnified Party as a result of any
claims, losses, damages or liabilities incurred by such Indemnified Party
in
such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
In
the
case of any failure of performance described in sub-clause (ii) of this Section
9.01(l), the Servicer shall promptly reimburse the Owner, any Depositor,
as
applicable, and each Person responsible for the preparation, execution or
filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Securitization Transaction, for all costs reasonably incurred by each such
party
in order to obtain the information, report, certification, accountants’ letter
or other material not delivered as required by the Servicer, any Subservicer
or
any Subcontractor.
This
indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
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(n)
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to
negotiate and execute one or more servicing agreements between
the
Servicer and any master servicer which is generally considered
to be a
prudent master servicer in the secondary mortgage market, designated
by
the Owner in its sole discretion after consultation with the Servicer
and/or one or more custodial agreements among the Owner, the Servicer
and
a third party custodian/trustee which is generally considered to
be a
prudent custodian/trustee in the secondary mortgage market designated
by
the Owner in its sole discretion after consultation with the Servicer,
in
either case for the purpose of pooling the Mortgage Loans with
other
mortgage loans for resale or securitization, which subservicing
agreements
or servicing agreements in the case of a securitization shall contain
contractual provisions including, but not limited to, servicer
advances of
delinquent scheduled payments of principal and interest through
liquidation (unless deemed non-recoverable) and prepayment interest
shortfalls (to the extent of the monthly servicing fee payable
thereto);
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|
(o)
|
the
Servicer shall, at the Owner’s expense, make available to the Owner, its
affiliates, successors or assigns an agreed-upon procedures letter
concerning the aforementioned disclosures, which letter shall be
issued by
an accounting firm selected by the Servicer and acceptable to the
Owner,
its affiliates, successors or assigns, for inclusion in the offering
materials for the securities created in the Securitization Transaction;
and
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56
|
(p)
|
in
the event the Owner appoints a credit risk manager in connection
with a
Securitization Transaction, to execute a credit risk management
agreement
and provide reports and information reasonably required by the
credit risk
manager.
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The
Owner
shall indemnify the Servicer, each affiliate of the Servicer, each Person
who
controls any of such parties or the Servicer (within the meaning of Section
15
of the Securities Act and Section 20 of the Exchange Act) and the respective
present and former directors, officers, employees and agents of each of the
foregoing and of the Servicer, and shall hold each of them harmless from
and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) any
untrue statement of a material fact or alleged untrue statement of material
fact
contained in any offering materials related to a Securitization Transaction,
including without limitation the registration statement, prospectus, prospectus
supplement, any private placement memorandum, any free writing prospectuses,
any
ABS informational and computational material, and any amendments or supplements
to the foregoing (collectively, the “Securitization Materials”) or
(ii) the
omission or alleged omission to state in the Securitization Materials a material
fact required to be stated in the Securitization Materials or necessary in
order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, but only to the extent that such untrue
statement or omission is other than a statement or omission arising out of,
resulting from, or based upon the Servicer Information.
If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless an Indemnified Party, then the Owner agrees that it shall contribute
to
the amount paid or payable by such Indemnified Party as a result of any claims,
losses, damages or liabilities incurred by such Indemnified Party in such
proportion as is appropriate to reflect the relative fault of such Indemnified
Party on the one hand and the Purchaser on the other.
This
indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
The
Owner
and the Servicer acknowledge and agree that the purpose of Section 9.01(h)
is to
facilitate compliance by the Owner and any Depositor with the provisions
of
Regulation AB and related rules and regulations of the Commission (or the
provision in a private offering of disclosure comparable to that required
under
the Securities Act) and the Xxxxxxxx-Xxxxx Act. Although Regulation AB is
applicable by its terms only to offerings of asset-backed securities that
are
registered under the Securities Act, the Servicer acknowledges that investors
in
privately offered securities may require that the Owner or any Depositor
provide
comparable disclosure in unregistered offerings. References in this Agreement
to
compliance with Regulation AB include provisions of comparable disclosure
in
private offerings.
57
Neither
the Owner nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder.
The
Servicer acknowledges that interpretations of the requirements of Regulation
AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply
with
requests made by the Owner, any Master Servicer or any Depositor in good
faith
for delivery of information under these provisions on the basis of established
and evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Servicer shall cooperate fully with the Owner
and any Master Servicer to deliver to the Owner (including any of its assignees
or designees), any Master Servicer and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good
faith determination of the Owner, any Master Servicer or any Depositor to
permit
the Owner, such Master Servicer or such Depositor to comply with the provisions
of Regulation AB, together with such disclosures relating to the Servicer,
any
Subservicer, and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Owner, any Master Servicer or any Depositor to
be
necessary in order to effect such compliance. In the event of any conflict
between Section 9.01 and any other term or provision in this Agreement, the
provisions of Section 9.01 shall control.
The
Owner
(including any of its assignees or designees) shall cooperate with the Servicer
by providing timely notice of requests for information under these provisions
any by reasonably limiting such request to information required, in the Owner’s
reasonable judgment to comply with regulation AB.
All
Mortgage Loans (i) not sold or transferred pursuant to Whole Loan Transfers,
Agency Sales or Securitization Transactions or (ii) that are subject to a
Securitization Transaction for which the related trust is terminated for
any
reason, shall remain subject to this Agreement and shall continue to be serviced
in accordance with the terms of this Agreement on an actual/actual basis
and
with respect thereto this Agreement shall remain in full force and
effect.
ARTICLE
X
DEFAULT
Section
10.01 Events
of Default.
Each
of
the following shall constitute an Event of Default on the part of the
Servicer:
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(i)
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any
failure by the Servicer to remit to the Owner any payment required
to be
made under the terms of this Agreement which continues unremedied
for a
period of two (2) Business Days after the date upon which written
notice
of such failure, requiring the same to be remedied, shall have
been given
to the Servicer by the Owner; or
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|
(ii)
|
failure
by the Servicer duly to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Servicer
set forth
in this Agreement or in the Custodial Agreement which continues
unremedied
for a period of sixty (60) days (except that such number of days
shall be
fifteen (15) in the case of a failure to pay any premium for any
insurance
policy required to be maintained under this Agreement) after the
date on
which written notice of such failure, requiring the same to be
remedied,
shall have been given to the Servicer by the Owner or by the Custodian;
or
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58
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(iii)
|
failure
by the Servicer to maintain its license to do business in any jurisdiction
where the Mortgaged Property is located if such license is required;
or
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|
(iv)
|
a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or
for the
winding-up or liquidation of its affairs, shall have been entered
against
the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days;
or
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|
(v)
|
the
Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling
of assets and liabilities or similar proceedings of or relating
to the
Servicer or of or relating to all or substantially all of its property;
or
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|
(vi)
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the
Servicer shall admit in writing its inability to pay its debts
generally
as they become due, file a petition to take advantage of any applicable
insolvency, bankruptcy or reorganization statute, make an assignment
for
the benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations; or
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|
(vii)
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the
Servicer ceases to meet the qualifications of a Xxxxxx Mae/Xxxxxxx
Mac
servicer or the Servicer is not eligible to act as servicer or
master
servicer for mortgage loans subject to residential mortgage backed
securities transactions rated by any nationally recognized rating
agency
or is eligible to act as such only with enhanced credit support;
or
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|
(viii)
|
S&P,
Xxxxx’x or any other rating agency lowers Servicer’s servicing rating
anytime after the date of this Agreement;
or
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|
(ix)
|
the
Delinquency Ratio exceeds a certain threshold as specified by Owner
as to
each Securitization Transaction
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(x)
|
the
Servicer attempts to assign its right to servicing compensation
hereunder
or the Servicer attempts, without the consent of the Owner, to
sell or
otherwise dispose of all or substantially all of its property or
assets or
to assign this Agreement or the servicing responsibilities hereunder
in
violation of Section 8.04 or to delegate its duties hereunder or
any
portion thereof; or
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59
|
(xi)
|
failure
by the Servicer to duly perform, within the required time period,
its
obligations under Sections 4.24, 6.04, 6.05, 6.06 and 9.01 which
failure
continues unremedied for a period of ten (10) days after the date
on which
such information was required to be
delivered.
|
In
each
and every such case, so long as an Event of Default shall not have been
remedied, in addition to whatever rights the Owner may have at law or equity
to
damages, including injunctive relief and specific performance, the Owner,
by
notice in writing to the Servicer, may terminate all the rights and obligations
of the Servicer under this Agreement and in and to the Mortgage Loans and
the
proceeds thereof.
Upon
receipt by the Servicer of such written notice, all authority and power of
the
Servicer under this Agreement, whether with respect to the Mortgage Loans
or
otherwise, shall pass to and be vested in the successor appointed pursuant
to
Section 12.01. Upon written request from any Owner, the Servicer shall prepare,
execute and deliver to the successor entity designated by the Owner any and
all
documents and other instruments, place in such successor's possession all
Mortgage Files, and do or cause to be done all other acts or things necessary
or
appropriate to effect the purposes of such notice of termination, including
but
not limited to the transfer and endorsement or assignment of the Mortgage
Loans
and related documents at the Servicer’s sole expense. The Servicer shall
cooperate with the Owner and such successor in effecting the termination
of the
Servicer's responsibilities and rights hereunder, including without limitation,
the transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Servicer to the Custodial Account
or
Escrow Account or thereafter received with respect to the Mortgage
Loans.
