Exhibit 99.15b
EXECUTION COPY
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
Purchaser
and
XXXXX FARGO BANK, N.A.
Company
-----------------------------------------------
MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of April 1, 2006
-----------------------------------------------
Fixed Rate and Adjustable Rate Prime Mortgage Loans
TABLE OF CONTENTS
ARTICLE I.....................................................................1
DEFINITIONS...................................................................1
ARTICLE II...................................................................15
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS................15
ARTICLE III..................................................................21
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH...........................21
ARTICLE IV...................................................................40
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............................40
ARTICLE V....................................................................59
PAYMENTS TO PURCHASER........................................................59
ARTICLE VI...................................................................61
GENERAL SERVICING PROCEDURES.................................................61
ARTICLE VII..................................................................66
COMPANY TO COOPERATE.........................................................66
ARTICLE VIII.................................................................67
THE COMPANY..................................................................67
ARTICLE IX...................................................................69
AGENCY SALES, SECURITIZATION TRANSACTIONS OR WHOLE LOAN TRANSFERS............69
ARTICLE X....................................................................81
DEFAULT......................................................................81
ARTICLE XI...................................................................83
TERMINATION..................................................................83
ARTICLE XII..................................................................83
MISCELLANEOUS PROVISIONS.....................................................83
EXHIBITS
Exhibit A Form of Assignment and Conveyance
Agreement
Exhibit B Form of Assignment, Assumption and
Recognition Agreement
Exhibit C Form of Company Certification
Exhibit D Custodial Agreement
Exhibit E Data File
Exhibit F Contents of each Mortgage File
Exhibit G Form of Opinion of Counsel
Exhibit H Servicing Criteria to be addressed in the
Assessment of Compliance
Exhibit I Form of Sarbanes Certification
Exhibit J List of Xxxxxxx Mac Representations and
Warranties
Exhibit K Form of Indemnification Agreement
This is a Master Seller's Warranties and Servicing Agreement for
fixed rate and adjustable rate residential, first lien mortgage loans, dated
and effective as of April 1, 2006, and is executed between Xxxxxx Xxxxxxx
Mortgage Capital Inc. as purchaser (the "Purchaser"), and Xxxxx Fargo Bank,
N.A., as seller and servicer (the "Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Purchaser has agreed to purchase from the Company and
the Company has agreed to sell to the Purchaser from time to time (each a
"Transaction") on a servicing retained basis, certain first lien, fixed rate
and adjustable rate residential mortgage loans (the "Mortgage Loans") which
shall be delivered as whole loans (each a "Loan Package") on various dates
(each a "Closing Date") as provided for in certain Assignment and Conveyance
Agreements by and between the Purchaser and the Company as executed in
conjunction with each Transaction;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a one- to four-family first lien
on a residential dwelling located in the jurisdictions indicated on the
related Mortgage Loan Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner
of purchase of the Mortgage Loans and the conveyance, servicing and control of
the Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Company agree
as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
content otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those customary mortgage servicing practices 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.
Adjustable Rate Mortgage Loan: A Mortgage Loan that contains a
provision pursuant to which the Mortgage Interest Rate is adjusted
periodically.
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.
Affiliate: Any Person who directly or indirectly controls, is
controlled by, or is under direct or indirect common control with such person.
For the purposes of this definition, the term "control" when used with respect
to any Person means the power to direct the management and policies of such
Person directly or indirectly, whether thorough the ownership of voting
securities, by contract or otherwise.
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 Purchaser to an Agency which sale or transfer is not a
Securitization Transaction or Whole Loan Transfer.
Agreement: This Master Seller's Warranties and Servicing Agreement
and all exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i)
the value set forth on the appraisal made in connection with the origination
of the related Mortgage Loan as to the value of the related Mortgaged
Property, or (ii) the purchase price paid for the Mortgaged Property;
provided, however, that in the case of a refinanced Mortgage Loan, such value
shall be based solely on the appraisal made in connection with the origination
of such Mortgage Loan.
Assignment and Conveyance Agreement: The agreement substantially in
the form of Exhibit A attached hereto.
Assignment, Assumption and Recognition Agreement: The agreement
substantially in the form of Exhibit B attached 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 sale of the Mortgage to the Purchaser or its designated assignee,
or if the related Mortgage has been recorded in the name of MERS or its
designee, such actions as are necessary to cause the Purchaser to be shown as
the owner of the related Mortgage on the records of MERS for purposes of the
system or recording transfers of beneficial ownership of mortgages maintained
by MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, as assignment of the Mortgage Note and Pledge Agreement.
2
Assignment of Proprietary Lease: With respect to a Cooperative Loan,
as 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 State of Iowa,
the State of California, the State of Maryland, the State of South Carolina,
the State of Minnesota or the State of New York are authorized or obligated by
law or executive order to be closed.
Buydown Agreement: An agreement between the Company and a Mortgagor,
or an agreement among the Company, a Mortgagor and a seller of a Mortgaged
Property or a third party with respect to a Mortgage Loan which governs the
payment by such Mortgagor, seller or third party of, and 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, the Company 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.
Buydown Period: The period of time when a Buydown Agreement is in
effect with respect to a related Buydown Mortgage Loan.
Closing Date: The date or dates, set forth in the related Commitment
Letter, on which from time to time the Purchaser shall purchase and the
Company shall sell the Mortgage Loans listed on the respective Mortgage Loan
Schedule for each Transaction.
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 letter between the Purchaser to the
Company which sets forth, among other things, the Purchase Price for certain
Mortgage Loans described therein to be sold by the Company and purchased by
the Purchaser on the Closing Date set forth therein.
Company: Xxxxx Fargo Bank, N.A., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.
3
Company Certification: The certification delivered by the Company to
the Purchaser in the form substantially similar to Exhibit C of this
Agreement.
Company Information: As defined in Section 9.01(f)(i)(A).
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 Lien Search: A search for (a) federal tax liens,
mechanics' liens, lis pendens, judgments of record or otherwise against (i)
the Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the
Company if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of
financing statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative
Shares and a Proprietary Lease granting exclusive rights to occupy the related
Cooperative Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative,
owned by the Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to
the Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6c,
Appendix E, as revised from time to time and in effect on each related Closing
Date.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: That certain custodial agreement, dated as of
October 1, 2005, by and between the Purchaser, the Company and the Custodian,
a copy of which is annexed hereto as Exhibit D.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement as provided therein.
Cut-off Date: With respect to each Transaction, the first day of the
month in which the Closing Date occurs.
4
Data File: The electronic data file prepared by the Company and
delivered to the Purchaser, including the data fields set forth on Exhibit E
with respect to each Mortgage Loan, in relation to each Transaction.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the
Company in accordance with the terms of this Agreement and which is, in the
case of a substitution pursuant to Section 3.03, replaced or to be replaced
with a Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the
related Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace, as specified in the related
Mortgage Note.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month in which the
related Remittance Date occurs ending on the first day of the month in which
the related Remittance Date occurs.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, 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 Xxx: The Federal National Mortgage Association or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
5
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or any
successor thereto.
GNMA: The Government National Mortgage Association or any successor
thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which is added
to the Index in order to determine the related Mortgage Interest Rate, as set
forth in the respective Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, (b) a "high cost
home," "threshold," "covered,", "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law or (c) a Mortgage Loan
categorized as "High Cost" pursuant to the Standard & Poor's Glossary for File
Format for LEVELS(R) Version 5.6c, Appendix E, as revised from time to time
and in effect on each related Closing Date.
Incremental Interest: As to any Incremental Rate Mortgage Loan, the
amount of interest accrued on such Mortgage Loan attributable to the
Incremental Rate; provided, however, that with respect to any payment of
interest received in respect of such a Mortgage Loan (whether paid by the
Mortgagor or received as Liquidation Proceeds or otherwise) which is less than
the full amount of interest then due with respect to such Mortgage Loan, only
that portion of such payment of interest that bears the same relationship to
the total amount of such payment of interest as the Incremental Rate, if any,
in respect of such Mortgage Loan bears to the Mortgage Interest Rate shall be
allocated to the Incremental Interest with respect thereto.
Incremental Rate: For an Incremental Rate Mortgage Loan, the per
annum increase to the initial Mortgage Interest Rate set forth in the addendum
to the related Mortgage Note, which increase takes effect upon the occurrence
of certain specified conditions prior to the first Adjustment Date and remains
in effect until the first Adjustment Date.
Incremental Rate Mortgage Loan: A Mortgage Loan for which the related
Mortgage Note includes an addendum that allows for an increase to the initial
Mortgage Interest Rate upon the occurrence of certain specified conditions.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest thereon.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property, including, without limitation, LPMI Proceeds, if applicable.
Interest Only Mortgage Loan: A Mortgage Loan for which an
interest-only payment feature is allowed during the interest-only period set
forth in the related Mortgage Note.
6
Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI Policy
for which the Company pays all premiums from its own funds, without
reimbursement therefor.
Letter of Credit: With respect to a Pledged Asset Mortgage Loan, a
guaranty issued to the Company by the Pledge Holder for the Pledged Value
Amount.
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, sale of
REO property or otherwise, or the sale of the related Mortgaged Property if
the Mortgaged Property is acquired in satisfaction of the Mortgage Loan.
Loan Package: As defined in the Recitals of this Agreement.
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 Proceeds: Proceeds of any Lender Paid Mortgage Insurance Policy.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction document.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, the absolute maximum Mortgage Interest Rate set forth in the
related Mortgage Note.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any
successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number used to identify mortgage
loans registered under MERS.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, the absolute minimum Mortgage Interest Rate set forth in the
related Mortgage Note.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns.
7
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 that is required to be advanced by the Company pursuant to
Section 5.03.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan or in the case of an Interest Only Mortgage Loan,
payments of (i) interest, or (ii) principal and interest, as applicable, on a
Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note, or the Pledge Agreement
securing the Mortgage Note for a Cooperative Loan.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit F annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement or the Custodial
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 which is the subject of
this Agreement and identified on the respective Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage
Loan.
Mortgage Loan Documents: : With respect to a Mortgage Loan, the
documents listed as items 1 through 10 of Exhibit F attached hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest to be remitted to the Purchaser, which shall be
equal to the related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each Transaction, a schedule
of Mortgage Loans setting forth the following information with respect to each
Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city, state and
zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, planned unit development or
Cooperative Apartment or condominium; (4) the current Mortgage Interest Rate;
(5) the Servicing Fee Rate; (6) the current Monthly Payment; (7) the original
term to maturity; (8) the scheduled maturity date; (9) the principal balance
of the Mortgage Loan as of the Cut-off Date after deduction of payments of
principal due on or before the Cut-off Date whether or not collected; (10) the
Loan-to-Value Ratio; (11) the due date of the Mortgage Loan; (12) whether
8
the Mortgage Loan is convertible or not; (13) a code indicating the mortgage
guaranty insurance company; (14) with respect to each MERS Mortgage Loan, the
MIN; and (15) with respect to each Adjustable Rate Mortgage Loan, (a) the
first Adjustment Date and the Adjustment Date frequency; (b) the Gross Margin;
(c) the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(d) the Periodic Rate Cap; (e) the first Adjustment Date immediately following
the related Cut off Date; and (f) the Index.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the
related Cooperative Apartment.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or 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 Company,
and delivered to the Purchaser as required by this Agreement, a form of which
is attached hereto as Exhibit C.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each Adjustable Rate Mortgage Loan,
the maximum increase or decrease in the Mortgage Interest Rate on any
Adjustment Date pursuant to the terms of the Mortgage Note.
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 Account: With respect to a Pledged Asset Mortgage Loan, an
account that is managed by the Pledge Holder to secure a Letter of Credit.
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 Holder: With respect to a Pledged Asset Mortgage Loan, the
entity that holds the Pledge Account, manages the Pledge Account and provides
the Letter of Credit.
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.
9
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor
has pledged financial assets as partial collateral for the Mortgage Loan, in
lieu of a cash down payment.
Pledged Value Amount: With respect to a Pledged Asset Mortgage Loan,
a minimum of 20% of the lower of the Purchase Price or Appraised Value of a
Mortgaged Property.
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. The
premiums on a PMI Policy may be paid by the Mortgagor or by the Company from
its own funds, without reimbursement. If the premiums are paid by the Company,
the PMI Policy is an LPMI Policy.
Prepayment Penalty: Payments penalties, fees or charges calculated
pursuant to the Mortgage Note and due pursuant to the terms of the Mortgage
Loan as the result of a Principal Prepayment of the Mortgage Loan, not
otherwise due thereon in respect of principal or interest.
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: The calendar month preceding the month
in which the related Remittance Date occurs.
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 Price: The purchase price for each Loan Package shall be the
purchase price specified in the related Commitment Letter.
Purchaser: Xxxxxx Xxxxxxx Mortgage Capital Inc., or its successor in
interest or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company
and such Person that contemplated that such Person would underwrite mortgage
loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the
10
Company within one hundred eighty (180) days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Company in origination of mortgage loans of the same
type as the Mortgage Loans for the Company's own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Company on a consistent basis for use by lenders in originating
mortgage loans to be purchased by the Company; and (iv) the Company employed,
at the time such Mortgage Loans were acquired by the Company, pre-purchase or
post-purchase quality assurance procedures (which may involve, among other
things, review of a sample of mortgage loans purchased during a particular
time period or through particular channels) designed to ensure that Persons
from which it purchased mortgage loans properly applied the underwriting
criteria designated by the Company.