If
any of
the Mortgage Loans are MERS Mortgage Loans, in connection with the termination
or resignation (as described in Section 8.04) of the Servicer hereunder,
either
(i) the successor servicer shall represent and warrant that it is a member
of
MERS in good standing and shall agree to comply in all material respects
with
the rules and procedures of MERS in connection with the servicing of the
Mortgage Loans that are registered with MERS, or (ii) the Servicer shall
cooperate with the successor servicer either (x) in causing MERS to execute
and
deliver an assignment of Mortgage in recordable form to transfer the Mortgage
from MERS to the Owner and to execute and deliver such other notices, documents
and other instruments as may be necessary to remove such Mortgage Loan(s)
from
the MERS® System or (y) in causing MERS to designate on the MERS® System the
successor servicer as the servicer of such Mortgage Loan.
Section
10.02 Waiver
of Defaults.
By
a
written notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose
of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so
waived.
60
ARTICLE
XI
TERMINATION
Section
11.01 Termination.
This
Agreement shall terminate upon either: (i) the later of the final payment
or
other liquidation (or any advance with respect thereto) of the last Mortgage
Loan or the disposition of any REO Property with respect to the last Mortgage
Loan and the remittance of all funds due hereunder; or (ii) mutual consent
of
the Servicer and the Owner in writing; or (iii) termination pursuant to Section
10.01 or 11.02.
Upon
written request from the Owner in connection with any such termination, the
Servicer shall prepare, execute and deliver, any and all documents and other
instruments, place in the Owner's possession all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer
and
endorsement or assignment of the Mortgage Loans and related documents, including
any transfers on the MERS System, or otherwise, at the Servicer's sole expense.
The Servicer agrees to cooperate with the Owner and such successor in effecting
the termination of the Servicer's responsibilities and rights hereunder as
servicer, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by
the Servicer to the Custodial Account, REO Account or Escrow Account or
thereafter received with respect to the Mortgage Loans. The indemnification
obligation of the Servicer set forth herein shall survive the termination
of
this Agreement.
Section
11.02 Termination
Without Cause.
The
Owner
may terminate, at its sole option, any rights the Servicer may have hereunder,
without cause as provided in this Section 11.02. Any such notice of termination
shall be in writing and delivered to the Servicer by registered mail as provided
in Section 12.05.
The
Servicer shall be entitled to receive, as liquidated damages, upon the transfer
of the Servicing Rights, an amount equal to 1.25% of the aggregate outstanding
principal balance of the terminated Mortgage Loans as of the termination
date,
paid by the Owner to the Servicer with respect to all of the Mortgage Loans
so
terminated.
ARTICLE
XII
MISCELLANEOUS
PROVISIONS
Section
12.01 Successor
to Servicer.
Prior
to
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Sections 8.04, 10.01, 11.01(ii) or pursuant to Section 11.02
the
Owner shall, (i) succeed to and assume all of the Servicer's responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a successor
having the characteristics set forth in Section 8.02 and which shall succeed
to
all rights and assume all of the responsibilities, duties and liabilities
of the
Servicer under this Agreement prior to the termination of Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements
for
the compensation of such successor out of payments on Mortgage Loans as it
and
such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under
this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of the Owner or its successor. The resignation
or removal of the Servicer pursuant to the aforementioned sections shall
not
become effective until a successor shall be appointed pursuant to this Section
12.01 and shall in no event relieve the Servicer of the representations and
warranties made pursuant to Section 3.01 and the remedies available to the
Owner
under Sections 3.02 and 8.01, it being understood and agreed that the provisions
of such Sections 3.01, 3.02and 8.01 shall be applicable to the Servicer
notwithstanding any such sale, assignment, resignation or termination of
the
Servicer, or the termination of this Agreement.
61
Any
successor appointed as provided herein shall execute, acknowledge and deliver
to
the Servicer and to the Owner an instrument accepting such appointment, wherein
the successor shall make the representations and warranties set forth in
Section
3.01, whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Servicer,
with like effect as if originally named as a party to this Agreement provided,
however, that such successor shall not assume, and Servicer shall indemnify
such
successor for, any and all liabilities arising out of the Servicer’s acts. Any
termination or resignation of the Servicer or termination of this Agreement
pursuant to Section 8.04, 10.01, 11.01 or 11.02 shall not affect any claims
that
any Owner may have against the Servicer arising out of the Servicer's actions
or
failure to act prior to any such termination or resignation or remedies with
respect to such claims.
The
Servicer shall deliver promptly to the successor servicer the funds in the
Custodial Account, REO Account and Escrow Account and all Mortgage Files
and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and deliver such instruments and
do such
other things as may reasonably be required to more fully and definitively
vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
Upon
a
successor's acceptance of appointment as such, the Servicer shall notify
by mail
the Owner of such appointment in accordance with the procedures set forth
in
Section 12.05.
Section
12.02 Amendment.
This
Agreement may be amended from time to time by written agreement signed by
the
Servicer and the Owner.
Section
12.03 Governing
Law.
62
This
Agreement shall be construed in accordance with the laws of the State of
New
York without regard to any conflicts of law provisions and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with the laws of the State of New York, except to the extent preempted by
Federal law.
Section
12.04 Duration
of Agreement.
This
Agreement shall continue in existence and effect until terminated as herein
provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Owner.
Section
12.05 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
|
(i)
|
if
to the Servicer with respect to servicing and investor reporting
issues:
|
Xxxxx
Fargo Bank, N.A.
1
Home
Xxxxxx
Xxx
Xxxxxx, XX 00000-0000
Attention:
Xxxx X. Xxxxx, MAC X2401-042
Fax:
515/000-0000
with
a
copy to:
Xxxxx
Fargo Bank, N.A.
1
Home
Campus
Xxx
Xxxxxx, Xxxx 00000-0000
Attention:
General Counsel MAC X2401-06T
or
such
other address as may hereafter be furnished to the Owner in writing by the
Servicer;
|
(ii)
|
if
to Owner:
|
HSBC
Bank
(USA) Inc.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxx Xxxxxxxxxx
Telecopy:
000 000-0000
63
or
such
other address as may hereafter be furnished to the Servicer in writing by
the
Owner.
Section
12.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in
no way
affect the validity or enforceability of the other provisions of this Agreement.
If the invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith,
to
develop a structure the economic effect of which is nearly as possible the
same
as the economic effect of this Agreement without regard to such
invalidity.
Section
12.07 Relationship
of Parties.
Nothing
herein contained shall be deemed or construed to create a partnership or
joint
venture between the parties hereto and the services of the Servicer shall
be
rendered as an independent contractor and not as agent for the
Owner.
Section
12.08 Execution;
Successors and Assigns.
This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed,
shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same agreement. Subject to Section 8.04, this Agreement shall inure
to
the benefit of and be binding upon, and shall be enforceable by, the Servicer
and the Owner and their respective successors and assigns, including without
limitation, any trustee or master servicer appointed by the Owner with respect
any Whole Transfer or Securitization Transaction. The parties agree that
this
Agreement and signature pages thereof may be transmitted between them by
facsimile and that faxed signatures may constitute original signatures and
that
a faxed signature page containing the signature (faxed or original) is binding
on the parties.
Section
12.09 Recordation
of Assignments of Mortgage.
To
the
extent permitted by applicable law, as to each Mortgage Loan which is not
a MERS
Mortgage Loan, each of the Assignments of Mortgage is subject to recordation
in
all appropriate public offices for real property records in all the counties
or
other comparable jurisdictions in which any or all of the Mortgaged Properties
are situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected at the Servicer's expense in the event
recordation is either necessary under applicable law or requested by the
Owner
at its sole option.
64
Section
12.10 Assignment
by Owner.
The
Owner
shall have the right, without the consent of the Servicer to assign, in whole
or
in part, its interest under this Agreement with respect to some or all of
the
Mortgage Loans, and designate any Person to exercise any rights of the Owner
hereunder, by executing an Assignment and Assumption Agreement substantially
in
the form attached as Exhibit B, and the assignee or designee shall accede
to the
rights and obligations hereunder of the Owner with respect to such Mortgage
Loans. Upon any such assignment, the Person to whom such assignment is made
(a
“Successor Owner”) shall succeed to all rights and obligations of the Owner
under this Agreement to the extent of the related Mortgage Loan or Mortgage
Loans and this Agreement, to the extent of the related Mortgage Loan or Loans,
shall be deemed to be a separate and distinct Agreement between the Servicer
and
such Successor Owner, and a separate and distinct Agreement between the Servicer
and each other Successor Owner to the extent of the other related Mortgage
Loan
or Loans. All references to the Owner in this Agreement shall be deemed to
include its assignee or designee. This Agreement shall not be assigned, pledged
or hypothecated by the Servicer to a third party without the consent of the
Owner.
Section
12.11 Solicitation
of Mortgagor.
Neither
the Owner nor the Servicer shall, after the Sale Date, take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed
that
neither (i) promotions undertaken by the Owner or the Servicer or any affiliate
which are directed to the general public at large, including, without
limitation, mass mailings based upon commercially acquired mailing lists,
newspaper, radio, television advertisements nor (ii) serving the refinancing
needs of a Mortgagor who, without solicitation, contacts the Owner or the
Servicer in connection with the refinance of such Mortgage or Mortgage Loan,
shall constitute solicitation under this Section.
Section
12.12 Further
Agreements.
The
Owner
and the Servicer each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or appropriate to
effectuate the purposes of this Agreement.
Section
12.13 Conflicts.
If
any
conflicting terms shall exist between this Agreement, the Purchase Agreement,
and any Commitment Letter, the terms and conditions of the Commitment Letter
shall govern over all other documents; the Purchase Agreement shall govern
over
this Agreement.
Section
12.14 General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(i) the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
65
(ii) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(iii) references
herein to "Articles", "Sections", "Subsections", "Paragraphs", and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(iv) a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v) the
words
"herein", "hereof", "hereunder" and other words of similar import refer to
this
Agreement as a whole and not to any particular provision; and
(vi) the
term
"include" or "including" shall mean without limitation by reason of
enumeration.
Section
12.15 Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
Section
12.16 Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof
and
are an integral part of this Agreement.
Section
12.17 Reproduction
of Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a)
consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may
be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section
12.18 Third
Party Beneficiaries.
For
purposes of Sections 4.24, 6.04, 6.06 and 9.01 and any related provisions
thereto, each Master Servicer shall be considered a third-party beneficiary
of
this Agreement, entitled to all the rights and benefits hereof as if it were
a
direct party to this Agreement.
66
[Intentionally
Blank - Next Page Signature Page]
67
IN
WITNESS WHEREOF, the Servicer and the Owner have caused their names to be
signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
|
HSBC
BANK (USA) INC
|
XXXXX
FARGO BANK, N.A.
|
|
Owner
|
Servicer
|
|
By:
|
By:
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
68
|
STATE
OF
|
)
|
|
) ss:
|
|
|
COUNTY
OF ___________
|
)
|
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for
said
State, personally appeared______________, known to me to be [Vice] President
of
Xxxxx Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
Notary
Public
My
Commission expires
69
|
STATE
OF
|
)
|
|
) ss:
|
|
|
COUNTY
OF
|
)
|
On
the
_____ day of _______________, 20___ before me, a Notary Public in and for
said
State, personally appeared _____________________________________, known to
me to
be the ______________________________ of ______________________________,
the
corporation that executed the within instrument and also known to me to be
the
person who executed it on behalf of said corporation, and acknowledged to
me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the day
and
year in this certificate first above written.
Notary
Public
My
Commission expires
70
EXHIBIT
A
FORM
ACKNOWLEDGMENT AGREEMENT
THIS
ACKNOWLEDGMENT AGREEMENT, dated as of _____________, (the “Acknowledgement
Agreement”), between @, (“Owner”), and @, (“Servicer”), (together, the
“Parties”).
WITNESSETH:
WHEREAS,
Owner has purchased certain mortgage loans [on
a servicing released basis] [on a servicing retained basis]
identified
on Schedule I attached hereto, (the “Mortgage Loans”).
WHEREAS,
the Owner desires to retain Servicer to service and provide management and
disposition services for the Mortgage Loans on behalf of the Owner pursuant
to
the terms of that certain Servicing Agreement by and between the Owner and
the
Servicer dated as @ (the “ Servicing Agreement”);
NOW
THEREFORE, for and in consideration of the mutual premises set forth herein
and
other good and valuable consideration the receipt and sufficiency of which
hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Unless
otherwise amended by this Acknowledgment Agreement, all provisions of the
Servicing Agreement shall apply to the servicing of the Mortgage
Loans.
2. The
Servicing Fee Rate with respect to the Mortgage Loans shall be @%
3. Capitalized
terms not otherwise defined herein shall have the meanings assigned under
the
Servicing Agreement.
4. This
Agreement is entered into in the State of New York. Its construction and
rights,
remedies, and obligations arising by, under, through, or on account of it
will
be governed by the laws of the State of New York excluding its conflict of
laws
rules and will be deemed performable in the State of New York.
5. This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
[SIGNATURES
APPEAR ON NEXT PAGE]
71
IN
WITNESS WHEREOF, the parties hereto have caused this Acknowledgment Agreement
to
be duly executed on their behalf by the undersigned, duly authorized, as
of the
day and year first above written.
|
@.
|
|
|
Owner
|
|
|
By:_______________________________
|
|
|
Name:
|
|
|
Title:
|
|
|
XXXXX
FARGO BANK, N.A.
|
|
|
Servicer
|
|
|
By:_______________________________
|
|
|
Name:
|
|
|
Title:
|
72
Schedule
I
EXHIBIT
B
ASSIGNMENT,
ASSUMPTION AND RECOGNITION AGREEMENT
____________,
20__
ASSIGNMENT
AND ASSUMPTION, dated ___________________, 20__ among _________________,
a
_________________ corporation having an office at _________________ ("Assignor")
and _________________, having an office at _________________ ("Assignee")
and
Xxxxx Fargo Bank, N.A. (the “Servicer”), having an office at 0 Xxxx Xxxxxx, Xxx
Xxxxxx, XX 00000-0000:
For
and
in consideration of the sum of one dollar ($1.00) and other valuable
consideration the receipt and sufficiency of which are hereby acknowledge,
and
of the mutual covenants herein contained, the parties hereto hereby agree
as
follows:
1. The
Assignor hereby grants, transfers and assigns to Assignee all of the right,
title and interest of Assignor, as Owner, in, to and under that certain
Servicing Agreement, (the " Agreement"), dated as of _________________, by
and
between _________________ (the "Owner"), and _________________ (the "Servicer"),
and the Mortgage Loans delivered thereunder by the Servicer to the Assignor,
and
that certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Servicer, the Owner and _________________
(the "Custodian").
2. The
Assignor warrants and represents to, and covenants with, the Assignee
that:
a. The
Assignor is the lawful owner of the Mortgage Loans with the full right to
transfer the Mortgage Loans free from any and all claims and encumbrances
whatsoever;
b. The
Assignor has not received notice of, and has no knowledge of, any offsets,
counterclaims or other defenses available to the Servicer with respect to
the
Servicing Agreement or the Mortgage Loans;
c. The
Assignor has not waived or agreed to any waiver under, or agreed to any
amendment or other modification of, the Servicing Agreement, the Custodial
Agreement or the Mortgage Loans, including without limitation the transfer
of
the servicing obligations under the Servicing Agreement. The Assignor has
no
knowledge of, and has not received notice of, any waivers under or amendments
or
other modifications of, or assignments of rights or obligations under, the
Servicing Agreement or the Mortgage Loans; and
d. Neither
the Assignor nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accept
a transfer, pledge or other disposition of the Mortgage Loans, any interest
in
the Mortgage Loans or any other similar security from, or otherwise approached
or negotiated with respect to the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security with, any person in any manner, or made
any
general solicitation by means of general advertising or in any other manner,
or
taken any other action which would constitute a distribution of the Mortgage
Loans under the Securities Act of 1933 (the "33 Act") or which would render
the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act
or
require registration pursuant thereto.
3. That
Assignee warrants and represent to, and covenants with, the Assignor and
the
Servicer pursuant to Section 12.10 of the Servicing Agreement that:
a. The
Assignee agrees to be bound, as Owner, by all of the terms, covenants and
conditions of the Servicing Agreement, the Mortgage Loans and the Custodial
Agreement, and from and after the date hereof, the Assignee assumes for the
benefit of each of the Servicer and the Assignor all of the Assignor's
obligations as purchaser thereunder;
b. The
Assignee understands that the Mortgage Loans have not been registered under
the
33 Act or the securities laws of any state;
c. The
purchase price being paid by the Assignee for the Mortgage Loans are in excess
of $250,000.00 and will be paid by cash remittance of the full purchase price
within 60 days of the sale;
d. The
Assignee is acquiring the Mortgage Loans for investment for its own account
only
and not for any other person. In this connection, neither the Assignee nor
any
person authorized to act therefor has offered to sell the Mortgage Loans
by
means of any general advertising or general solicitation within the meaning
of
Rule 502(c) of US Securities and Exchange Commission Regulation D, promulgated
under the 1933 Act;
e. The
Assignee considers itself a substantial sophisticated institutional investor
having such knowledge and experience in financial and business matters that
it
is capable of evaluating the merits and risks of investment in the Mortgage
Loans;
f. The
Assignee has been furnished with all information regarding the Mortgage Loans
that it has requested from the Assignor or the Servicer;
g. Neither
the Assignee nor anyone acting on its behalf has offered, transferred, pledged,
sold or otherwise disposed of the Mortgage Loans, any interest in the Mortgage
Loans or any other similar security to, or solicited any offer to buy or
accepted a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest
in the
Mortgage Loans or any other similar security with, any person in any manner
which would constitute a distribution of the Mortgage Loans under the 33
Act or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the 33 Act or require registration pursuant thereto, nor will it act,
nor
has it authorized or will it authorize any person to act, in such manner
with
respect to the Mortgage Loans; and
h. Either
(1) the Assignee is not an employee benefit plan ("Plan") within the meaning
of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or a plan (also "Plan") within the meaning of section 4975(e)(1)
of
the Internal Revenue Code of 1986 ("Code"), and the Assignee is not directly
or
indirectly purchasing the Mortgage Loans on behalf of, investment manager
of, as
named fiduciary of, as Trustee of, or with assets of, a Plan; or (2) the
Assignee's purchase of the Mortgage Loans will not result in a prohibited
transaction under section 406 of ERISA or section 4975 of the Code.
i. The
Assignee's address for purposes of all notices and correspondence related
to the
Mortgage Loans and the Servicing Agreements is:
2
_________________________________________________
_________________________________________________
_________________________________________________
Attention:
_________________
The
Assignee's wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Servicing Agreement
is:
_________________________________________________
_________________________________________________
_________________________________________________
Attention:
_________________
4. From
and
after the date hereof, the Servicer shall note the transfer of the Mortgage
Loans to the Assignee in its books and records, the Servicer shall recognize
the
Assignee as the owner of the Mortgage Loans and the Servicer shall service
the
Mortgage Loans for the benefit of the Assignee pursuant to the Servicing
Agreement, the terms of which are incorporated herein by reference. It is
the
intention of the Assignor, the Servicer and the Assignee that the Servicing
Agreement shall be binding upon and inure to the benefit of the Servicer
and the
Assignee and their respective successors and assigns.