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 Purchaser by written notice to the Company)
at the time any deposits are held on deposit therein; provided, however, that
in the event any of the Mortgage Loans are subject to a Pass Through Transfer,
the Company agrees that the holding company or other entity which maintains
any accounts subject to this definition, shall satisfy the rating requirements
established by any Rating Agency which rates securities issued as part of the
Securitization Transaction.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Loan
Remittance Rate not less than, and not more than two percent (2%) greater,
than the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii)
have a remaining term to maturity not greater than and not more than one year
less than that of the Deleted Mortgage Loan; (iv) be of the same type as the
Deleted Mortgage Loan and (v) comply with each representation and warranty set
forth in Sections 3.01 and 3.02.
Rating Agency: Xxxxx'x Investors Service, Inc., Standard & Poor's
Ratings Group, a division of The XxXxxx-Xxxx Companies, Fitch, Inc. (doing
business as "Fitch Ratings"), or any other nationally recognized statistical
credit rating agency rating any security issued in connection with any
Securitization Transaction.
11
Reconstitution: Any Securitization Transaction, Agency Sale or Whole
Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties 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 Purchaser shall designate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.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 day (or if such 18th day is not a Business
Day, the immediately preceding Business Day) of any month.
Remittance Report Date: The 10th day (or if such 10th day is not a
Business Day, the immediately preceding Business Day) of any month.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf
of the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: Unless otherwise agreed by the Purchaser and the
Company (including without limitation as set forth in the related Commitment
Letter), a price equal to (i) the Stated Principal Balance of the Mortgage
Loan as of the date on which such repurchase takes place, plus (ii) interest
on such Stated Principal Balance at the Mortgage Loan Remittance Rate from the
date on which interest has last been paid and distributed to the Purchaser
through the last day of
12
the month in which such repurchase takes place, less amounts received or
advanced in respect of such repurchased Mortgage Loan which are being held in
the Custodial Account for distribution in the month of repurchase, plus (iii)
all costs and expenses incurred by the Purchaser arising out of or based upon
such breach, including without limitation costs and expenses incurred in the
enforcement of the Company's repurchase obligation hereunder.
Securities 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.
Servicemembers Civil Relief Act: The Servicemembers Civil Relief Act
of 2003 (50 U.S.C. App xx.xx. 501-596).
Servicer: As defined in Section 9.01(e)(iii).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, restoration and protection of the Mortgaged Property, (b)
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.08 (excluding the Company's obligation to pay the
premiums on LPMI Policies) and Section 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period
of one full month, be equal to one-twelfth of the product of (a) the Servicing
Fee Rate and (b) the unpaid 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 Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum percentage for each Mortgage Loan,
as stated in the related Commitment Letter.
13
Servicing File: With respect to each Mortgage Loan, the file retained
by the Company consisting of originals of all documents in the Mortgage File
which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in the Custodial Agreement the originals of which are
delivered to the Custodian pursuant to Section 2.03.
Servicing Officer: Any officer of the Company involved in or
responsible for the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan on the Cut-off Date (and thereafter the related
Due Date) after giving effect to payments of principal due on or before such
date, whether or not received, minus (ii) all amounts previously distributed
to the Purchaser with respect to the related Mortgage Loan representing
payments or recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
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 Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion
of the material servicing functions required to be performed by the Company
under this Agreement or any Reconstitution Agreement that are identified in
Item 1122(d) of Regulation AB.
Subsidy Account: An account maintained by the Company specifically to
hold all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed
by the employer of a Mortgagor in order to reduce the payments required from
the Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest
subsidy agreement pursuant to which the monthly interest payments made by the
related Mortgagor will be less than
14
the scheduled monthly interest payments on such Mortgage Loan, with the
resulting difference in interest payments being provided by the employer of
the Mortgagor. Each Subsidy Loan will be identified as such in the related
Data File.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company serviced loan with minimal documentation.
Underwriting Guidelines: The underwriting guidelines of the Company,
applicable to each Loan Package, as provided by the Company to the Purchaser.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is
not a Securitization Transaction or an Agency Sale.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
Pursuant to each Assignment and Conveyance Agreement, on the related
Closing Date, the Company, simultaneously with the payment of Purchase Price
by the Purchaser, shall thereby sell, transfer, assign, set over and convey to
the Purchaser, without recourse, but subject to the terms of this Agreement
and the related Assignment and Conveyance Agreement, all the right, title and
interest of the Company in and to the Mortgage Loans listed on the respective
Mortgage Loan Schedule annexed to such Assignment and Conveyance Agreement.
The Company shall deliver the related Mortgage Loan Schedule and the related
Data File to the Purchaser at least two (2) Business Days before the Closing
Date. Pursuant to Section 2.03, the Company shall deliver the Mortgage Loan
Documents for each Mortgage Loan comprising the related Loan Package to the
Custodian.
In addition to the documents delivered to the Custodian, the Company
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 Custodian. The possession of each Servicing File by the
Company is at the will of the Purchaser for the sole purpose of servicing the
related Mortgage Loan, and such retention and possession by the Company is in
a custodial capacity only. Upon the sale of the Mortgage Loans to the
Purchaser pursuant to the
15
Commitment Letter and this Agreement, the ownership of each Mortgage Note, the
related Mortgage and the related Mortgage File and Servicing File shall vest
immediately in the Purchaser, and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of the Company shall vest immediately in the Purchaser and shall be
retained and maintained by the Company, in trust, at the will of the Purchaser
and only in such custodial capacity. The Company shall release its custody of
the contents of any Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans or is in connection with a
repurchase or satisfaction of any Mortgage Loan pursuant to Section 3.03 or
6.02. All such costs associated with the release, transfer and re-delivery of
any Mortgage Files and Servicing Files between the parties shall be the
responsibility of the party in possession of such file or files.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Company agrees that it will cause the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Company to the Purchaser in
accordance with this Agreement by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this Agreement) in
such computer files the information required by the MERS(R) System to identify
the Purchaser as beneficial owner of such Mortgage Loans. Prior to the
assignment of any MERS Mortgage Loan, the Purchaser will provide the Company
with Purchaser's MERS registration number. The Company further agrees that it
will not alter the information referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser in the
related Loan Package on each Closing Date, all rights arising out of the
Mortgage Loans, including, but not limited to, all funds received on or in
connection with such Mortgage Loans, shall be received and held by the Company
in trust for the benefit of the Purchaser as owner of the Mortgage Loans, and
the Company 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.
The sale of each Mortgage Loan shall be reflected on the Company's
balance sheet and other financial statements as a sale of assets by the
Company. The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be
marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Company shall maintain in its possession,
available for inspection by the Purchaser, or its designee, and shall deliver
to the Purchaser upon demand, evidence of compliance with all federal, state
and local laws, rules and regulations, and requirements of Xxxxxx Xxx or
Xxxxxxx Mac, including but not limited to documentation as to the method(s)
used in determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to each Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by Xxxxxx Mae or Xxxxxxx Mac and records of periodic inspections as
required by Section 4.13. To the extent that original documents are not
16
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Company may be in the form of microfilm,
microfiche, optical imagery techniques or such other reliable means of
recreating original documents, so long as the Company complies with the
requirements of the Xxxxxx Mae or Xxxxxxx Mac Selling and Servicing Guide, as
amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and
shall make available for inspection by any purchaser or its designee the
related Servicing File during the time the Purchaser retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
The Company shall keep at its servicing office books and records in
which the Company shall note transfers of Mortgage Loans. No transfer of a
Mortgage Loan may be made unless such transfer is effected in compliance with
the terms hereof. For the purposes of this Agreement, the Company 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
Purchaser or subsequent owner of the Mortgage Loan. The Purchaser may, subject
to the terms of this Agreement, sell and transfer one or more of the Mortgage
Loans. The Purchaser also shall advise the Company of the transfer. Upon
receipt of notice of the transfer, the Company 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 Company 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 Company's duties
to remit and report as required by Section 5 shall begin with the next Due
Period.
Section 2.03 Custodial Agreement; Delivery of Documents.
On each Closing Date with respect to each Mortgage Loan comprising
the related Loan Package, the Company shall have delivered to the Custodian
not fewer than five (5) Business Days prior to such Closing Date those
Mortgage Loan Documents as required by Exhibit F to this Agreement with
respect to each Mortgage Loan.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to this Agreement, as evidenced by
the initial certification of the Custodian in the form annexed to the
Custodial Agreement. The Purchaser will be responsible for the fees and
expenses of the Custodian.
The Company shall forward to the Custodian 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
(1) week of their execution; provided, however, that the Company shall provide
the Custodian 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
17
public recording office to be a true and complete copy of the original within
sixty (60) days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, the Company shall deliver to the Custodian within two
hundred forty (240) 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
Company will be required to deliver the document to the Custodian by the date
specified in (iv) above. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the
Company immediately shall deliver to 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.
Upon the Company's receipt of the Purchase Price, the Company shall
provide notification to the Custodian to release the ownership of the Mortgage
Loan Documents specified above to the Purchaser. Such notification shall be in
a form of a written notice by facsimile or other electronic media, with a copy
sent to the Purchaser. Subsequent to such release, such Mortgage Loan
Documents shall be retained by the Custodian for the benefit of the Purchaser.
Section 2.04 Examination of Mortgage Files
Prior to the related Closing Date, the Company shall (a) deliver to
the Purchaser in escrow, for examination, the Mortgage File for each Mortgage
Loan, including a copy of the Assignment of Mortgage, pertaining to each
Mortgage Loan, or (b) make the Mortgage Files available to the Purchaser for
examination at the Company's offices or such other location as shall otherwise
be agreed upon by the Purchaser and the Company. Such examination may be made
by the Purchaser at any time before or after such Closing Date or by any
prospective purchaser of the Mortgage Loans from the Purchaser, at any time
after such Closing Date upon prior reasonable notice to the Company. The fact
that the Purchaser or any prospective purchaser of the Mortgage Loans has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided under
this Agreement.
Section 2.05 Representations, Warranties and Agreements of the Company
The Company agrees and acknowledges that it shall, as a condition to
the consummation of the transactions contemplated hereby, make the
representations and warranties specified in Sections 3.01 and 3.02 as of each
Closing Date. The Company, without conceding that the
18
Mortgage Loans are securities, hereby makes the following additional
representations, warranties and agreements which shall be deemed to have been
made as of the related Closing Date:
Neither the Company nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage
Loans, any interest in any Mortgage Loans or any other similar
security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of any Mortgage Loans, any interest in
any Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to any Mortgage Loans, any
interest in any 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 or which would render the disposition of any
Mortgage Loans a violation of Section 5 of the Securities 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.
Section 2.06 Representation, Warranties and Agreement of Purchaser.
The Purchaser, without conceding that the Mortgage Loans are
securities, hereby makes the following representations, warranties and
agreements, which shall have been deemed to have been made as of the related
Closing Date.
(i) the Purchaser understands that the Mortgage Loans have not been
registered under the Securities Act or the securities laws of
any state;
(ii) the Purchaser is acquiring the Mortgage Loans for its own
account only and not for any other person;
(iii) the Purchaser 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;
(iv) the Purchaser has been furnished with all information regarding
the Mortgage Loans which it has requested from the Company; and
(v) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any
Mortgage Loan, any interest in any Mortgage Loan or any other
similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security
from, or otherwise approached or negotiated with respect to any
Mortgage Loan, any interest in any Mortgage Loan 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
19
Act or which would render the disposition of any Mortgage Loan
a violation of Section 5 of the Securities 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.
Section 2.07 Closing.
The closing for the purchase and sale of each Loan Package, shall
take place on the related Closing Date. At the Purchaser's option, the closing
shall be either: by telephone, confirmed by letter or wire as the parties
shall agree; or conducted in person, at such place as the parties shall agree.
The closing shall be subject to each of the following conditions:
(i) all of the representations and warranties of the Company
under this Agreement shall be true and correct as of such
respective Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute
an Event of Default under this Agreement;
(ii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing
documents as specified in Section 2.08 of this Agreement, in
such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the respective terms
thereof;
(iii) the Company shall have delivered to the Custodian all
documents required pursuant to this Agreement; and
(iv) all other terms and conditions of this Agreement shall have
been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Company on such Closing Date the Purchase Price by wire transfer of
immediately available funds to the account designated by the Company and upon
the Company's receipt of such Purchase Price the Company shall release all
Mortgage Loan Documents pursuant to this Agreement.
Section 2.08 Closing Documents.
With respect to the initial Closing Date, the closing documents shall
consist of fully executed originals of the following documents:
(i) this Agreement, in two counterparts;
(ii) the Custodial Agreement, in three counterparts, attached as
Exhibit D to this Agreement;
20
(iii) the Mortgage Loan Schedule for the related Loan Package, one
copy to be attached to each counterpart of the related
Assignment and Conveyance Agreement, and to each counterpart
of the Custodial Agreement, as the Mortgage Loan Schedule
thereto;
(iv) a trust receipt and certification, as required under the
Custodial Agreement;
(v) a Company Certification;
(vi) an Opinion of Counsel of the Company, in the form of Exhibit
G hereto; and
(vii) an Assignment and Conveyance Agreement for the related
Mortgage Loans.