[Signatures
Follow]
3
IN
WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as
of the
date first above written.
| ______________________________________ | ______________________________________ |
|
Assignor
|
Assignee
|
|
By:
_________________________________________
|
By:
_________________________________________
|
|
Name:
_______________________________________
|
Name:
_______________________________________
|
|
Its:
_________________________________________
|
Its:
_________________________________________
|
|
Tax
Payer Identification No.:
|
Tax
Payer Identification No.:
|
| _______________________________________ | _______________________________________ |
|
XXXXX
FARGO BANK, N.A.
|
|
|
Servicer
|
|
|
By:
_________________________________________
|
|
|
Name:
_______________________________________
|
|
|
Its:
_________________________________________
|
4
Exhibit
C
Reserved
Exhibit
D
Reserved
EXHIBIT
E
FORMS
OF
CUSTODIAL ACCOUNT CERTIFICATION
CUSTODIAL
ACCOUNT CERTIFICATION
________________,
20__
Xxxxx
Fargo Bank, N.A. hereby certifies that it has established the account described
below as a Custodial Account pursuant to Section 4.04 of the Servicing
Agreement, dated as of ____________,
____________, 20__,.
|
Title
of Account:
|
Xxxxx
Fargo Bank, N.A. in trust for the Owner and/or subsequent purchasers
of
Mortgage Loans - P & I
|
|
Address
of office or branch
|
|
|
of
the Servicer at which
|
|
|
Account
is maintained:
|
________________________________ |
| ________________________________ | |
| ________________________________ | |
| ________________________________ | |
|
XXXXX FARGO BANK, N.A.
Servicer
|
|
| By: __________________________________ | |
| Name: ________________________________ | |
| Title: _________________________________ |
EXHIBIT
F
FORMS
OF
ESCROW ACCOUNT CERTIFICATION
ESCROW
ACCOUNT CERTIFICATION
________________,
20__
Xxxxx
Fargo Bank, N.A. hereby certifies that it has established the account described
below as an Escrow Account pursuant to Section 4.06 of the Servicing Agreement,
dated as of ____________,
20__,.
|
Title
of Account:
|
Xxxxx
Fargo Bank, N.A. in trust for the Owner and/or subsequent purchasers
of
Mortgage Loans, and various Mortgagors - T &
I
|
|
Address
of office or branch
|
|
|
of
the Servicer at which
|
|
|
Account
is maintained:
|
________________________________ |
| ________________________________ | |
| ________________________________ | |
| ________________________________ | |
|
XXXXX FARGO BANK, N.A.
Servicer
|
|
| By: __________________________________ | |
| Name: ________________________________ | |
| Title: _________________________________ |
FORM
OF
POWER OF ATTORNEY
When
Recorded Mail To:
Space
above this line for Recorders Use
LIMITED
POWER OF ATTORNEY
Name
of
Servicer (hereinafter called “Owner”) hereby appoints Xxxxx Fargo Bank, N.A.
(hereinafter called “Servicer”), as its true and lawful attorney-in-fact to act
in the name, place and stead of Owner for the purposes set forth below. This
limited power of attorney is given pursuant to a certain Servicing Agreement
and
solely with respect to the assets serviced pursuant to such agreement by
and
between Owner and Servicer dated Date of Agreement, to which reference is
made
for the definition of all capitalized terms herein.
The
said
attorneys-in-fact, and said person designated by the Servicer, as the
attorney-in-fact, is hereby authorized, and empowered, as
follows:
2
|
1.
|
To
execute, acknowledge, seal and deliver deed of trust/mortgage note
endorsements, lost note affidavits, assignments of deed of trust/mortgage
and other recorded documents, satisfactions/releases/reconveyances
of deed
of trust/mortgage, subordinations and modifications, tax authority
notifications and declarations, deeds, bills of sale, and other
instruments of sale, conveyance and transfer, appropriately completed,
with all ordinary or necessary endorsements, acknowledgements,
affidavits,
and supporting documents as may be necessary or appropriate to
effect its
execution, delivery, conveyance, recordation or filing.
|
|
2.
|
To
execute and deliver insurance filings and claims, affidavits of
debt,
substitutions of trustee, substitutions of counsel, non-military
affidavits, notices of rescission, foreclosure deeds, transfer
tax
affidavits, affidavits of merit, verifications of complaints, notices
to
quit, bankruptcy declarations for the purpose of filing motions
to lift
stays, and other documents or notice filings on behalf of Seller
in
connection with insurance, foreclosure, bankruptcy and eviction
actions.
|
|
3.
|
To
endorse any checks or other instruments received by Servicer with
respect
to assets serviced pursuant to the Servicing Agreement and made
payable to
Owner.
|
3
Dated:
Name
of
Servicer
_______________________________________
Witness: Name:
.____________________________
__________________________________
Title:
_____________________________
Name
& Title: ___________________________
Witness:
_____________________________
Name
& Title: ___________________________
State
of
County
of
Before
me, ______________________, a Notary Public in and for the jurisdiction
aforesaid, on this _____ day of ____________________, _______, personally
appeared ___________________________, who is personally known to me (or
sufficiently proven) to be a __________________________________ of
_______________________________ and the person who executed the foregoing
instrument by virtue of the authority vested in him/her and he/she did
acknowledge the signing of the foregoing instrument to be his/her free and
voluntary act and deed as a _________________________________ for the uses,
purposes and consideration therein set forth.
Witness
my hand and official seal this _____ day of _____________________,
_______.
____________________________________________
My
Commission Expires: ________________________
EXHIBIT
H
IN
ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by [the Company][Name of Subservicer]
shall address, as a minimum, the criteria identified below as “Applicable
Servicing Criteria”
|
Reg
AB
Reference
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
Inapplicable
Servicing
Criteria
|
|
General
Servicing Considerations
|
|||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
X
|
|
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance
with the
terms of the transaction agreements.
|
X
|
|
|
Cash
Collection and Administration
|
|||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial
bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities
related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their
original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
Investor
Remittances and Reporting
|
|||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission,
are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
X
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with
timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the
Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
|
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the
transaction
agreements or related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements
in the
transaction agreements.
|
X
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow)
in
accordance with the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period
a mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts): (A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid,
or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set
forth in
the transaction agreements.
|
X
|
EXHIBIT
I
SARBANES
CERTIFICATION
|
Re:
|
The
[ ] agreement dated as of [ ], 200[ ] (the “Agreement”), among [IDENTIFY
PARTIES]
|
I,
________________________________, the _______________________ of [Name of
Servicer] (the “Servicer”), certify to [the Owner], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers,
with
the knowledge and intent that they will rely upon this certification,
that:
(1) I
have
reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act
of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);
(2) Based
on
my knowledge, the Servicer Servicing Information, taken as a whole, does
not
contain any untrue statement of a material fact or omit to state a material
fact
necessary to make the statements made, in the light of the circumstances
under
which such statements were made, not misleading with respect to the period
of
time covered by the Servicer Servicing Information;
(3) Based
on
my knowledge, all of the Servicer Servicing Information required to be provided
by the Servicer under the Agreement has been provided to the [Depositor]
[Master
Servicer] [Securities Administrator] [Trustee];
(4) I
am
responsible for reviewing the activities performed by the Servicer under
the
Agreement, and based on my knowledge and the compliance review conducted
in
preparing the Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the Servicer
has
fulfilled its obligations under the Agreement; and
(5) The
Compliance Statement required to be delivered by the Servicer pursuant to
the
Agreement, and the Servicing Assessment and Attestation Report required to
be
provided by the Servicer and by each Subservicer ad Subcontractor pursuant
to
the Agreement have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
By:
______________________________
Name:____________________________
Title:_____________________________
EXECUTION
COPY
FIRST
ADDENDUM TO SERVICING AGREEMENT
THIS
FIRST ADDENDUM TO SERVICING AGREEMENT (the “First Addendum”) dated as of July
15, 2006, by and between HSBC BANK (USA), INC. (the “Owner”) and XXXXX FARGO
BANK, N.A. (the “Servicer”).
RECITALS
WHEREAS,
the Servicer will purchase certain Servicing Rights from the Owner pursuant
to
the Flow Servicing Rights Purchase and Sale Agreement dated as of June
30, 2006,
by and between the Owner and the Servicer (the “Purchase Agreement”), and the
Servicer will service the related Mortgage Loans on behalf of the Owner,
pursuant to that certain Servicing Agreement dated as of June 30, 2006,
by and
between the Owner and the Servicer (the “Servicing Agreement”).
WHEREAS,
the Owner and the Servicer wish to prescribe the remittance of funds under
the
Servicing Agreement with respect to Mortgage Loans designated as Actual/Actual
Mortgage Loans, as defined herein.