On each subsequent Closing Date, the following documents:
(i) the Mortgage Loan Schedule for the related Loan Package;
(ii) an Assignment and Conveyance Agreement of Mortgage Loans
for the related Loan Package; and
(iii) a trust receipt and certification, as required under the
Custodial Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as
of the related Closing Date:
(a) Due Organization and Authority.
The Company 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 Company, and in any
event the Company is in compliance with the laws of any such
state to the extent necessary to ensure the enforceability
of the related Mortgage Loan and the servicing of such
Mortgage Loan in accordance with the terms of this
Agreement; the Company has
21
the full power and authority to execute and deliver this
Agreement and to perform its obligations in accordance
herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences
the valid, binding and enforceable obligation of the
Company; and all requisite action has been taken by the
Company to make this Agreement valid and binding upon the
Company in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Company, which is in the business of selling and servicing
loans, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Company pursuant to
this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Company, the sale
of the Mortgage Loans to the Purchaser or the transactions
contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms,
articles of incorporation or by-laws or any legal
restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or
constitute a default or result in the violation of any law,
rule, regulation, order, judgment or decree to which the
Company or its property is subject, or impair the ability of
the Purchaser to realize on the Mortgage Loans, or impair
the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional
residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac,
with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Company is a HUD
approved mortgagee 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 Company unable to comply with Xxxxxx Mae or Xxxxxxx Mac
eligibility requirements or which would require notification
to either Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
22
The Company acknowledges and agrees that the Servicing Fee
represents reasonable compensation for servicing and
administering the Mortgage Loans and that the entire
Servicing Fee shall be treated by the Company, for
accounting and tax purposes, as compensation for the
servicing and administration of the Mortgage Loans pursuant
to this Agreement;
(f) Ability to Perform.
The Company does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Company is solvent
and the sale of the Mortgage Loans will not cause the
Company to become insolvent. The sale of the Mortgage Loans
is not undertaken to hinder, delay or defraud any of the
Company's creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation
pending or threatened against the Company which, either in
any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Company, or
in any material impairment of the right or ability of the
Company to carry on its business substantially as now
conducted, or in any material liability on the part of the
Company, or which would draw into question the validity of
this Agreement or the Mortgage Loans or of any action taken
or to be contemplated herein, or which would be likely to
impair materially the ability of the Company to perform
under the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by
the Company with this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such
approval has been obtained prior to the related Closing
Date;
(i) Selection Process.
The Mortgage Loans were selected from among the outstanding
fixed rate or adjustable rate one- to four-family mortgage
loans in the Company's mortgage banking portfolio at the
related Closing Date as to which the representations and
warranties set forth in Section 3.02 could be made and such
selection was not made in a manner so as to affect adversely
the interests of the Purchaser;
(j) No Untrue Information.
23
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;
(k) Sale Treatment.
The Company has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(l) No Material Change.
There has been no material adverse change in the business,
operations, financial condition or assets of the Company
since the date of the Company's most recent financial
statements;
(m) No Brokers' Fees.
The Company has not dealt with any broker, investment
banker, agent or other Person that may be entitled to any
commission or compensation in the connection with the sale
of the Mortgage Loans; and
(n) MERS Status.
The Company is a member of MERS in good standing.
Section 3.02 Representations and Warranties Regarding Individual
Mortgage Loans.
As to each Mortgage Loan, the Company hereby represents and warrants
to the Purchaser that as of the related Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the respective Mortgage Loan
Schedule and the information contained on the respective
Data File delivered to the Purchaser is true and correct;
(b) Payments Current.
All payments required to be made up to the Cut-off Date for
the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment under any Mortgage Loan
has been thirty (30) days delinquent more than one (1) time
within the twelve (12) months prior to the related Closing
Date;
(c) No Outstanding Charges.
24
There are no defaults in complying with the terms of the
Mortgage, and all taxes, governmental assessments, insurance
premiums, leasehold payments, water, sewer and municipal
charges, which previously became due and owing have been
paid, or an escrow of funds has been established in an
amount sufficient to pay for every such item which remains
unpaid and which has been assessed but is not yet due and
payable. The Company has not advanced funds, or induced, or
solicited directly or indirectly, the payment of any amount
required under the Mortgage Loan, except for interest
accruing from the date of the related Mortgage Note or date
of disbursement of the Mortgage Loan proceeds, whichever is
later, to the day which precedes by one month the Due Date
of the first installment of principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except
by a written instrument which has been recorded, if
necessary, to protect the interests of the Purchaser and
which has been delivered to the Custodian. The substance of
any such waiver, alteration or modification has been
approved by the issuer of any related PMI Policy or LPMI
Policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the respective
Mortgage Loan Schedule. No Mortgagor has been released, in
whole or in part, except in connection with an assumption
agreement approved by the issuer of any related PMI Policy
or LPMI Policy and the title insurer, to the extent required
by the policy, and which assumption agreement is part of the
Mortgage Loan Documents delivered to the Custodian and the
terms of which are reflected in the respective Mortgage Loan
Schedule;
(e) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without
limitation the defense of usury, nor will the operation of
any of the terms of the Mortgage Note or the Mortgage, or
the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the
defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect
thereto;
(f) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated
or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been
executed that
25
would effect any such satisfaction, release, cancellation,
subordination or rescission;
(g) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note and the Mortgage had
legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage, and
the Mortgage Note and the Mortgage have been duly and
properly executed by such parties.
With respect to each Cooperative Loan, the Mortgage Note,
the Mortgage, the Pledge Agreement, and related documents
are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance
with its terms. All parties to the Mortgage Note, the
Mortgage, the Pledge Agreement, the Proprietary Lease, the
Stock Power, Recognition Agreement and the Assignment of
Proprietary Lease had legal capacity to enter into the
Mortgage Loan and to execute and deliver such documents, and
such documents have been duly and properly executed by such
parties;
(h) No Fraud.
No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken
place on the part of the Company, or the Mortgagor, or to
the best of Company's knowledge, any appraiser, any builder,
or any developer, or any other party involved in the
origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan;
(i) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity, disclosure, or predatory and
abusive lending laws applicable to the Mortgage Loan have
been complied with. All inspections, licenses and
certificates required to be made or issued with respect to
all occupied portions of the Mortgaged Property and, with
respect to the use and occupancy of the same, including, but
not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from
the appropriate authorities;
(j) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in
the related Mortgage Loan Schedule and consists of a
contiguous parcel of real property with a
26
detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a
condominium project, or a Cooperative Apartment, or an
individual unit in a planned unit development or a townhouse,
provided, however, that any condominium project or planned unit
development shall conform to the requirements under the
Underwriting Guidelines of the Company regarding such
dwellings, and no residence or dwelling is a mobile home or
manufactured dwelling. As of the respective appraisal date for
each Mortgaged Property, no portion of the Mortgaged Property
was being used for commercial purposes outside of the
Underwriting Guidelines;
(k) Valid First Lien.
Each Mortgage Loan is a valid, subsisting and enforceable
first lien on the Mortgaged Property, including all
buildings on the Mortgaged Property and all installations
and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of
the Mortgage is subject only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public
record as of the date of recording acceptable to
mortgage lending institutions generally and
specifically referred to in the lender's title
insurance policy delivered to the originator of the
Mortgage Loan and (i) referred to or otherwise
considered in the appraisal made for the originator
of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the
benefits of the security intended to be provided by
the mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with each
Mortgage Loan establishes and creates a valid, subsisting
and enforceable first lien and first priority security
interest on the property described therein and the Company
has full right to sell and assign the same to the Purchaser.
With respect to each Cooperative Loan, each Pledge Agreement
creates a valid, enforceable and subsisting first security
interest in the Cooperative Shares and Proprietary Lease,
subject only to (i) the lien of the related Cooperative for
unpaid
27
assessments representing the Mortgagor's pro rata share of
the Cooperative's payments for its blanket mortgage, current
and future real property taxes, insurance premiums,
maintenance fees and other assessments to which like
collateral is commonly subject and (ii) other matters to
which like collateral is commonly subject which do not
materially interfere with the benefits of the security
intended to be provided by the Pledge Agreement; provided,
however, that the appurtenant Proprietary Lease may be
subordinated or otherwise subject to the lien of any
mortgage on the Project;
(l) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed,
except for escrows established or created due to seasonal
weather conditions, and there is no requirement for future
advances thereunder. All costs, fees and expenses incurred
in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to
any refund of any amounts paid or due under the Mortgage
Note or Mortgage;
(m) Consolidation of Future Advances.
Any future advances made prior to the Cut-off Date, have
been consolidated with the outstanding principal amount
secured by the Mortgage, and the secured principal amount,
as consolidated, bears a single interest rate and single
repayment term reflected on the related Mortgage Loan
Schedule. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first lien
priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Xxxxxx Mae or Xxxxxxx
Mac; the consolidated principal amount does not exceed the
original principal amount of the Mortgage Loan; the Company
shall not make future advances after the Cut-off Date;
(n) Ownership.
The Company is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage
are not assigned or pledged, and the Company has good and
marketable title thereto and has full right and authority to
transfer and sell the Mortgage Loan to the Purchaser. The
Company is transferring the Mortgage Loan free and clear of
any and all encumbrances, liens, pledges, equities,
participation interests, claims, charges or security
interests of any nature encumbering such Mortgage Loan;
(o) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit
union, an insurance company, or similar
28
institution that is supervised and examined by a federal
or state authority or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act. All
parties which have had any interest in the Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of
such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state
wherein the Mortgaged Property is located, and (2) either
(a) organized under the laws of such state, or (b) qualified
to do business in such state, or (c) federal savings and
loan associations or national banks having principal offices
in such state, or (d) not doing business in such state;
(p) LTV, PMI Policy; LPMI Policy.
Each Mortgage Loan has an LTV as specified on the related
Mortgage Loan Schedule. Except as indicated on such Mortgage
Loan Schedule, each Mortgage Loan with an LTV greater than
80%, at the time of origination, a portion of the unpaid
principal balance of the Mortgage Loan is and will be
insured as to payment defaults by a PMI Policy. 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 ss.4901, et seq. All
provisions of such PMI Policy or LPMI Policy have been and
are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. The
Qualified Insurer has a claims paying ability acceptable to
Xxxxxx Mae or Xxxxxxx Mac. Any Mortgage Loan subject to a
PMI Policy or LPMI Policy obligates the Mortgagor or the
Company thereunder to maintain the PMI Policy or LPMI
Policy, as applicable, and to pay all premiums and charges
in connection therewith. The Mortgage Interest Rate for the
Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any PMI Policy or LPMI Policy insurance
premium;
(q) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or in the case of any Mortgage Loan
secured by a Mortgaged Property located in a jurisdiction
where such policies are generally not available, an opinion
of counsel of the type customarily rendered in such
jurisdiction in lieu of title insurance) or other generally
acceptable form of policy of insurance acceptable to Xxxxxx
Mae or Xxxxxxx Mac, issued by a title insurer acceptable to
Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located,
insuring the Company, its successors and assigns, as to the
first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, subject only to the
exceptions contained in clauses (1), (2) and (3) of
Paragraph (k) of this Section 3.02, and against any loss by
reason of the invalidity or
29
unenforceability of the lien resulting from the provisions
of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. The Company is the sole
insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect
and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Company,
has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy;
(r) No Defaults.
There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage
Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of
acceleration, and neither the Company nor its predecessors
have waived any default, breach, violation or event of
acceleration;
(s) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such
liens) affecting the related Mortgaged Property which are or
may be liens prior to, or equal or coordinate with, the lien
of the related Mortgage which are not insured against by the
title insurance policy referenced in Paragraph (q) above;
(t) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy
referenced in Paragraph (q) above, all improvements which
were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property and no
improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part
of the Mortgaged Property is in violation of any applicable
zoning law or regulation;
(u) Payment Terms.
Except with respect to the Interest Only Mortgage Loans,
principal payments commenced no more than sixty (60) days
after the funds were disbursed to the Mortgagor in
connection with the Mortgage Loan. The Mortgage Loans have
an original term to maturity of not more than thirty (30)
years, with interest payable in arrears on the first day of
each month. As to each Adjustable Rate Mortgage Loan on each
applicable Adjustment Date, the Mortgage Interest Rate will
be adjusted to equal the sum of the Index plus the
applicable Gross Margin, rounded
30
up or down to the nearest multiple of 0.125% indicated by
the Mortgage Note; provided that the Mortgage Interest Rate
will not increase or decrease by more than the Periodic
Interest Rate Cap on any Adjustment Date, and will in no
event exceed the Maximum Mortgage Interest Rate or be lower
than the Minimum Mortgage Interest Rate listed on the
Mortgage Note for such Mortgage Loan. As to each Adjustable
Rate Mortgage Loan that is not an Interest Only Mortgage
Loan, each Mortgage Note requires a monthly payment which is
sufficient, during the period prior to the first adjustment
to the Mortgage Interest Rate, to fully amortize the
outstanding principal balance as of the first day of such
period over the then remaining term of such Mortgage Note
and to pay interest at the related Mortgage Interest Rate.
As to each Adjustable Rate Mortgage Loan, if the related
Mortgage Interest Rate changes on an Adjustment Date, the
then outstanding principal balance will be reamortized over
the remaining life of such Mortgage Loan. No Mortgage Loan
contains terms or provisions which would result in negative
amortization;
(v) Customary Provisions.