NOW
THEREFORE, in consideration of the mutual covenants and agreements herein
set
forth, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
Capitalized
Terms used in this First Addendum shall have the meanings assigned to them
under
the Servicing Agreement unless otherwise defined.
Actual/Actual
Mortgage Loan:
A
Mortgage Loan which is serviced on an actual/actual basis whereby the Servicer
is not required to advance principal and interest on such Mortgage Loan
and is
only required to remit amounts actually collected from the
Mortgagor.
Monthly
Accounting Cut-off Date:
With
respect to each Actual/Actual Mortgage Loan, the last calendar day of each
month
(or if such day is not a Business Day, the first Business Day
preceding).
Remittance
Date:
With
respect to Actual/Actual Mortgage Loans, the fifth (5th)
Business Day following the Monthly Accounting Cut-off Date.
Stated
Principal Balance:
With
respect to any Actual/Actual Mortgage Loan and as of any date of determination,
(i) the principal balance of such Mortgage Loan at the Cut-off Date, minus
(ii) all amounts previously distributed to the Owner with respect to the
related Mortgage Loan representing payments or recoveries of principal.
As to
any other Mortgage Loan and as of any date of determination, (i) the
principal balance of such Mortgage Loan after giving effect to payments
of
principal due on or before such date, whether or not received, minus
(ii) all amounts previously distributed to the Owner with respect to the
Mortgage Loan representing payments or recoveries of principal or advances
in
lieu thereof.
ARTICLE
II
SERVICING
OF MORTGAGE LOANS
Section
2.1 Designation
of Actual/Actual Mortgage Loans
The
Servicer shall service any Mortgage Loan as an Actual/Actual Mortgage Loan
either upon the Transfer Date of the Mortgage Loan if the Mortgage Loan
is not
subject to a Reconstitution Agreement, or upon notice from the Owner that
such
Mortgage Loan shall be an Actual/Actual Mortgage Loan; provided,
however,
such
notice shall be no later than the 5th
Business
Day prior to the last Business Day of the month.
Section
2.2 Outstanding
Monthly Advances
With
respect to any Actual/Actual Mortgage Loan, the Servicer’s obligation to make
Monthly Advances will no longer apply as of the date such Mortgage Loan
begins
to be serviced as an Actual/Actual Mortgage Loan. If a Mortgage Loan has
previously been serviced by the Servicer on a scheduled basis, upon conversion
of the Mortgage Loan to an Actual/Actual Mortgage Loan, the Owner shall
reimburse the Servicer for any outstanding Monthly Advances. The outstanding
Monthly Advances shall be withdrawn from the Custodial Account by the Servicer
on or prior to the next scheduled Remittance Date.
Section
2.3 Administration
and Servicing of Mortgage Loans
The
Servicer will service and administer the Actual/Actual Mortgage Loans in
accordance with the Servicing Agreement, amended as follows:
(a) Section
4.04(x) shall be inapplicable.
(b) Section
4.05(iii) shall be inapplicable.
(c) The
first
paragraph of Section 5.01, is hereby deleted and replaced with the following
with respect to Actual/Actual Mortgage Loans:
On
each
Remittance Date, the Servicer shall remit by wire transfer of immediately
available funds to the Owner (a) all payments of principal and interest
collected by the Servicer and deposited in the Custodial Account as of
the close
of business on the related Monthly Accounting Cut-off Date (reduced by
the
Servicing Fee and net of charges against or withdrawals from the Custodial
Account pursuant to Section 4.05).
2
(d) Section
5.02, is hereby deleted and replaced with the following with respect to
Actual/Actual Mortgage Loans:
Not
later
than the Remittance Date, the Servicer shall furnish to the Owner a monthly
remittance advice with a trial balance report attached thereto, as to the
remittance period ending on the last day of the preceding month in an electronic
format mutually agreed upon between the Owner and the Servicer.
(e) Section
5.03 shall be inapplicable.
ARTICLE
III
MISCELLANEOUS
Section
3.1 Term.
This
First Addendum shall be effective as of the date hereof, the respective
duties
of the Servicer created by this First Addendum shall terminate with respect
to a
related Mortgage Loan upon the final payment of all amounts due on the
Mortgage
Loan.
Section
3.2 Notices
All
demands, notices and communications related to the Mortgage Loans, the
Servicing
Agreement and this First Addendum shall be in writing and shall be deemed
to
have been duly given if personally delivered or mailed by registered mail,
postage prepaid, as follows:
| The Servicer: |
Xxxxx
Fargo Home Mortgage
|
0
Xxxx Xxxxxx
Xxx
Xxxxxx, XX 00000
Attention:
Xxxx X. Xxxxx, MAC X2302-033
With
a copy to:
Xxxxx
Fargo Home Mortgage
1
Home Campus
Xxx
Xxxxxx, XX 00000
Attention:
General Counsel, MAC X2401-06T
| The Owner: |
HSBC
Bank (USA), Inc.
|
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000
3
Attention:
Xxx Xxxxxxxxxx
Telecopy:
(000) 000-0000
Section
3.3 Governing
Law.
This
First Addendum shall be construed in accordance with the laws of the State
of
New York and the obligations, rights and remedies of the parties hereunder
shall
be determined in accordance with such laws.
Section
3.3 Counterparts.
This
First Addendum may be executed in any number of counterparts, each of which
shall be deemed an original and all of which together shall constitute
one and
the same instrument.
[Signatures
Follow]
4
IN
WITNESS WHEREOF, the parties hereto have executed this First Addendum to
Servicing Agreement as of the date first set forth above.
HSBC
BANK (USA) INC.
By:_________________________
Name:
______________________
Title:
_______________________
XXXXX
FARGO BANK, N.A.
By:_________________________
Name:
______________________
Title:
_______________________
5
EXHIBIT
D-1
FORM
OF MONTHLY REMITTANCE ADVICE
|
Column
Name
|
Description
|
Decimal
|
Format
Comment
|
Max
Size
|
|
SER_INVESTOR_NBR
|
A
value assigned by the Servicer to define a group of loans.
|
|
Text
up to 10 digits
|
20
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the investor.
|
|
Text
up to 10 digits
|
10
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR.
|
|
Text
up to 10 digits
|
10
|
|
BORROWER_NAME
|
The
borrower name as received in the file. It is not separated by first
and
last name.
|
|
Maximum
length of 30 (Last, First)
|
30
|
|
SCHED_PAY_AMT
|
Scheduled
monthly principal and scheduled interest payment that a borrower
is
expected to pay, P&I constant.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NOTE_INT_RATE
|
The
loan interest rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
NET_INT_RATE
|
The
loan gross interest rate less the service fee rate as reported by
the
Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_RATE
|
The
servicer's fee rate for a loan as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
SERV_FEE_AMT
|
The
servicer's fee amount for a loan as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_PAY_AMT
|
The
new loan payment amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NEW_LOAN_RATE
|
The
new loan rate as reported by the Servicer.
|
4
|
Max
length of 6
|
6
|
|
ARM_INDEX_RATE
|
The
index the Servicer is using to calculate a forecasted
rate.
|
4
|
Max
length of 6
|
6
|
|
ACTL_BEG_PRIN_BAL
|
The
borrower's actual principal balance at the beginning of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_END_PRIN_BAL
|
The
borrower's actual principal balance at the end of the processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date at the end of processing cycle that the borrower's next payment
is
due to the Servicer, as reported by Servicer.
|
|
MM/DD/YYYY
|
10
|
|
SERV_CURT_AMT_1
|
The
first curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_1
|
The
curtailment date associated with the first curtailment amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_1
|
The
curtailment interest on the first curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_2
|
The
second curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_2
|
The
curtailment date associated with the second curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_
AMT_2
|
The
curtailment interest on the second curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_AMT_3
|
The
third curtailment amount to be applied.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SERV_CURT_DATE_3
|
The
curtailment date associated with the third curtailment
amount.
|
|
MM/DD/YYYY
|
10
|
|
CURT_ADJ_AMT_3
|
The
curtailment interest on the third curtailment amount, if
applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_AMT
|
The
loan "paid in full" amount as reported by the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PIF_DATE
|
The
paid in full date as reported by the Servicer.
|
|
MM/DD/YYYY
|
10
|
|
|
|
|
Action
Code Key: 15=Bankruptcy, 00xXxxxxxxxxxx, , 00xXXX, 63=Substitution,
65=Repurchase,70=REO
|
2
|
|
ACTION_CODE
|
The
standard FNMA numeric code used to indicate the default/delinquent
status
of a particular loan.
|
|||
|
INT_ADJ_AMT
|
The
amount of the interest adjustment as reported by the
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SOLDIER_SAILOR_ADJ_AMT
|
The
Soldier and Sailor Adjustment amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
NON_ADV_LOAN_AMT
|
The
Non Recoverable Loan Amount, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
LOAN_LOSS_AMT
|
The
amount the Servicer is passing as a loss, if applicable.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_BEG_PRIN_BAL
|
The
scheduled outstanding principal amount due at the beginning of the
cycle
date to be passed through to investors.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_END_PRIN_BAL
|
The
scheduled principal balance due to investors at the end of a processing
cycle.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_PRIN_AMT
|
The
scheduled principal amount as reported by the Servicer for the current
cycle -- only applicable for Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
SCHED_NET_INT
|
The
scheduled gross interest amount less the service fee amount for the
current cycle as reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_PRIN_AMT
|
The
actual principal amount collected by the Servicer for the current
reporting cycle -- only applicable for Actual/Actual
Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
ACTL_NET_INT
|
The
actual gross interest amount less the service fee amount for the
current
reporting cycle as reported by the Servicer -- only applicable for
Actual/Actual Loans.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
AMT
|
The
penalty amount received when a borrower prepays on his loan as reported
by
the Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
PREPAY_PENALTY_
WAIVED
|
The
prepayment penalty amount for the loan waived by the
servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
|
|
|
|
|
|
|
MOD_DATE
|
The
Effective Payment Date of the Modification for the loan.
|
|
MM/DD/YYYY
|
10
|
|
MOD_TYPE
|
The
Modification Type.
|
|
Varchar
- value can be alpha or numeric
|
30
|
|
DELINQ_P&I_ADVANCE_AMT
|
The
current outstanding principal and interest advances made by
Servicer.
|
2
|
No
commas(,) or dollar signs ($)
|
11
|
EXHIBIT
D-2
STANDARD
LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
| Exhibit : Standard File Layout - Delinquency Reporting |
*The
column/header names in bold
are
the minimum fields Xxxxx Fargo must receive from every
Servicer
|
Column/Header
Name
|
Description
|
Decimal
|
Format
Comment
|
|
SERVICER_LOAN_NBR
|
A
unique number assigned to a loan by the Servicer. This may be different
than the LOAN_NBR
|
|
|
|
LOAN_NBR
|
A
unique identifier assigned to each loan by the originator.
|
|
|
|
CLIENT_NBR
|
Servicer
Client Number
|
||
|
SERV_INVESTOR_NBR
|
Contains
a unique number as assigned by an external servicer to identify a
group of
loans in their system.
|
|
|
|
BORROWER_FIRST_NAME
|
First
Name of the Borrower.
|
||
|
BORROWER_LAST_NAME
|
Last
name of the borrower.
|
||
|
PROP_ADDRESS
|
Street
Name and Number of Property
|
|
|
|
PROP_STATE
|
The
state where the property located.
|
|
|
|
PROP_ZIP
|
Zip
code where the property is located.
|
|
|
|
BORR_NEXT_PAY_DUE_DATE
|
The
date that the borrower's next payment is due to the servicer at the
end of
processing cycle, as reported by Servicer.
|
MM/DD/YYYY
|
|
|
LOAN_TYPE
|
Loan
Type (i.e. FHA, VA, Conv)
|
|
|
|
BANKRUPTCY_FILED_DATE
|
The
date a particular bankruptcy claim was filed.
|
MM/DD/YYYY
|
|
|
BANKRUPTCY_CHAPTER_CODE
|
The
chapter under which the bankruptcy was filed.
|
|
|
|
BANKRUPTCY_CASE_NBR
|
The
case number assigned by the court to the bankruptcy
filing.
|
|
|
|
POST_PETITION_DUE_DATE
|
The
payment due date once the bankruptcy has been approved by the
courts
|
MM/DD/YYYY
|
|
|
BANKRUPTCY_DCHRG_DISM_DATE
|
The
Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged
and/or a Motion For Relief Was Granted.
|
MM/DD/YYYY
|
|
|
LOSS_MIT_APPR_DATE
|
The
Date The Loss Mitigation Was Approved By The Servicer
|
MM/DD/YYYY
|
|
|
LOSS_MIT_TYPE
|
The
Type Of Loss Mitigation Approved For A Loan Such As;
|
||
|
LOSS_MIT_EST_COMP_DATE
|
The
Date The Loss Mitigation /Plan Is Scheduled To End/Close
|
MM/DD/YYYY
|
|
|
LOSS_MIT_ACT_COMP_DATE
|
The
Date The Loss Mitigation Is Actually Completed
|
MM/DD/YYYY
|
|
|
FRCLSR_APPROVED_DATE
|
The
date DA Admin sends a letter to the servicer with instructions to
begin
foreclosure proceedings.
|
MM/DD/YYYY
|
|
|
ATTORNEY_REFERRAL_DATE
|
Date
File Was Referred To Attorney to Pursue Foreclosure
|
MM/DD/YYYY
|
|
FIRST_LEGAL_DATE
|
Notice
of 1st legal filed by an Attorney in a Foreclosure Action
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_EXPECTED_DATE
|
The
date by which a foreclosure sale is expected to occur.
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_DATE
|
The
actual date of the foreclosure sale.
|
MM/DD/YYYY
|
|
|
FRCLSR_SALE_AMT
|
The
amount a property sold for at the foreclosure sale.
|
2
|
No
commas(,) or dollar signs ($)
|
|
EVICTION_START_DATE
|
The
date the servicer initiates eviction of the borrower.
|
MM/DD/YYYY
|
|
|
EVICTION_COMPLETED_DATE
|
The
date the court revokes legal possession of the property from the
borrower.
|
MM/DD/YYYY
|
|
|
LIST_PRICE
|
The
price at which an REO property is marketed.
|
2
|
No
commas(,) or dollar signs ($)
|
|
LIST_DATE
|
The
date an REO property is listed at a particular price.
|
MM/DD/YYYY
|
|
|
OFFER_AMT
|
The
dollar value of an offer for an REO property.
|
2
|
No
commas(,) or dollar signs ($)
|
|
OFFER_DATE_TIME
|
The
date an offer is received by DA Admin or by the Servicer.
|
MM/DD/YYYY
|
|
|
REO_CLOSING_DATE
|
The
date the REO sale of the property is scheduled to close.
|
MM/DD/YYYY
|
|
|
REO_ACTUAL_CLOSING_DATE
|
Actual
Date Of REO Sale
|
MM/DD/YYYY
|
|
|
OCCUPANT_CODE
|
Classification
of how the property is occupied.
|
|
|
|
PROP_CONDITION_CODE
|
A
code that indicates the condition of the property.
|
|
|
|
PROP_INSPECTION_DATE
|
The
date a property inspection is performed.
|
MM/DD/YYYY
|
|
|
APPRAISAL_DATE
|
The
date the appraisal was done.
|
MM/DD/YYYY
|
|
|
CURR_PROP_VAL
|
The
current "as is" value of the property based on brokers price opinion
or
appraisal.
|
2
|
|
|
REPAIRED_PROP_VAL
|
The
amount the property would be worth if repairs are completed pursuant
to a
broker's price opinion or appraisal.
|
2
|
|
|
If
applicable:
|
|
|
|
|
DELINQ_STATUS_CODE
|
FNMA
Code Describing Status of Loan
|
||
|
DELINQ_REASON_CODE
|
The
circumstances which caused a borrower to stop paying on a loan. Code
indicates the reason why the loan is in default for this
cycle.
|
||
|
MI_CLAIM_FILED_DATE
|
Date
Mortgage Insurance Claim Was Filed With Mortgage Insurance
Company.
|
MM/DD/YYYY
|
|
|
MI_CLAIM_AMT
|
Amount
of Mortgage Insurance Claim Filed
|
No
commas(,) or dollar signs ($)
|
|
|
MI_CLAIM_PAID_DATE
|
Date
Mortgage Insurance Company Disbursed Claim Payment
|
MM/DD/YYYY
|
|
|
MI_CLAIM_AMT_PAID
|
Amount
Mortgage Insurance Company Paid On Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_FILED_DATE
|
Date
Claim Was Filed With Pool Insurance Company
|
MM/DD/YYYY
|
|
POOL_CLAIM_AMT
|
Amount
of Claim Filed With Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
|
POOL_CLAIM_PAID_DATE
|
Date
Claim Was Settled and The Check Was Issued By The Pool
Insurer
|
MM/DD/YYYY
|
|
|
POOL_CLAIM_AMT_PAID
|
Amount
Paid On Claim By Pool Insurance Company
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_FILED_DATE
|
Date
FHA Part A Claim Was Filed With HUD
|
MM/DD/YYYY
|
|
|
FHA_PART_A_CLAIM_AMT
|
Amount
of FHA Part A Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_A_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part A Claim Payment
|
MM/DD/YYYY
|
|
|
FHA_PART_A_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part A Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_FILED_DATE
|
Date
FHA Part B Claim Was Filed With HUD
|
MM/DD/YYYY
|
|
|
FHA_PART_B_CLAIM_AMT
|
Amount
of FHA Part B Claim Filed
|
2
|
No
commas(,) or dollar signs ($)
|
|
FHA_PART_B_CLAIM_PAID_DATE
|
Date
HUD Disbursed Part B Claim Payment
|
MM/DD/YYYY
|
|
|
FHA_PART_B_CLAIM_PAID_AMT
|
Amount
HUD Paid on Part B Claim
|
2
|
No
commas(,) or dollar signs ($)
|
|
VA_CLAIM_FILED_DATE
|
Date
VA Claim Was Filed With the Veterans Admin
|
MM/DD/YYYY
|
|
|
VA_CLAIM_PAID_DATE
|
Date
Veterans Admin. Disbursed VA Claim Payment
|
MM/DD/YYYY
|
|
|
VA_CLAIM_PAID_AMT
|
Amount
Veterans Admin. Paid on VA Claim
|
2
|
No
commas(,) or dollar signs ($)
|
| Exhibit : Standard File Layout - Delinquency Reporting |
The
Loss
Mit Type
field
should show the approved Loss Mitigation Code as follows:
|
·
|
ASUM- | Approved Assumption |
|
·
|
BAP- | Borrower Assistance Program |
|
·
|
CO- | Charge Off |
|
·
|
DIL-
|
Deed-in-Lieu
|
|
·
|
FFA- | Formal Forbearance Agreement |
|
·
|
MOD- | Loan Modification |
|
·
|
PRE-
|
Pre-Sale
|
|
·
|
SS-
|
Short
Sale
|
|
·
|
MISC- | Anything else approved by the PMI or Pool Insurer |
NOTE:
Xxxxx
Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation
Types other than those above are used, the Servicer must supply Xxxxx Fargo
Bank
with a description of each of the Loss Mitigation Types prior to sending the
file.