The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization
against the Mortgaged Property of the benefits of the
security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale,
and (ii) otherwise by judicial foreclosure. There is no
homestead or other exemption available to a Mortgagor which
would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the
Mortgage;
(w) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was
lawfully occupied under applicable law;
(x) No Additional Collateral.
Except in the case of a Pledged Asset Mortgage Loan and as
indicated on the related Data File, the Mortgage Note is not
and has not been secured by any collateral, pledged account
or other security except the lien of the corresponding
Mortgage and the security interest of any applicable
security agreement or chattel mortgage referred to in
Paragraphs (k);
(y) Deeds of Trust.
In the event that the Mortgage is a deed of trust, a
trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves
and is named in the Mortgage, and no fees or expenses are or
will become
31
payable by the Mortgagee to the trustee under the deed of
trust, except in connection with a trustee's sale after
default by the Mortgagor;
(z) Acceptable Investment.
The Company has no knowledge of any circumstances or
conditions with respect to the Mortgage Loan, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing
that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability
of the Mortgage Loan;
(aa) Transfer of Mortgage Loans.
As to any Mortgage Loan which is not a MERS Mortgage Loan,
the Assignment of Mortgage, upon the insertion of the name
of the assignee and recording information, is in recordable
form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(bb) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or
other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the
use for which the premises were intended;
(cc) Servicing and Collection Practices; Escrow Deposits.
The origination, servicing and collection practices used
with respect to the Mortgage Loan have been in accordance
with Accepted Servicing Practices, and have been in all
material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the
possession of the Company and there exist no deficiencies in
connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments
have been collected in full compliance with state and
federal law. No escrow deposits or Escrow Payments or other
charges or payments due the Company have been capitalized
under the Mortgage Note;
(dd) No Condemnation.
There is no proceeding pending or to the best of the
Company's knowledge threatened for the total or partial
condemnation of the related Mortgaged Property;
(ee) The Appraisal.
32
The Servicing File includes an appraisal of the related
Mortgaged Property. As to each Time$aver(R) Mortgage Loan,
the appraisal may be from the original of the existing
Company-serviced loan, which was refinanced via such
Time$aver(R) Mortgage Loan. The appraisal was conducted by
an appraiser who had no interest, direct or indirect, in the
Mortgaged Property or in any loan made on the security
thereof; and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the
appraisal and the appraiser both satisfy the applicable
requirements of Title XI of the Financial Institution
Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated;
(ff) Insurance.
The Mortgaged Property securing each Mortgage Loan is
insured by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx
Mac against loss by fire and such hazards as are covered
under a standard extended coverage endorsement and such
other hazards as are customary in the area where the
Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Section 4.10, 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 securing such Mortgage Loan and (ii) the
greater of either (a) the outstanding principal balance of
the Mortgage Loan or (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. If the Mortgaged
Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the project. If
the improvements on the Mortgaged Property are in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, 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, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Loan, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act of 1973, as amended. All individual insurance
policies contain a standard mortgagee clause naming the
Company and its successors and assigns as mortgagee, and all
premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain a hazard insurance policy
at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost
and expense, and to seek reimbursement therefor from the
Mortgagor. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and
effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Company has
not acted so as to impair or failed to act to avoid
impairment of the coverage of any such insurance policy or
the validity, binding effect and enforceability thereof;
33
(gg) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company
has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act, as
amended or other similar state statute;
(hh) Balloon Payments, Graduated Payments or Contingent Interests.
The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or
other contingent interest feature. Except as indicated on
the related Mortgage Loan Schedule, no Mortgage Loan has a
balloon payment feature;
(ii) Construction Loans.
No Mortgage Loan was made in connection with (i) the
construction or rehabilitation of a Mortgaged Property or
(ii) facilitating the trade-in or exchange of a Mortgaged
Property other than a construction-to-permanent loan which
has converted to a permanent Mortgage Loan;
(jj) Underwriting.
Each Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines of the Company; and the Mortgage
Note and Mortgage are on forms acceptable to Xxxxxxx Mac or
Xxxxxx Mae;
(kk) Bankruptcy.
To the best of the Company's knowledge, no Mortgagor was a
debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated and
as of the related Closing Date and to the best of Company's
knowledge, the Company has not received notice that any
Mortgagor is a debtor under any state or federal bankruptcy
or insolvency proceeding;
(ll) Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage
Loan, has fully furnished, 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;
(mm) Violation of Environmental Laws.
34
To the best of the Company's knowledge, there is no pending
action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any
environmental law, rule or regulation with respect to the
Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule
or regulation constituting a prerequisite to use and
enjoyment of said property;
(nn) HOEPA.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(oo) Single-Premium Credit Life Insurance.
No Mortgagor was required to purchase any single premium
credit insurance policy (e.g. life, disability, accident,
unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the
Mortgage Loan. No Mortgagor obtained a prepaid single
premium credit insurance policy (e.g. life, disability,
accident, unemployment or health insurance product) as part
of the origination of the Mortgage Loan. No proceeds from
any Mortgage Loan were used to purchase single premium
credit insurance policies or debt cancellation agreements as
part of the origination of, or as a condition to closing,
such Mortgage Loan;
(pp) Delivery of Mortgage Files.
The Mortgage Loan Documents and any other documents required
to be delivered by the Company under this Agreement for the
Mortgage Loans have been delivered to the Custodian (except
for those submitted for recordation). The Company is in
possession of a complete, true and accurate Mortgage File in
compliance with Exhibit F, except for such documents the
originals of which have been delivered to the Custodian or
submitted for recordation;
(qq) Pledged Assets.
Except as indicated on the related Mortgage Loan Schedule,
no Mortgage Loan is subject to the Company's pledged asset
program;
(rr) Prepayment Penalty Term.
No Mortgage Loan has a Prepayment Penalty feature;
(ss) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown
Mortgage Loan:
35
(i) On or before the date of origination of such Mortgage
Loan, the Company and the Mortgagor, or the Company,
the Mortgagor and the seller of the Mortgaged Property
or a third party entered into a Buydown Agreement. The
Buydown Agreement provides that the seller of the
Mortgaged Property (or another third party) shall
deliver to the Company temporary 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 each Due
Date in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly
Payment due on such Mortgage Loan. The effective
interest rate of a Buydown Mortgage Loan, if less than
the interest rate set forth in the related Mortgage
Note, will increase within the Buydown Period as
provided in the related Buydown Agreement so that at
the end of such Buydown Period the effective interest
rate will be equal to the interest rate as set forth in
the related Mortgage Note. The Buydown Mortgage Loan
satisfies the requirements of Xxxxxx Xxx or Xxxxxxx Mac
guidelines or the Underwriting Guidelines;
(ii) The Mortgage and Mortgage Note reflect the permanent
payment terms rather than the payment terms of the
Buydown Agreement. The Buydown Agreement provides for
the payment by the Mortgagor of the full amount of the
Monthly Payment on any Due Date that the Buydown Funds
are available. The Buydown Funds were not used to
reduce the original principal balance of the Mortgage
Loan or to increase the Appraised Value of the
Mortgaged Property when calculating the Loan-to-Value
Ratios for purposes of the Agreement and, if the
Buydown Funds were provided by the Company and if
required under Xxxxxx Mae or Xxxxxxx Mac guidelines or
Underwriting Guidelines, the terms of the Buydown
Agreement were disclosed to the appraiser of the
Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the
Mortgagor unless the Mortgagor makes a principal
payment of the outstanding balance of and all other
amounts due or accrued under the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan,
the provisions of the related Buydown Agreement
complied with the requirements of Xxxxxx Mae or
Xxxxxxx Mac guidelines or Underwriting Guidelines
regarding buydown agreements;
(tt) Interest Calculation.
Interest on each Mortgage Loan is calculated on the basis of
a three hundred sixty (360)-day year consisting of twelve
(12) thirty (30)-day months;
36
(uu) Due on Sale.
The Mortgage or Mortgage Note contains an enforceable
provision, to the extent not prohibited by federal law, for
the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan in the event that the Mortgaged
Property is sold or transferred without the prior written
consent of the Mortgagee thereunder;
(vv) No Arbitration.
No borrower with respect to any Mortgage Loan originated on
or after August 1, 2004, agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to
the Mortgage Loan transaction;
(ww) Cooperative Loans.
With respect to each Cooperative Loan
(i) The Cooperative Shares are held by a Person as a
tenant-stockholder in a Cooperative. Each original UCC
financing statement, continuation statement or other
governmental filing or recordation necessary to create
or preserve the perfection and priority of the first
lien and security interest in the Cooperative Loan and
Proprietary Lease has been timely and properly made.
Any security agreement, chattel mortgage or equivalent
document related to the Cooperative Loan and delivered
to Purchaser or its designee establishes in Purchaser
a valid and subsisting perfected first lien on and
security interest in the Mortgaged Property described
therein, and Purchaser has full right to sell and
assign the same. The Proprietary Lease term expires no
less than five years after the Mortgage Loan term or
such other term acceptable to Xxxxxx Mae or Xxxxxxx
Mac;
(ii) A Cooperative Lien Search has been made by a
company competent to make the same which company is
acceptable to Xxxxxx Mae and qualified to do
business in the jurisdiction where the Cooperative
is located;
(iii) (a) The term of the related Proprietary Lease is not
less than the terms of the Cooperative Loan; (b) there
is no provision in any Proprietary Lease which
requires the Mortgagor to offer for sale the
Cooperative Shares owned by such Mortgagor first to
the Cooperative; (c) there is no prohibition in any
Proprietary Lease against pledging the Cooperative
Shares or assigning the Proprietary Lease; (d) the
Cooperative has been created and exists in full
compliance with the requirements for residential
cooperatives in the jurisdiction in which the Project
is located and qualifies as a cooperative housing
corporation under Section 210 of the Code; (e) the
Recognition Agreement is on a form published by Aztech
37
Document Services, Inc. or includes similar
provisions; and (f) the Cooperative has good and
marketable title to the Project, and owns the Project
either in fee simple or under a leasehold that
complies with the requirements of the Xxxxxx Xxx
Guidelines; such title is free and clear of any
adverse liens or encumbrances, except the lien of any
blanket mortgage;
(iv) The Company has the right under the terms of the
Mortgage Note, Pledge Agreement and Recognition
Agreement to pay any maintenance charges or
assessments owed by the Mortgagor; and
(v) Each Stock Power (i) has all signatures guaranteed or
(ii) if all signatures are not guaranteed, then such
Cooperative Shares will be transferred by the stock
transfer agent of the Cooperative if the Company
undertakes to convert the ownership of the collateral
securing the related Cooperative Loan;
(xx) Georgia.
There is no Mortgage Loan that was originated on or after
October 1, 2002 and before March 7, 2003, which is secured
by property located in the State of Georgia. There is no
Mortgage Loan that was originated on or after March 7, 2003,
which is a "high cost home loan" as defined under the
Georgia Fair Lending Act; and
(yy) Indiana.
There is no Mortgage Loan that was originated on or after
January 1, 2005, which is a "high cost home loan" as defined
under the Indiana Home Loan Practices Act (I.C. 24-9).
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage
Loans to the Purchaser and the delivery of the related Mortgage Loan Documents
to the Custodian and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by either the Company or the Purchaser of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other.
38
Within ninety (90) days of the earlier of either discovery by or
notice to the Company of any breach of a representation or warranty which
materially and adversely affects the value of the Mortgage Loans or any
individual Mortgage Loan, the Company shall use its best efforts promptly to
cure such breach in all material respects and, if such breach cannot be cured,
the Company shall, at the Purchaser's option, repurchase such Mortgage Loan at
the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Section 3.01, and such breach cannot
be cured within ninety (90) days of the earlier of either discovery by or
notice to the Company of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Company at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Section 3.02 and the Company discovers or receives notice of any such breach
within one hundred twenty (120) days of the Closing Date, the Company shall,
if the breach cannot be cured, at the Purchaser's option and provided that the
Company has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage
Loan or Loans, provided that any such substitution shall be effected not later
than one hundred twenty (120) days after the Closing Date. If the Company has
no Qualified Substitute Mortgage Loan(s), it shall repurchase the deficient
Mortgage Loan within ninety (90) days of the written notice of the breach. Any
repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of
this Section 3.03 shall be accomplished by deposit in the Custodial Account of
the amount of the Repurchase Price for distribution to Purchaser on the
Remittance Date immediately following the Principal Repayment Period in which
such Repurchase Price is received, after deducting therefrom any amount
received in respect of such repurchased Mortgage Loan or Loans and being held
in the Custodial Account for future distribution.
If pursuant to the foregoing provisions the Company repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Company shall either (i) cause
MERS to execute and deliver an assignment of the Mortgage in recordable form
to transfer the Mortgage from MERS to the Company on behalf of the Purchaser
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations or (ii) cause MERS to
designate on the MERS(R) System the Company as the beneficial holder with
respect to such Mortgage Loan.
At the time of repurchase or substitution, the Purchaser and the
Company shall arrange for the reassignment of the Deleted Mortgage Loan to the
Company and the delivery to the Company of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Company shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the related Mortgage Loan Schedule to reflect the withdrawal of
the Deleted Mortgage Loan from this Agreement, and, in the case of
substitution, identify a Qualified Substitute Mortgage Loan and amend the
related Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, the Company shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in
this Agreement shall be deemed made as of the date of such substitution.
39
The Company shall effect such substitution by delivering to the Custodian
for such Qualified Substitute Mortgage Loan the documents required by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03.
Any substitution will be made as of the first day of the Due Period
beginning in the month in which such substitution occurs. Accordingly,
Monthly Payments due with respect to Qualified Substitute Mortgage Loans
in the month of substitution shall be retained by the Company and the
Company shall deposit in the Custodial Account the Monthly Payment less
the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans
in the month following the date of such substitution. With respect to any
Deleted Mortgage Loan, distributions to Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of
substitution, and the Company shall thereafter be entitled to retain all
amounts subsequently received by the Company in respect of such Deleted
Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be paid by the Company to the Purchaser in
the month of substitution pursuant to Section 5.01. Accordingly, on the date
of such substitution, the Company shall deposit from its own funds into the
Custodial Account an amount equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the
Company shall indemnify the Purchaser 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 representations and warranties contained in this
Agreement. It is understood and agreed that the obligations of the Company set
forth in this Section 3.03 to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Section 3.03
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Company relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Company to the Purchaser, (ii) failures
by the Company to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Company by the Purchaser for
compliance with this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
40
The Company, 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 Subcontractor or Subservicer, as
applicable, to do any and all things in connection with such servicing and
administration which the Company may deem necessary or desirable, consistent
with the terms of this Agreement, with Accepted Servicing Practices and, in
the case of any Mortgage Loan transferred to a REMIC, with the REMIC
Provisions. The Company shall be responsible for any and all acts of a
Subcontractor or Subservicer, as applicable, and the Company's utilization of
a Subcontractor or Subservicer, as applicable, shall in no way relieve the
liability of the Company under this Agreement.
Consistent with the terms of this Agreement and subject to the REMIC
Provisions if the Mortgage Loans have been transferred to a REMIC, the Company
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Company's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that the Company shall
not make any future advances, other than Servicing Advances, with respect to a
Mortgage Loan. The Company shall not permit any modification of any Mortgage
Loan that would change the Mortgage Interest Rate, defer or forgive the
payment of any principal or interest payments, reduce the outstanding
principal amount (except for actual payments of principal) or change the
maturity date on such Mortgage Loan, unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the reasonable judgment of
the Company, imminent. In the event that no default exists or is imminent, the
Company shall request written consent from the Purchaser to permit such a
modification and the Purchaser shall provide written consent or notify the
Company of its objection to such modification within three (3) Business Days
of its receipt of the Company's request. In the event of any such modification
which permits the deferral of interest or principal payments on any Mortgage
Loan, the Company shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment
has been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 5.03, the difference between (a) such month's
principal and one month's interest at the Mortgage Loan Remittance Rate on the
unpaid principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Company shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 5.03.
Without limiting the generality of the foregoing, the Company shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself and the Purchaser, all instruments of satisfaction or cancellation, or
of partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged
Properties when required, consistent with the foregoing restrictions. If
reasonably required by the Company, the Purchaser shall furnish the Company
with any powers of attorney and other documents necessary or appropriate to
enable the Company to carry out its servicing and administrative duties under
this Agreement.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily
41
employs and exercises in servicing and administering mortgage loans for
its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this
Agreement, and the Purchaser's reliance on the Company.
The Company is authorized and empowered by the Purchaser, in its own
name, when the Company believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from
the registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Purchaser, 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 Purchaser and its
successors and assigns. The Company will comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the MERS
Mortgage Loans for as long as such Mortgage Loans are registered with MERS.
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 that the Mortgagor fails to perform any other
covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Company shall take such action as (1)
the Company would take under similar circumstances with respect to a similar
mortgage loan held for its own account for investment, (2) shall be consistent
with Accepted Servicing Practices, (3) the Company shall determine prudently
to be in the best interest of Purchaser, and (4) is consistent with any
related PMI Policy or LPMI Policy. 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 ninety (90) days or any other default continues for a period
of ninety (90) days beyond the expiration of any grace or cure period, the
Company shall commence foreclosure proceedings. In the event the Purchaser
objects to such foreclosure action, the Company shall not be required to make
Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.03,
and the Company's obligation to make such Monthly Advances shall terminate on
the 90th day referred to above. In such connection, the Company shall from its
own funds make all necessary and proper Servicing Advances, provided, however,
that the Company shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration or preservation of any
Mortgaged Property, unless it shall determine (a) that such preservation,
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan to Purchaser after reimbursement to itself for such expenses
and (b) that such expenses will be recoverable by it either through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Custodial Account pursuant to Section 4.05) or through
Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure,
in the event the Company has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Purchaser otherwise requests an environmental inspection or
42
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 Purchaser. Upon completion of the inspection or
review, the Company shall promptly provide the Purchaser with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the Purchaser
shall determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Company to proceed with foreclosure
or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean up costs, as applicable, from the related Liquidation Proceeds, or if
the Liquidation Proceeds are insufficient to fully reimburse the Company, the
Company shall be entitled to be reimbursed from amounts in the Custodial
Account pursuant to Section 4.05 hereof. In the event the Purchaser directs
the Company not to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Company shall be reimbursed for all Servicing Advances made
with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable in accordance with Accepted Servicing Practices and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage
Loan and the Mortgaged Property, to the end that the installments payable by
the Mortgagors will be sufficient to pay such charges as and when they become
due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
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 Purchaser and/or subsequent
purchasers of Mortgage Loans, - P & I." The Custodial Account shall be
established with a Qualified Depository. Upon request of the Purchaser and
within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Custodial Account. 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 Company in accordance with Section 4.05.
The Company shall deposit in the Custodial Account within two (2)
Business Days of Company's receipt, and retain therein, the following
collections received by the Company and payments made by the Company after the
Cut-off Date, other than payments of principal and
43
interest due on or before the Cut-off Date, or received by the Company
prior to the Cut-off Date but allocable to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.10 (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 and
Section 4.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03 and all amounts
required to be deposited by the Company in connection with a
shortfall in principal amount of any Qualified Substitute
Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be
paid by the Company out of its funds) which, when added to
all amounts allocable to interest received in connection
with the Principal Prepayment, equals one month's interest
on the amount of principal so prepaid at the Mortgage Loan
Remittance Rate;
(ix) any amounts required to be deposited by the Company pursuant
to Section 4.11 in connection with the deductible clause in
any blanket hazard insurance policy;
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to
Section 4.16;
(xi) with respect to each Buydown Mortgage Loan and Subsidy Loan,
an amount from the Escrow Account that when added to the
amount received from the Mortgagor for such month, will
equal the full Monthly Payment due under the related
Mortgage Note; and
44
(xii) with respect to Pledged Asset Mortgage Loans, any amounts
required to be deposited pursuant to Section 4.27 of this
Agreement in connection with a Letter of Credit.
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, and any amounts
received with respect to or related to Incremental Interest need not be
deposited by the Company into the Custodial Account. Any interest paid on
funds deposited in the Custodial Account by the depository institution shall
accrue to the benefit of the Company and the Company shall be entitled to
retain and withdraw such interest from the Custodial Account pursuant to
Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the
Company's funds made pursuant to Section 5.03, the
Company's right to reimburse itself pursuant to this
sub clause (ii) 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 Company respecting which any such
advance was made, it being understood that, in the
case of any such reimbursement, the Company's right
thereto shall be prior to the rights of Purchaser,
except that, where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or
6.02, the Company's right to such reimbursement shall
be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all
other amounts required to be paid to the Purchaser
with respect to such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing
Advances, and for any unpaid Servicing Fees, the
Company's right to reimburse itself pursuant to this
sub clause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such
other amounts as may be collected by the Company from
the Mortgagor or otherwise relating to the Mortgage
Loan, it being understood that, in the case of any
such reimbursement, the Company's right thereto shall
be prior to the rights of Purchaser, except that where
the Company is required to repurchase a Mortgage Loan
pursuant to Section 3.03 or 6.02, in which case the
Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the
Repurchase Price
45
pursuant to such sections and all other amounts required
to be paid to the Purchaser with respect to such Mortgage
Loan;
(iv) to pay itself interest actually earned on funds deposited in
the Custodial Account;
(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;
(vii) to reimburse itself for any Servicing Advances or REO
expenses after liquidation of the Mortgaged Property not
otherwise reimbursed above;
(viii) to reimburse the trustee with respect to any Securitization
Transaction for any unreimbursed Monthly Advances or
Servicing Advances made by the Trustee, as applicable, the
right to reimbursement pursuant to this sub clause (viii)
with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, proceeds of REO Dispositions,
Condemnation Proceeds, Insurance Proceeds and such other
amounts as may be collected by the Company from the
Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of such reimbursement,
such trustee's right thereto shall be prior to the rights of
the Company to reimbursement under (ii) and (iii) above, and
prior to the rights of the Purchaser under (i) above;
(ix) to remove funds inadvertently placed in the Custodial
Account by the Company; 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 Company shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Company
is not obligated to remit on such Remittance Date. The Company may use such
withdrawn funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled, "Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or
46
subsequent purchasers 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. Upon
request of the Purchaser and within ten (10) days thereof, the Company shall
provide the Purchaser with written confirmation of the existence of such
Escrow Account. Funds deposited in the Escrow Account may be drawn on by the
Company in accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within
two (2) Business Days of Company'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;
(iii) all payments on account of Buydown Funds or Subsidy Funds;
and
(iv) all Servicing Advances for Mortgagors whose Escrow Payments
are insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution, other
than interest on escrowed funds required by law to be paid to the Mortgagor.
To the extent required by law, the Company shall pay interest on escrowed
funds to the Mortgagor notwithstanding that the Escrow Account may be
non-interest bearing or that interest paid thereon is insufficient for such
purposes. The Company shall reimburse the Escrow Account for any losses
incurred as a result of the investment of amounts on deposit in the Escrow
Account.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Company only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums,
condominium charges, fire and hazard insurance premiums or
other items constituting Escrow Payments for the related
Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by
the Company pursuant to Section 4.08 with respect to a
related Mortgage Loan, but only from amounts received on the
related Mortgage Loan which represent late collections of
Escrow Payments thereunder;
47
(iii) to refund to any Mortgagor any funds found to be in excess
of the amounts required under the terms of the related
Mortgage Loan;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in
accordance with the terms of the related Mortgage and
Mortgage Note;
(v) for application to the restoration or repair of the
Mortgaged Property in accordance with the procedures
outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in
the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow Account
by the Company;
(viii) to transfer payment on account of Buydown Funds or Subsidy
Funds to the Custodial Account, 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.
With respect to each Mortgage Loan, the Company shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates, sewer rents, and other charges which are or may become a lien
upon the Mortgaged Property and the status of 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 renewal premiums)
and shall effect payment thereof prior to the applicable penalty or
termination date, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Company
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Company assumes full responsibility for the timely payment of
all such bills and shall effect timely payment of all such charges
irrespective of each Mortgagor's faithful performance in the payment of same
or the making of the Escrow Payments, and the Company shall make advances from
its own funds to effect such payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, Subsidy Account or
the Escrow Account to a different Qualified Depository from time to time,
provided that the Company shall give notice to the Purchaser of such transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are
insured by an insurer acceptable to
48
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
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the
proceeds 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 Company shall notify the Purchaser 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 Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) the Company shall cause the
Mortgagor to maintain 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 Company determines, in accordance with applicable law,
that a Mortgaged Property is located in a special flood hazard area and is not
covered by flood insurance or is covered in an amount less than the amount
required by the Flood Disaster Protection Act of 1973, as amended, the Company
shall notify the related Mortgagor that the Mortgagor must obtain such flood
insurance coverage, and if said Mortgagor fails to obtain the require flood
insurance coverage within forty-five (45) days after such notification, the
Company shall immediately force place the required flood insurance on the
Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Company shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current Xxxxxx Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may
have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that
the Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Company shall communicate and
consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the required amount of coverage for the
49
Mortgaged Property and if the Mortgagor does not obtain such coverage, the
Company shall immediately force place the required coverage on the Mortgagor's
behalf.
All policies required hereunder shall name the Company as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in
coverage.
The Company shall not interfere with the Mortgagor's freedom of
choice in selecting either his insurance carrier or agent, provided, however,
that the Company shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to Xxxxxx Xxx and Xxxxxxx Mac
and are licensed to do business in the jurisdiction in which the Mortgaged
Property is located. The Company shall determine that such policies provide
sufficient risk coverage and amounts, that they insure the property owner, and
that they properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under
any such policies (other than amounts to be deposited in the Escrow Account
and applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to
the Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket
policy insuring against losses arising from fire and hazards covered under
extended coverage on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Company shall prepare and make any claims on the
blanket policy as deemed necessary by the Company in accordance with Accepted
Servicing Practices. Any amounts collected by the Company under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.05. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, the Company shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy because of such
deductible clause, such amount to be deposited from the Company's funds,
without reimbursement therefor. Upon request of the Purchaser, the Company
shall cause to be delivered to such Purchaser a certificate of insurance and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without thirty (30) days' prior written
notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
50
The Company shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other Persons acting in any
capacity requiring such Persons to handle funds, money, documents or papers
relating to the Mortgage Loans ("Company Employees"). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker's Blanket Bond and shall protect and insure the Company against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company against
losses in connection with the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.