The
Occupant
Code
field
should show the current status of the property code as follows:
|
·
|
Mortgagor
|
|
·
|
Tenant
|
|
·
|
Unknown
|
|
·
|
Vacant
|
The
Property
Condition
field
should show the last reported condition of the property as follows:
|
·
|
Damaged
|
|
·
|
Excellent
|
|
·
|
Fair
|
|
·
|
Gone
|
| · | Good |
| · | Poor |
| · | Special Hazard |
| · | Unknown |
| Exhibit : Standard File Layout - Delinquency Reporting |
The
FNMA
Delinquent Reason Code
field
should show the Reason for Delinquency as follows:
|
Delinquency
Code
|
Delinquency
Description
|
|
001
|
FNMA-Death
of principal mortgagor
|
|
002
|
FNMA-Illness
of principal mortgagor
|
|
003
|
FNMA-Illness
of mortgagor’s family member
|
|
004
|
FNMA-Death
of mortgagor’s family member
|
|
005
|
FNMA-Marital
difficulties
|
|
006
|
FNMA-Curtailment
of income
|
|
007
|
FNMA-Excessive
Obligation
|
|
008
|
FNMA-Abandonment
of property
|
|
009
|
FNMA-Distant
employee transfer
|
|
011
|
FNMA-Property
problem
|
|
012
|
FNMA-Inability
to sell property
|
|
013
|
FNMA-Inability
to rent property
|
|
014
|
FNMA-Military
Service
|
|
015
|
FNMA-Other
|
|
016
|
FNMA-Unemployment
|
|
017
|
FNMA-Business
failure
|
|
019
|
FNMA-Casualty
loss
|
|
022
|
FNMA-Energy
environment costs
|
|
023
|
FNMA-Servicing
problems
|
|
026
|
FNMA-Payment
adjustment
|
|
027
|
FNMA-Payment
dispute
|
|
029
|
FNMA-Transfer
of ownership pending
|
|
030
|
FNMA-Fraud
|
|
031
|
FNMA-Unable
to contact borrower
|
|
INC
|
FNMA-Incarceration
|
Exhibit
2: Standard
File Codes - Delinquency Reporting, Continued
The
FNMA
Delinquent Status Code
field
should show the Status of Default as follows:
|
Status
Code
|
Status
Description
|
|
09
|
Forbearance
|
|
17
|
Pre-foreclosure
Sale Closing Plan Accepted
|
|
24
|
Government
Seizure
|
|
26
|
Refinance
|
|
27
|
Assumption
|
|
28
|
Modification
|
|
29
|
Charge-Off
|
|
30
|
Third
Party Sale
|
|
31
|
Probate
|
|
32
|
Military
Indulgence
|
|
43
|
Foreclosure
Started
|
|
44
|
Deed-in-Lieu
Started
|
|
49
|
Assignment
Completed
|
|
61
|
Second
Lien Considerations
|
|
62
|
Veteran’s
Affairs-No Bid
|
|
63
|
Veteran’s
Affairs-Refund
|
|
64
|
Veteran’s
Affairs-Buydown
|
|
65
|
Chapter
7 Bankruptcy
|
|
66
|
Chapter
11 Bankruptcy
|
|
67
|
Chapter
13 Bankruptcy
|
EXHIBIT
D-3
FORM
OF LOAN LOSS REPORT
| Exhibit : Calculation of Realized Loss/Gain Form 332- Instruction Sheet |
NOTE:
Do not net or combine items. Show all expenses individually and all credits
as
separate line items. Claim packages are due on the remittance report date.
Late
submissions may result in claims not being passed until the following month.
The
Servicer is responsible to remit all funds pending loss approval and /or
resolution of any disputed items.
(a)
(b) The
numbers on the 332 form correspond with the numbers listed below.
Liquidation
and Acquisition Expenses:
|
1.
|
The
Actual Unpaid Principal Balance of the Mortgage Loan. For documentation,
an Amortization Schedule from date of default through liquidation
breaking
out the net interest and servicing fees advanced is
required.
|
|
2.
|
The
Total Interest Due less the aggregate amount of servicing fee that
would
have been earned if all delinquent payments had been made as agreed.
For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced
is
required.
|
|
3.
|
Accrued
Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage
Loan as calculated on a monthly basis. For documentation, an Amortization
Schedule from date of default through liquidation breaking out
the net
interest and servicing fees advanced is
required.
|
4-12. Complete
as applicable. Required documentation:
*
For
taxes and insurance advances - see page 2 of 332 form - breakdown required
showing period
of
coverage, base tax, interest, penalty. Advances prior to default require
evidence of servicer efforts to recover advances.
*
For
escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
*
Other
expenses - copies of corporate advance history showing all payments
*
REO
repairs > $1500 require explanation
*
REO
repairs >$3000 require evidence of at least 2 bids.
*
Short
Sale or Charge Off require P&L supporting the decision and
WFB’s approved Servicing Officer certification
*
Unusual
or extraordinary items may require further documentation.
13. The
total
of lines 1 through 12.
(c) Credits:
14-21. Complete
as applicable. Required documentation:
*
Copy of
the HUD 1 from the REO sale. If a 3rd
Party
Sale, bid instructions and Escrow
Agent / Attorney
Letter
of
Proceeds
Breakdown.
*
Copy of
EOB for any MI or gov't guarantee
*
All
other credits need to be clearly defined on the 332
form
|
22.
|
The
total of lines 14 through 21.
|
|
Please
Note:
|
For
HUD/VA loans, use line (18a) for Part A/Initial proceeds and line
(18b)
for Part B/Supplemental proceeds.
|
Total
Realized Loss (or Amount of Any Gain)
|
23.
|
The
total derived from subtracting line 22 from 13. If the amount
represents a
realized gain, show the amount in parenthesis (
).
|
| Exhibit 3A: Calculation of Realized Loss/Gain Form 332 |
Prepared
by: __________________ Date:
_______________
Phone:
______________________ Email Address:_____________________
|
Servicer
Loan No.
|
Servicer
Name
|
Servicer
Address
|
XXXXX
FARGO BANK, N.A. Loan No._____________________________
Borrower's
Name: _________________________________________________________
Property
Address: _________________________________________________________
Liquidation
Type: REO Sale
3rd
Party Sale Short
Sale
Charge
Off
Was
this loan granted a Bankruptcy deficiency or cramdown Yes No
If
“Yes”,
provide deficiency or cramdown amount
_______________________________
Liquidation
and Acquisition Expenses:
|
(1)
|
Actual
Unpaid Principal Balance of Mortgage Loan
|
$
______________
|
(1)
|
|
|
(2)
|
Interest
accrued at Net Rate
|
________________
|
(2)
|
|
|
(3)
|
Accrued
Servicing Fees
|
________________
|
(3)
|
|
|
(4)
|
Attorney's
Fees
|
________________
|
(4)
|
|
|
(5)
|
Taxes
(see page 2)
|
________________
|
(5)
|
|
|
(6)
|
Property
Maintenance
|
________________
|
(6)
|
|
|
(7)
|
MI/Hazard
Insurance Premiums (see page 2)
|
________________
|
(7)
|
|
|
(8)
|
Utility
Expenses
|
________________
|
(8)
|
|
|
(9)
|
Appraisal/BPO
|
________________
|
(9)
|
|
|
(10)
|
Property
Inspections
|
________________
|
(10)
|
|
|
(11)
|
FC
Costs/Other Legal Expenses
|
________________
|
(11)
|
|
|
(12)
|
Other
(itemize)
|
________________
|
(12)
|
|
|
Cash
for Keys__________________________
|
________________
|
(12)
|
||
|
HOA/Condo
Fees_______________________
|
________________
|
(12)
|
||
|
______________________________________
|
________________
|
(12)
|
||
|
Total
Expenses
|
$
_______________
|
(13)
|
||
|
Credits:
|
||||
|
(14)
|
Escrow
Balance
|
$
_______________
|
(14)
|
|
|
(15)
|
HIP
Refund
|
________________
|
(15)
|
|
|
(16)
|
Rental
Receipts
|
________________
|
(16)
|
|
|
(17)
|
Hazard
Loss Proceeds
|
________________
|
(17)
|
|
|
(18)
|
Primary
Mortgage Insurance / Gov’t Insurance
|
________________
|
(18a)
HUD Part A
|
|
|
________________
|
(18b) HUD Part B | |||
|
(19)
|
Pool
Insurance Proceeds
|
________________
|
(19)
|
|
|
(20)
|
Proceeds
from Sale of Acquired Property
|
________________
|
(20)
|
|
|
(21)
|
Other
(itemize)
|
________________
|
(21)
|
|
|
_________________________________________
|
________________
|
(21)
|
||
|
Total
Credits
|
$________________
|
(22)
|
||
|
Total
Realized Loss (or Amount of Gain)
|
$________________
|
(23)
|
||
Escrow
Disbursement Detail
|
Type
(Tax
/Ins.)