No provision of this Section 4.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such Fidelity Bond and Errors and Omissions Insurance Policy shall
be at least equal to the amounts acceptable to Xxxxxx Xxx or Xxxxxxx Mac. Upon
the request of any Purchaser, the Company shall cause to be delivered to such
Purchaser 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 (30) days' prior
written notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than sixty (60) days delinquent, the
Company immediately shall inspect the Mortgaged Property and shall conduct
subsequent inspections in accordance with Accepted Servicing Practices or as
may be required by the primary mortgage guaranty insurer. The Company shall
keep a record of each such inspection and, upon request, shall provide the
Purchaser with such information.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to
be applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. For claims greater
than $15,000, at a minimum the Company shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:
(i) the Company shall receive satisfactory independent
verification of completion of repairs and issuance of any
required approvals with respect thereto;
(ii) the Company shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and
materialmen's liens;
51
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy and LPMI Policy; Claims.
Except as indicated on the related Mortgage Loan Schedule, each
Mortgage Loan with an LTV in excess of 80% at the time of origination, the
Company shall, without any cost to the Purchaser, maintain or cause the
Mortgagor to maintain in full force and effect a PMI Policy insuring a portion
of the unpaid principal balance of the First Lien 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 ss.4901, et seq. In the event
that such PMI Policy shall be terminated other than as required by law, the
Company shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such
terminated PMI Policy. If the insurer shall cease to be a Qualified Insurer,
the Company shall determine whether recoveries under the PMI Policy are
jeopardized for reasons related to the financial condition of such insurer, it
being understood that the Company shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such reason. If
the Company determines that recoveries are so jeopardized, it shall notify the
Purchaser and the Mortgagor, if required, and obtain from another Qualified
Insurer a replacement insurance policy. The Company will maintain or cause to
be maintained in full force and effect any LPMI Policy issued by a Qualified
Insurer with respect to each Mortgage Loan for which such coverage is in
existence or is obtained. The Purchaser shall notify the Company of any
Mortgage Loan covered under an LPMI Policy. The Company 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 Company would have
been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 6.01, the
Company shall promptly notify the insurer under the related 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 such insurer as a condition to the continuation of
coverage under such 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 Company shall obtain a replacement PMI Policy or LPMI Policy as
provided above.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy or LPMI Policy 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 respecting a defaulted Mortgage Loan. Pursuant to Section 4.04,
any amounts
52
collected by the Company under any PMI Policy or LPMI Policy shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.05.
Any premiums payable on LPMI Policies will be paid from the Company's
own funds without reimbursement.
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 Company, or in the event the Company 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, or the perfection of
the ownership or security interest of the Purchaser in such REO Property would
be adversely affected, the deed or certificate of sale shall be taken in the
name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Company from any attorney duly licensed to practice
law in the state where the REO Property is located. The Person or Persons
holding such title other than the Purchaser shall acknowledge in writing that
such title is being held as nominee for the Purchaser.
The Company shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the purpose of its prompt disposition
and sale. The Company, either itself or through an agent selected by the
Company, shall manage, conserve, protect and operate the REO Property in the
same manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Company shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Company deems to be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event prior to the
close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless (i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three years is permitted under the foregoing sentence and is necessary to
sell any REO Property, (i) the Company shall report monthly to the Purchaser
as to the progress being made in selling such REO Property and (ii) if a
purchase money mortgage is taken in connection with such sale, such purchase
money mortgage shall name the Company as mortgagee, and such purchase money
mortgage shall not be held pursuant to this Agreement.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
53
The disposition of REO Property shall be carried out by the Company
at such price, and upon such terms and conditions, as the Company deems to be
in the best interests of the Purchaser. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. As soon as
practical thereafter the expenses of such sale shall be paid and the Company
shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03. On the
Remittance Date immediately following the Principal Prepayment Period in which
such sale proceeds are received the net cash proceeds of such sale remaining
in the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account funds necessary
for the proper operation management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Section
4.10 and the fees of any managing agent of the Company, or the Company itself.
The Company shall make monthly distributions on each Remittance Date to the
Purchaser of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described in this Section
4.16 and of any reserves reasonably required from time to time to be
maintained to satisfy anticipated liabilities for such expenses).
If REO Property is held by a REMIC, then it shall be disposed of
within the time required by the REMIC Provisions unless an extension of such
time is granted by the IRS.
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month. That statement
shall be accompanied by such other information as the Purchaser shall
reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Company shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Company shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code. The Company shall file information
reports with respect to the receipt of mortgage interest received in a trade
or business and information returns relating to cancellation of indebtedness
54
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 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any
party, without the Purchaser's prior written consent, the price paid by the
Purchaser for the Mortgage Loans, except to the extent that it is reasonable
and necessary for the Company to do so in working with legal counsel,
auditors, taxing authorities or other governmental agencies. Each party agrees
that it shall comply with all applicable laws and regulations regarding the
privacy or security of Customer Information 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 4.21 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Company 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 Company 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 Company or the receipt of notice from the Purchaser that the Company
has failed to adjust a Mortgage Interest Rate in accordance with the terms of
the related Mortgage Note, the Company shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or
deferral caused the Purchaser thereby.
Section 4.22 Fair Credit Reporting Act.
The Company, 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 4.23 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company 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
55
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 Company will distribute to the Purchaser 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
Company or the insurer under any related Primary Insurance Policy) the Company
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 Purchaser 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 Purchaser 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 Company 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 and all other amounts owed under the Buydown Mortgage Loan,
the Company shall distribute to the Purchaser 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 other amounts required to
be deposited into the Custodial Account.
Section 4.24 Establishment of and Deposits to Subsidy Account.
The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of Residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be an eligible deposit account established with a
Qualified Depository.
The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in
the manner provided for in Section 4.04(xi);
56
(ii) to transfer funds to another eligible institution in
accordance with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the
termination of this Agreement.
Notwithstanding anything to the contrary elsewhere in this Agreement,
the Company may employ the Escrow Account as the Subsidy Account to the extent
that the Company can separately identify any Subsidy Funds deposited therein.
Section 4.25 Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.25. The Company shall not hire
or otherwise utilize the services of any Subcontractor, and shall not permit
any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (b) of this Section 4.25.
(a) The Company shall not hire or otherwise utilize the services of
any Subservicer with respect to the Mortgage Loans without giving the
Purchaser or its designee fifteen (15) Business Days' advance written
notice of the effective date of such hiring or utilization of a
Subservicer, followed by written confirmation of such hiring or
utilization of a Subservicer on the effective date of such engagement
and indicating the circumstances surrounding such hiring or
utilization. Any notices required by this Section 4.25(a) shall be
sent via telecopier or certified or registered mail to the addresses
set forth below: Xxxx X. Xxxxxxxx, Servicer Oversight Group, 0000
X-Xxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000, Telecopy:
000-000-0000, and emailed to:
xxxxx_xxxxxxxx_xxxxxx@xxxxxxxxxxxxx.xxx, with a copy to Xxxxx X.
Xxxxxx, Xxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Telecopy: 000-000-0000, Email: xxxxxxx@xxxxxxx.xxx (or such
other address as such Person may otherwise specify to the Company).
The Company shall cause any Subservicer used by the Company (or by
any Subservicer) for the benefit of the Purchaser and any Depositor
to comply with the provisions of this Section 4.25 and with Sections
6.04, 6.06, 9.01(e)(iii), 9.01(e)(v), 9.01(e)(vi), 9.01(e)(vii),
9.01(e)(viii) and 9.01(f) of this Agreement to the same extent as if
such Subservicer were the Company, and to provide the information
required with respect to such Subservicer under Section 9.01(e)(iv)
of this Agreement. The Company shall be responsible for obtaining
from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered
by such Subservicer under Section 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.
57
(b) It shall not be necessary for the Company to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the
utilization of any Subcontractor. The Company shall promptly upon
request provide to the Purchaser, any Master Servicer and any
Depositor (or any designee of the Depositor, such as an
administrator) a written description (in form and substance
satisfactory to the Purchaser, such Depositor and such Master
Servicer) of the role and function of each Subcontractor utilized by
the Company 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.
As a condition to the utilization of any Subcontractor determined to
be "participating in the servicing function" within the meaning of Item 1122
of Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(e) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation and other certifications required to be delivered by such
Subcontractor under Section 6.06, in each case as and when required to be
delivered.
Section 4.26 Letter of Credit Compliance.
Notwithstanding any other provision of this Agreement, the Company
shall comply with all the requirements of any Letter of Credit so as to assure
the full benefit of such Letter of Credit to the Purchaser.
Section 4.27 Letter of Credit Draws.
The Company shall take all steps necessary to make draws under any
Letter of Credit in accordance with the provisions thereof and shall draw on
each Letter of Credit all amounts payable thereunder within the time frame
required by the Letter of Credit or such shorter time within which the Company
can effect such draw (not to exceed thirty (30) calendar days) of (i) the date
the related Pledged Asset Mortgage Loan becomes ninety (90) days or more
delinquent and (ii) the receipt of notice of non-renewal from the Pledge
Holder at any time prior to the date that all amounts owed under the related
Pledged Asset Mortgage Loan are less than or equal to 80% of the Appraised
Value of the related Mortgaged Property. The Company shall notify the
Purchaser promptly in writing upon receipt of notice from the Pledge Holder of
non-renewal of any Letter of Credit. Upon receipt of any amounts as a result
of a draw on a Letter of Credit because of the non-renewal of such Letter of
Credit or as a result of the Pledged Asset Mortgage Loan continuing in default
for ninety (90) or more days, the Company shall deposit such amounts in the
Custodial Account and such amount shall be treated as a payment of principal.
Section 4.28 Assignment of the Letter of Credit.
58
Notwithstanding anything to the contrary in this Agreement
(including, without limitation, the termination or transfer of the servicing
rights and/or obligations of the Company pursuant to Articles X and XI
hereof), the Company, as beneficiary under any Non-Assigned Letters of Credit,
shall transfer and assign, at no cost to the Purchaser, each Non-Assigned
Letter of Credit to the Purchaser in accordance with the provisions thereof
within ten (10) Business Days of such termination or transfer. In addition,
the Company shall forward within one (1) Business Day of receipt any notice
received of non-renewal of any Letter of Credit. Any funds received by the
Company from draws on the Non-Assigned Letters of Credit after the Company is
no longer the servicer hereunder shall be remitted by the Company to the
successor servicer for deposit into the Custodial Account.
Section 4.29 Pledge Holder Defaults.
Upon a default under the Letter of Credit by the Pledge Holder, the
Company shall take possession of the assets securing the Letter of Credit and
shall deposit such assets or the proceeds thereof in the Custodial Account and
apply them as a prepayment of the related Pledged Asset Mortgage Loan. If such
default described in the prior sentence occurs at any time that the Company is
no longer the servicer of the related Pledged Asset Mortgage Loan, the Company
shall, upon knowledge of such default or notice from the successor servicer of
such default with respect to any Non-Assigned Letter of Credit forward such
proceeds to the successor servicer for deposit into the Custodial Account.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net
of charges against or withdrawals from the Custodial Account pursuant to
Section 4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment
Period which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 4.04(viii); 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 succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the
second (2nd) Business Day following the Business Day on which such payment was
due, the Company shall pay to the
59
Purchaser interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus three percentage
points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by
the Company on the date such late payment is made and shall cover the period
commencing with the day following such second (2nd) Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event
of Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the Remittance Report Date, the Company shall furnish
to the Purchaser a monthly remittance advice, in an electronic form as
mutually agreed to by the Company and Purchaser, with a trial balance report
attached thereto, as to the remittance period ending on the last day of the
preceding month.
In addition, the Company shall provide the Purchaser with such
information as the Purchaser may reasonably request from time to time
concerning the Mortgage Loans as is necessary for the Purchaser 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
taxing authority or to the Purchaser pursuant to any applicable law with
respect to the Mortgage Loans and the transaction contemplated hereby.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due
on the Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the immediately preceding Determination
Date or which were deferred pursuant to Section 4.01. Any amounts held for
future distribution and so used shall be replaced by the Company 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
Purchaser required to be made on such Remittance Date. Notwithstanding the
foregoing, the Company shall not be permitted to make any advances from
amounts held for future distribution, and instead shall be required to make
all advances from its own funds, unless the Company, its parent, or their
respective successors hereunder shall have a long-term credit rating of at
least "A" by Fitch, Inc. (doing business as Fitch Ratings), "A" by Standard &
Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. and
"A2" by Xxxxx'x Investors Service, Inc. The Company's obligation to make such
Monthly Advances as to any Mortgage Loan will continue through the last
Monthly Payment due prior to the payment in full of the Mortgage Loan, or
through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including REO Disposition Proceeds, Insurance Proceeds and Condemnation
Proceeds) with respect to the
60
Mortgage Loan; provided, however, that if requested by a Rating Agency in
connection with Securitization Transaction, the Company shall be obligated to
make such advances through the Remittance Date prior to the date on which cash
is received in connection with the liquidation of REO Property; provided,
further, that such obligation shall cease if the Company determines, in its
sole reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise with respect
to a particular Mortgage Loan. In the event that the Company determines that
any such advances are non-recoverable, the Company shall provide the Purchaser
with a certificate signed by two officers of the Company evidencing such
determination.