|
Date
Paid
|
Period
of Coverage
|
Total
Paid
|
Base
Amount
|
Penalties
|
Interest
|
EXHIBIT
E
SERVICING
CRITERIA TO BE ADDRESSED
IN
REPORT
ON ASSESSMENT OF COMPLIANCE
The
assessment of compliance to be delivered by Xxxxx Fargo Bank, N.A. shall
address, at a minimum, the criteria identified as below as “Applicable Servicing
Criteria”, as identified by a xxxx in the column titled “Applicable Servicing
Criteria”:
|
Regulation
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing Criteria
|
|
|
General
Servicing Considerations
|
|||
|
1122(d)(1)(i)
|
Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
|
X
|
|
|
1122(d)(1)(ii)
|
If
any material servicing activities are outsourced to third parties,
policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.
|
X
|
|
|
1122(d)(1)(iii)
|
Any
requirements in the transaction agreements to maintain a back-up
servicer
for the mortgage loans are maintained.
|
||
|
1122(d)(1)(iv)
|
A
fidelity bond and errors and omissions policy is in effect on the
party
participating in the servicing function throughout the reporting
period in
the amount of coverage required by and otherwise in accordance with
the
terms of the transaction agreements.
|
X
|
|
|
Cash
Collection and Administration
|
|||
|
1122(d)(2)(i)
|
Payments
on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business
days
following receipt, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(ii)
|
Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
|
X
|
|
|
1122(d)(2)(iii)
|
Advances
of funds or guarantees regarding collections, cash flows or distributions,
and any interest or other fees charged for such advances, are made,
reviewed and approved as specified in the transaction agreements.
|
X
|
|
|
1122(d)(2)(iv)
|
The
related accounts for the transaction, such as cash reserve accounts
or
accounts established as a form of overcollateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth
in the
transaction agreements.
|
X
|
|
|
1122(d)(2)(v)
|
Each
custodial account is maintained at a federally insured depository
institution as set forth in the transaction agreements. For purposes
of
this criterion, “federally insured depository institution” with respect to
a foreign financial institution means a foreign financial institution
that
meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
Act.
|
X
|
|
|
1122(d)(2)(vi)
|
Unissued
checks are safeguarded so as to prevent unauthorized access.
|
X
|
|
|
1122(d)(2)(vii)
|
Reconciliations
are prepared on a monthly basis for all asset-backed securities related
bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate;
(B)
prepared within 30 calendar days after the bank statement cutoff
date, or
such other number of days specified in the transaction agreements;
(C)
reviewed and approved by someone other than the person who prepared
the
reconciliation; and (D) contain explanations for reconciling items.
These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
Regulation
AB Reference |
Servicing
Criteria |
Applicable
Servicing Criteria
|
|
|
Investor
Remittances and Reporting
|
|||
|
1122(d)(3)(i)
|
Reports
to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared
in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with
the
terms specified in the transaction agreements; (C) are filed with
the
Commission as required by its rules and regulations; and (D) agree
with
investors’ or the trustee’s records as to the total unpaid principal
balance and number of mortgage loans serviced by the Servicer.
|
X
|
|
|
1122(d)(3)(ii)
|
Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
|
X
|
|
|
1122(d)(3)(iii)
|
Disbursements
made to an investor are posted within two business days to the Servicer’s
investor records, or such other number of days specified in the
transaction agreements.
|
X
|
|
|
1122(d)(3)(iv)
|
Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank statements.
|
X
|
|
|
Pool
Asset Administration
|
|||
|
1122(d)(4)(i)
|
Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(ii)
|
Mortgage
loan and related documents are safeguarded as required by the transaction
agreements
|
X
|
|
|
1122(d)(4)(iii)
|
Any
additions, removals or substitutions to the asset pool are made,
reviewed
and approved in accordance with any conditions or requirements in
the
transaction agreements.
|
X
|
|
|
1122(d)(4)(iv)
|
Payments
on mortgage loans, including any payoffs, made in accordance with
the
related mortgage loan documents are posted to the Servicer’s obligor
records maintained no more than two business days after receipt,
or such
other number of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(v)
|
The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal balance.
|
X
|
|
|
1122(d)(4)(vi)
|
Changes
with respect to the terms or status of an obligor's mortgage loans
(e.g.,
loan modifications or re-agings) are made, reviewed and approved
by
authorized personnel in accordance with the transaction agreements
and
related pool asset documents.
|
X
|
|
|
1122(d)(4)(vii)
|
Loss
mitigation or recovery actions (e.g., forbearance plans, modifications
and
deeds in lieu of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in accordance
with the
timeframes or other requirements established by the transaction
agreements.
|
X
|
|
|
1122(d)(4)(viii)
|
Records
documenting collection efforts are maintained during the period a
mortgage
loan is delinquent in accordance with the transaction agreements.
Such
records are maintained on at least a monthly basis, or such other
period
specified in the transaction agreements, and describe the entity’s
activities in monitoring delinquent mortgage loans including, for
example,
phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
|
X
|
|
|
Regulation
AB Reference
|
Servicing
Criteria
|
Applicable
Servicing
Criteria
|
|
|
1122(d)(4)(ix)
|
Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan documents.
|
X
|
|
|
1122(d)(4)(x)
|
Regarding
any funds held in trust for an obligor (such as escrow accounts):
(A) such
funds are analyzed, in accordance with the obligor’s mortgage loan
documents, on at least an annual basis, or such other period specified
in
the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are returned to the
obligor
within 30 calendar days of full repayment of the related mortgage
loans,
or such other number of days specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xi)
|
Payments
made on behalf of an obligor (such as tax or insurance payments)
are made
on or before the related penalty or expiration dates, as indicated
on the
appropriate bills or notices for such payments, provided that such
support
has been received by the servicer at least 30 calendar days prior
to these
dates, or such other number of days specified in the transaction
agreements.
|
X
|
|
|
Pool
Asset Administration cont.
|
|||
|
1122(d)(4)(xii)
|
Any
late payment penalties in connection with any payment to be made
on behalf
of an obligor are paid from the Servicer’s funds and not charged to the
obligor, unless the late payment was due to the obligor’s error or
omission.
|
X
|
|
|
1122(d)(4)(xiii)
|
Disbursements
made on behalf of an obligor are posted within two business days
to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.
|
X
|
|
|
1122(d)(4)(xiv)
|
Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
|
X
|
|
|
1122(d)(4)(xv)
|
Any
external enhancement or other support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation AB, is maintained as set forth
in
the transaction agreements.
|
||
EXHIBIT
F
EXHIBIT
J
TRANSACTION
PARTIES
Trustee:
Deutsche Bank National Trust Company
Securities
Administrator: Xxxxx Fargo Bank, N.A.
Master
Servicer: Xxxxx Fargo Bank, N.A.
Credit
Risk Manager: Office Tiger Global Real Estate Services Inc.
PMI
Insurer(s): N/A
Interest
Rate Swap Counterparty: Wachovia Bank, National Association
Interest
Rate Cap Counterparty: Wachovia Bank, National Association
Servicer(s):
Countrywide Home Loans Servicing LP and Xxxxx Fargo Bank, N.A.
Originator(s):
Accredited Home Lenders, Inc., Countrywide Home Loans, Inc., Decision One
Mortgage Company, LLC, National City Mortgage Co. and WMC Mortgage
Corp.
Custodian(s):
Xxxxx Fargo Bank, N.A.
Seller:
HSBC Bank USA, National Association
EXHIBIT
G
EXHIBIT
K
Xxxxx
Fargo Bank, N.A.’s
2006
Certification Regarding Compliance With Applicable Servicing
Criteria
Xxxxx
Fargo Bank, N.A. (“Xxxxx Fargo”) acknowledges the following material instances
of non-compliance with the applicable servicing criteria:
|
1.
|
1122(d)(3)(i)
- Delinquency Reporting
-
For certain loans sub-serviced by Xxxxx Fargo or for which servicing
rights were acquired on a bulk-acquisition basis, Xxxxx Fargo determined
that it provided incomplete data to some third parties who use such
data
to calculate delinquency ratios and determine the status of loans
with
respect to bankruptcy, foreclosure or real estate owned. The
incomplete reporting only affected securitizations that included
delinquent loans. Instead of the actual due date being provided for
use in
calculating delinquencies, the date of the first payment due to the
security was provided. Xxxxx Fargo subsequently included additional
data
in the monthly remittance reports, providing the actual borrower
due date
and unpaid principal balance, together with instructions to use these
new
fields if such monthly remittance reports are used to calculate
delinquency ratios.
|
|
2.
|
1122(d)(4)(vii)
- Notification of Intent to Foreclose
-
Xxxxx Fargo determined that, as required by certain servicing agreements,
it did not provide investors with prior notification of intent to
foreclose. While investors received monthly delinquency status reports
that listed loans in foreclosure, such reports were received after
such
loans had been referred to an attorney. A new process is being implemented
to send such notifications if contractually required, unless an investor
opts out in writing.
|
SCHEDULE
I-A
Xxxxx
Fargo Bank, N.A.
[To
be
retained in a separate closing binder entitled “HASCO 2007-HE2 Mortgage
Loan
Schedules”
at the Washington, DC offices of XxXxx Xxxxxx LLP]