The Company shall not have an obligation to advance amounts in
respect to shortfalls relating to the Servicemembers Civil Relief Act or
similar state or local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Company shall not exercise
such rights if prohibited by law from doing so or if the exercise of such
rights would impair or threaten to impair any recovery under the related PMI
Policy, if any.
If the Company reasonably believes it is unable under applicable law
to enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property
has been conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and the original Mortgagor remains liable thereon or (ii) in the
event the Company is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Company has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. If an assumption fee is collected by the Company for entering
into an assumption agreement the fee will be retained by the Company as
additional servicing compensation. In connection with any such assumption,
neither the Mortgage Interest Rate borne by the related Mortgage Note, the
term of the Mortgage Loan, the outstanding principal amount of the Mortgage
Loan nor any other material terms shall be changed without Purchaser's
consent.
61
To the extent that any Mortgage Loan is assumable, the Company 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 Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
monthly remittance advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents. If such Mortgage Loan is a MERS
Mortgage Loan, the Company 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 Purchaser, any and all instruments of satisfaction or
cancellation or of partial or full release.
If the Company satisfies or releases the lien of the Mortgage without
first having obtained payment in full of the indebtedness secured by the
Mortgage (other than as a result of a modification of the Mortgage pursuant to
the terms of this Agreement or liquidation of the Mortgaged Property pursuant
to the terms of this Agreement) or should the Company otherwise prejudice any
rights the Purchaser may have under the mortgage instruments, upon written
demand of the Purchaser, the Company shall repurchase the related Mortgage
Loan at the Repurchase Price by deposit thereof in the Custodial Account
within two (2) Business Days of receipt of such demand by the Purchaser. The
Company shall maintain the Fidelity Bond and Errors and Omissions Insurance
Policy as provided for in Section 4.12 insuring the Company against any loss
it may sustain with respect to any Mortgage Loan not satisfied in accordance
with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account the amount of its Servicing
Fee. The Servicing Fee shall be payable monthly and shall be computed on the
basis of the same unpaid principal balance and for the period respecting which
any related interest payment on a Mortgage Loan is received. The obligation of
the Purchaser 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, and late payment charges shall be
retained by the Company to the extent not required to be deposited in the
Custodial Account. The Company shall be required to pay all
62
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
Company shall deliver to the Purchaser and any Depositor, or if Xxxxx Fargo
Bank, N.A. is the master servicer, to the master servicer a statement of
compliance addressed to the Purchaser and such Depositor, or if Xxxxx Fargo
Bank, N.A. is the master servicer, to the master servicer and signed by an
authorized officer of the Company, to the effect that (a) a review of the
Company'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 Company 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.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
Other than 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 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
substantially 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.
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 Company shall:
(i) deliver to the Purchaser and any Depositor, or if Xxxxx Fargo
Bank, N.A. is the master servicer, to the master servicer a
report (in form and substance reasonably satisfactory to the
Purchaser and such Depositor, or if Xxxxx Fargo Bank, N.A. is
the master servicer) regarding the Company's assessment of
compliance with the
63
Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor, or if Xxxxx
Fargo Bank, N.A. is the master servicer, to the master servicer
and signed by an authorized officer of the Company and shall
address each of the "Applicable Servicing Criteria" specified
on Exhibit H hereto (or those Servicing Criteria otherwise
mutually agreed to by the Purchaser, the Company or any
successor Person that will be responsible for signing any
Sarbanes Certification with respect to a Securitization
Transaction in response to evolving interpretations of
Regulation AB);
(ii) deliver to the Purchaser and any Depositor, or if Xxxxx Fargo
Bank, N.A. is the master servicer, to the master servicer a
report of a registered public accounting firm reasonably
acceptable to the Purchaser and such Depositor, or if Xxxxx
Fargo Bank, N.A. is the master servicer, to the master servicer
that attests to, and reports on, the assessment of compliance
made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities
Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined by
the Company pursuant to Section 4.25(b) to be "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB, to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and
when provided in paragraphs (i) and (ii) of this Section 6.06;
and
(iv) deliver, and cause each Subservicer and each Subcontractor
described in clause (iii) above to deliver to the Purchaser,
any Depositor, any Master Servicer 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 Company, in the form attached hereto
as Exhibit I.
The Company acknowledges that the parties identified in clause (iv)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the
Commission.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(iii) shall address each of the Servicing Criteria specified
substantially in the form of Exhibit H hereto delivered to the Purchaser
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
64
address any elements of the Servicing Criteria other than those specified by
the Company pursuant to Section 4.25.
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.25, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(e)(vi)(A), or in a
writing furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date
prior to the closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any breach by
the Company of a representation or warranty in a writing furnished pursuant to
Section 9.01(e)(vi)(B) 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 Company under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or any
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Company as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything
in this Agreement or any applicable Reconstitution Agreement to the contrary)
of any compensation to the Company (and, if the Company is servicing any of
the Mortgage Loans in a Securitization Transaction, the Purchaser or
Depositor, as applicable, may appoint a successor 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 Company as servicer, such
provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any Subcontractor
to deliver any information, report, certification or accountants' letter when
and as required under Section 6.04 or Section 6.06, including any failure by
the Company 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 Company
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser or any Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Company under this Agreement
and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given effect.
(iii) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser), any Master Servicer and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor, as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the
65
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may have under other
provisions of this Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for damages,
specific performance or injunctive relief.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and
audit any and all of the books, records, or other information of the Company,
whether held by the Company or by another on its behalf, with respect to or
concerning this Agreement or the Mortgage Loans, during business hours or at
such other times as may be reasonable under applicable circumstances, upon
reasonable advance notice. The Purchaser shall pay its own expenses associated
with such examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans or any of them and REO Property are held, the
Company shall not take any action, cause the REMIC to take any action or fail
to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on "prohibited transactions"
as defined in Section 860F(a) (2) of the Code and the tax on "contributions"
to a REMIC set forth in Section 860G(d) of the Code) unless the Company has
received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action will not endanger such
REMIC status or result in the imposition of any such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies
or originals of any documents contained in the Servicing File for each
Mortgage Loan provided for herein. All other special reports or information
not provided for herein as shall be necessary, reasonable, or appropriate with
respect to the Purchaser or any regulatory agency will be provided at the
Purchaser's expense. All such reports, documents or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser may give.
The Company shall execute and deliver all such instruments and take
all such action as the Purchaser may reasonably request from time to time, in
order to effectuate the purposes and to carry out the terms of this Agreement.
66
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may
make available to a prospective purchaser a Consolidated Statement of
Operations of the Company for the most recently completed two (2) fiscal years
for which such a statement is available, as well as a Consolidated Statement
of Condition at the end of the last two (2) fiscal years covered by such
Consolidated Statement of Operations. The Company, 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 Company (and are
available upon request to members or stockholders of the Company or to the
public at large).
The Company also shall make available to Purchaser or prospective
purchasers a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or
the financial statements of the Company, and to permit any prospective
purchaser to inspect the Company's servicing facilities for the purpose of
satisfying such prospective purchaser that the Company has the ability to
service the Mortgage Loans as provided in this Agreement.
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser 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 Purchaser may sustain in any way
related to the failure of the Company to perform its duties and service the
Mortgage Loans in strict compliance with the terms of this Agreement. The
Company immediately shall notify the Purchaser if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, and assume (with
the prior written consent of the Purchaser) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be entered against
it or the Purchaser in respect of such claim. The Company shall follow any
written instructions received from the Purchaser in connection with such
claim. The Purchaser promptly shall reimburse the Company for all amounts
advanced by it pursuant to the preceding sentence except when the claim is in
any way related to the Company's indemnification pursuant to Section 3.03, or
the failure of the Company to service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or
67
shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Company shall be a party, or any Person succeeding to the business
of the Company, shall be the successor of the Company hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution which
is a Xxxxxx Xxx/Xxxxxxx Mac-approved company in good standing. Furthermore, in
the event the Company transfers or otherwise disposes of all or substantially
all of its assets to an affiliate of the Company, such affiliate shall satisfy
the condition above, and shall also be fully liable to the Purchaser for all
of the Company's obligations and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such Person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that
the Company may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Company shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy
of its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder
or delegate its rights or duties hereunder (other than pursuant to Section
4.01) or any portion hereof or sell or otherwise dispose of all of its
property or assets without the prior written consent of the Purchaser, which
consent shall not be unreasonably withheld.
68
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or
upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company. Any
such determination permitting the resignation of the Company shall be
evidenced by an Opinion of Counsel to such effect delivered to the Purchaser
which Opinion of Counsel shall be in form and substance acceptable to the
Purchaser. No such resignation shall become effective until a successor shall
have assumed the Company's responsibilities and obligations hereunder in the
manner provided in Section 12.01.
Without in any way limiting the generality of this Section 8.04, in
the event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder (other than
pursuant to Section 4.01) 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 Purchaser, then the Purchaser shall have the right to
terminate this Agreement upon notice given as set forth in Section 10.01,
without payment of any penalty, damages or termination fees, and without any
liability whatsoever to the Company or any third party.
ARTICLE IX
AGENCY SALES, SECURITIZATION TRANSACTIONS OR WHOLE LOAN TRANSFERS
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement
The Purchaser and the Company agree that with respect to some or all
of the Mortgage Loans, the Purchaser, at its sole option, may effect Whole
Loan Transfers, Agency Sales or Securitization Transactions, retaining the
Company as the servicer thereof or as subservicer if a master servicer is
employed, or as applicable the "seller/servicer." In the event that any
Mortgage Loan transferred pursuant to this Section 9.01 is rejected by the
transferee, the Company shall continue to service such rejected Mortgage Loan
on behalf of the Purchaser in accordance with the terms and provisions of this
Agreement.
The Company shall cooperate with the Purchaser in connection with
each Whole Loan Transfer, Agency Sales or Securitization Transaction in
accordance with this Section 9.01, provided that no such Whole Loan Transfer,
Agency Sale or Securitization Transaction shall create a greater obligation or
cost on the part of the Company than otherwise set forth in this Agreement. In
connection therewith:
(a) the Company shall make all representations and warranties
with respect to the Mortgage Loans as of the Closing Date
and with respect to the Company itself as of the closing
date of each Whole Loan Transfer, Agency Sale or
Securitization Transaction. In the event of a Securitization
Transaction or Agency Sale for which Xxxxxxx Mac
representations and warranties are required, the Company
agrees to make the representations and warranties listed on
Exhibit J, as of the
69
related Closing Date, at the time of such Securitization
Transaction or Agency Sale, with respect to the Mortgage
Loans included therein;
(b) the Company shall negotiate in good faith and execute any
seller/servicer agreements required to effectuate the
foregoing, including, without limitation, an Assignment,
Assumption and Recognition Agreement in the form attached
hereto as Exhibit B; provided, such agreements create no
greater obligation or cost on the part of the Company than
otherwise set forth in this Agreement;
(c) the Company shall represent to the Purchaser, the depositor,
the trustee, and the initial purchaser of the securities
issued in connection with any Securitization Transaction
that: (1) that the Company has serviced the Mortgage Loans
in accordance with the terms of this Agreement, and has
otherwise complied with all covenants and obligations
hereunder, and (2) that the Company has taken no action that
would, nor omitted to take any required action the omission
of which would, have the effect of impairing the mortgage
insurance or guarantee on the Mortgage Loans;
(d) the Company shall deliver an opinion of counsel (which can
be an opinion of in-house counsel to the Company) reasonably
acceptable to the Purchaser; provided that any
out-of-pocket, third party expenses incurred by the Company
in connection with the foregoing shall be paid by the
Purchaser;
(e) in connection with any Securitization Transaction the
Company shall (1) within five (5) Business Days following
request by the Purchaser or any Depositor, provide to the
Purchaser and such Depositor (or, as applicable, cause each
Third-Party Originator and each Subservicer to provide), in
writing and in form and substance reasonably satisfactory to
the Purchaser and such Depositor, the information and
materials specified in paragraphs (i), (ii), (iii) and (vii)
of this subsection (e), and (2) as promptly as practicable
following notice to or discovery by the Company, provide to
the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (iv) of
this subsection (e).
(i) If so requested by the Purchaser or any Depositor,
the Company shall provide such information
regarding (1) the Company, as originator of the
Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), or
(2) each Third-Party Originator, and (3) as
applicable, each Subservicer, as is requested for
the purpose of compliance with Items 1103(a)(1),
1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the originator's form of organization;
70
(B) a description of the originator's
origination program and how long the
originator has been engaged in
originating residential mortgage loans,
which description shall include a
discussion of the originator's experience
in originating mortgage loans of a similar
type as the Mortgage Loans; information
regarding the size and composition of the
originator's origination portfolio; and
information that may be material, in the
good faith judgment of the Purchaser or
any Depositor, to an analysis of the
performance of the Mortgage Loans,
including the originators' credit-granting
or underwriting criteria for mortgage loans
of similar type(s) as the Mortgage Loans
and such other information as the Purchaser
or any Depositor may reasonably request
for the purpose of compliance with Item
1110(b)(2) of Regulation AB;
(C) a description of any material legal or
governmental proceedings pending (or known
to be contemplated) against the Company,
each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or
relationship (of a type described in Item
1119 of Regulation AB) between the
Company, each Third-Party Originator, each
Subservicer and any of the following
parties to a Securitization Transaction,
as such parties are identified to the
Company by the Purchaser or any Depositor
in writing in advance of a Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support
provider; and
(9) any other material transaction
party.
(ii) If so requested by the Purchaser or any
Depositor, the Company shall provide (or, as
applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to
the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the
Purchaser as provided below) originated by (1)
the Company, if the Company is an originator of
Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent),
and/or (2) each Third-Party Originator. Such
Static Pool Information shall be prepared by the
Company (or Third-Party Originator) on the basis
of its reasonable, good faith interpretation of
the requirements of Item 1105(a)(1)-(3) of
Regulation AB. To the extent
71
that there is reasonably available to the Company
(or Third-Party Originator) Static Pool Information
with respect to more than one mortgage loan type,
the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information
shall be provided pursuant to this paragraph. The
content of such Static Pool Information may be in
the form customarily provided by the Company, and
need not be customized for the Purchaser or any
Depositor. Such Static Pool Information for each
vintage origination year or prior securitized pool,
as applicable, shall be presented in increments no
less frequently than quarterly over the life of
the mortgage loans included in the vintage
origination year or prior securitized pool. The
most recent periodic increment must be as of a
date no later than 135 days prior to the date of
the prospectus or other offering document in which
the Static Pool Information is to be included or
incorporated by reference. The Static Pool
Information shall be provided in an electronic
format that provides a permanent record of the
information provided, such as a portable document
format (pdf) file, or other such electronic format
reasonably required by the Purchaser or the
Depositor, as applicable.
Promptly following notice or discovery of a
material error in Static Pool Information provided
pursuant to the immediately preceding paragraph
(including an omission to include therein
information required to be provided pursuant to
such paragraph), the Company shall provide
corrected Static Pool Information to the Purchaser
or any Depositor, as applicable, in the same format
in which Static Pool Information was previously
provided to such party by the Company.
If so requested by the Purchaser or any Depositor,
the Company shall provide (or, as applicable, cause
each Third-Party Originator to provide), at the
expense of the requesting party (to the extent of
any additional incremental expense associated with
delivery pursuant to this Agreement), such
agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser
or Depositor, as applicable, pertaining to Static
Pool Information relating to prior securitized
pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool
Information with respect to the Company's or
Third-Party Originator's originations or purchases,
to calendar months commencing January 1, 2006, as
the Purchaser or such Depositor shall reasonably
request. Such statements and letters shall be
addressed to and be for the benefit of such parties
as the Purchaser or such Depositor shall designate,
which may include, by way of example, any sponsor,
any Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser
with respect to a Securitization Transaction. Any
such statement or letter may take the form of a
standard, generally applicable
72
document accompanied by a reliance letter
authorizing reliance by the addressees designated
by the Purchaser or such Depositor.
(iii) If so requested by the Purchaser or any Depositor,
the Company shall provide such information
regarding the Company, as servicer of the Mortgage
Loans, and each Subservicer (each of the Company
and each Subservicer, for purposes of this
paragraph, a "Servicer"), as is requested for the
purpose of compliance with Items 1108, 1117 and
1119 of Regulation AB. Such information shall
include, at a minimum:
(A) the Servicer's form of organization;
(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 Purchaser or
any Depositor, to any analysis of the
servicing of the Mortgage Loans or the
related asset-backed securities, as
applicable, including, without limitation:
(1) whether any prior securitizations
of mortgage loans of a type
similar to the Mortgage Loans
involving the Servicer have
defaulted or experienced an early
amortization or other performance
triggering event because of
servicing during the three-year
period immediately preceding the
related Securitization
Transaction;
(2) the extent of outsourcing the
Servicer utilizes;
(3) whether there has been previous
disclosure of material
noncompliance with the applicable
servicing criteria with respect to
other securitizations of
residential mortgage loans
involving the Servicer as a
servicer during the three-year
period immediately preceding the
related Securitization
Transaction;
(4) whether the Servicer has been
terminated as servicer in a
residential mortgage loan
securitization, either due to a
73
servicing default or to
application of a servicing
performance test or trigger; and
(5) such other information as the
Purchaser or any Depositor may
reasonably request for the purpose
of compliance with Item 1108(b)(2)
of Regulation AB;
(C) a description of any material changes
during the three-year period immediately
preceding the related Securitization
Transaction to the Servicer's policies or
procedures with respect to the servicing
function it will perform under this
Agreement and any Reconstitution
Agreements for mortgage loans of a type
similar to the Mortgage Loans;
(D) information regarding the Servicer's
financial condition, to the extent that
there is a material risk that an adverse
financial event or circumstance involving
the Servicer could have a material adverse
effect on the performance by the Company
of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the
Servicer on the Mortgage Loans and the
Servicer's overall servicing portfolio of
residential mortgage loans for the
three-year period immediately preceding
the related Securitization Transaction,
which may be limited to a statement by an
authorized officer of the Servicer to the
effect that the Servicer has made all
advances required to be made on
residential mortgage loans serviced by it
during such period, or, if such statement
would not be accurate, information
regarding the percentage and type of
advances not made as required, and the
reasons for such failure to advance;
(F) a description of the Servicer's processes
and procedures designed to address any
special or unique factors involved in
servicing loans of a similar type as the
Mortgage Loans;
(G) a description of the Servicer's processes
for handling delinquencies, losses,
bankruptcies and recoveries, such as
through liquidation of mortgaged
properties, sale of defaulted mortgage
loans or workouts;
(H) information as to how the Servicer defines
or determines delinquencies and
charge-offs, including the effect of any
grace period, re-aging, restructuring,
partial payments considered current or
other practices with respect to
delinquency and loss experience;
74
(I) a description of any material legal or
governmental proceedings pending (or known
to be contemplated) against the Servicer;
and
(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 Purchaser or any Depositor in writing
in advance of a Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support
provider; and
(9) any other material
transaction party.
(iv) For the purpose of satisfying its reporting
obligation under the Exchange Act with respect to
any class of asset-backed securities, the Company
shall (or shall cause each Subservicer and
Third-Party Originator to) (1) provide prompt
notice to the Purchaser, any Master Servicer and
any Depositor in writing of (A) any material
litigation or governmental proceedings pending
against the Company, any Subservicer or any
Third-Party Originator, (B) any affiliations or
relationships that develop following the closing
date of a Securitization Transaction between the
Company, any Subservicer or any Third-Party
Originator and any of the parties specified in
Section 9.01(e)(i)(D) (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 Company, and (E) the
Company's entry into an agreement with a
Subservicer to perform or assist in the performance
of any of the Company's obligations under this
Agreement or any Reconstitution Agreement and (2)
provide to the Purchaser and any Depositor a
description of such proceedings, affiliations or
relationships.
(v) As a condition to the succession to the Company or
any Subservicer as servicer or subservicer under
this Agreement or any Reconstitution Agreement by
any Person (i) into which the Company or such
Subservicer may be merged or consolidated, or
(ii) which may be appointed as a successor to the
Company or any Subservicer, the Company shall
provide to the Purchaser and any Depositor, at
least fifteen (15) calendar days prior to the
effective date of such succession or appointment,
(x) written notice
75
to the Purchaser and any Depositor of such
succession or appointment and (y) in writing and
in form and substance reasonably satisfactory to
the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any
Depositor in order to comply with is reporting
obligation under Item 6.02 of Form 8-K with respect
to any class of asset-backed securities.
(vi) (A) The Company shall be deemed to represent
to the Purchaser, any Master Servicer and
to any Depositor, as of the date on which
information is first provided to the
Purchaser and any Depositor, or if Xxxxx
Fargo Bank, N.A. is the master servicer,
to the master servicer under this Section
9.01(e) that, except as disclosed in
writing to the Purchaser and such
Depositor, or if Xxxxx Fargo Bank, N.A.
is the master servicer, to the master
servicer prior to such date: (1) the
Company is not aware and has not received
notice that any default, early amortization
or other performance triggering event has
occurred as to any other securitization
due to any act or failure to act of the
Company; (2) the Company has not been
terminated as servicer in a residential
mortgage loan securitization, either due
to a servicing default or to application
of a servicing performance test or
trigger; (3) no material noncompliance with
the applicable servicing criteria with
respect to other securitizations of
residential mortgage loans involving the
Company as servicer has been disclosed or
reported by the Company; (4) no material
changes to the Company's policies or
procedures with respect to the servicing
function it will perform under this
Agreement and any Reconstitution Agreement
for mortgage loans of a type similar to
the Mortgage Loans have occurred during
the three-year period immediately
preceding the related Securitization
Transaction; (5) there are no aspects of
the Company's financial condition that
could have a material adverse effect on
the performance by the Company of its
servicing obligations under this
Agreement or any Reconstitution Agreement;
(6) there are no material legal or
governmental proceedings pending (or known
to be contemplated) against the Company,
any Subservicer or any Third-Party
Originator; and (7) there are no
affiliations, relationships or transactions
relating to the Company, any Subservicer or
any Third-Party Originator with respect to
any Securitization Transaction and any
party thereto identified by the related
Depositor of a type described in Item 1119
of Regulation AB.
(B) If so requested by the Purchaser, any
Master Servicer or any Depositor on any
date following the date on which
information is first provided to the
Purchaser, any Master Servicer or any
76
Depositor under this Section 9.01(e), the
Company shall, within five (5) Business
Days following such request, confirm in
writing the accuracy of the
representations and warranties set forth
in sub clause (A) 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.
(vii) In addition to such information as the Company, as
servicer, is obligated to provide pursuant to other
provisions of this Agreement, if so requested by the
Purchaser or any Depositor, the Company shall provide such
information regarding the performance or servicing of the
Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item
1121 of Regulation AB. 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.
(f) The Company shall indemnify the Purchaser, each affiliate
of the Purchaser, and each of the following parties
participating in a Securitization Transaction: each sponsor
and issuing entity; each Person (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 purchaser, each Person who
controls any of such parties or the Depositor (within the
meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former
directors, officers, employees, agents and affiliates 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:
(i) (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 in written or electronic form under
Sections 4.25, 6.04, 6.06 and 9.01(f) by or
on behalf of the Company, or provided under
Sections 4.25, 6.04, 6.06 and 9.01(f) by or
on behalf of any Subservicer, Subcontractor
or Third-Party Originator (collectively, the
"Company Information"), or (B) the omission
or alleged omission to state in the Company
Information a material fact required to be
stated in the Company Information or
necessary in order to make the statements
therein, in the light of the circumstances
under which they were made, not
77
misleading; provided, by way of clarification,
that clause (B) of this paragraph shall be
construed solely by reference to the Company
Information and not to any other information
communicated in connection with a sale or
purchase of securities, without regard to
whether the Company Information or any
portion thereof is presented together with or
separately from such other information;
(ii) any breach by the Company of its obligations under
this Section 9.01(f), including particularly any
failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to
deliver any information, report, certification,
accountants' letter or other material when and as
required under Sections 4.25, 6.04, 6.06 and
9.01(e), including any failure by the Company to
identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122
of Regulation AB; or
(iii) any breach by the Company of a representation or
warranty set forth in Section 9.01(e)(vi)(A) or in
a writing furnished pursuant to Section
9.01(e)(vi)(B) and made as of a date prior to the
closing date of the related Securitization
Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the
Company of a representation or warranty in a
writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date
subsequent to such closing date; or
(iv) the negligence, bad faith or willful misconduct of
the Company in connection with its performance under
Sections 4.25, 6.04, 6.06 or 9.01(e).
In the case of any failure of performance described in
sub-clause (ii) of this Section 9.01(f), the Company shall
promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with
the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain
the information, report, certification, accountants' letter
or other material not delivered as required by the Company,
any Subservicer, any Subcontractor or any Third-Party
Originator.
This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
(g) The Purchaser shall indemnify the Company, each affiliate of
the Company, each Person who controls any of such parties or
the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) and the
respective present and former directors, officers, employees
and agents of each of the foregoing and of the Company, in
an Indemnification Agreement substantially
78
in the form of Exhibit K attached hereto, 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 contained
or alleged to be contained in any offering
materials related to a Securitization Transaction,
including without limitation the registration
statement, prospectus, prospectus supplement, any
private placement memorandum, any offering
circular, any computational materials, 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 alleged
untrue statement or omission or alleged omission is other
than a statement or omission arising out of, resulting from,
or based upon the Company Information; provided however,
that notwithstanding the forgoing, the parties agree that
for the purposes of this Section 9.01(g), the Purchaser
shall mean Xxxxxx Xxxxxxx Mortgage Capital Inc. and provided
further that Xxxxxx Xxxxxxx Mortgage Capital Inc. shall have
no liability under this Section 9.01 (g) with respect to
information included in or omitted from any Securitization
Materials prepared in connection with (i) a Securitization
Transaction which occurs after the Mortgage Loans have been
sold in a Whole Loan Transfer to a third party which is not
Xxxxxx Xxxxxxx Mortgage Capital Inc. or an Affiliate of
Xxxxxx Xxxxxxx Mortgage Capital Inc. or (ii) any
Securitization Transaction in which the issuer, depositor or
transferor is an entity other than Xxxxxx Xxxxxxx Mortgage
Capital Inc. or an Affiliate of Xxxxxx Xxxxxxx Mortgage
Capital Inc.
This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
The Purchaser and the Company acknowledge and agree that the purpose
of Section 9.01(e) is to facilitate compliance by the Purchaser and any
Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB also apply to comparable disclosure in
private offerings.
79
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Company
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Purchaser and any Depositor, or if Xxxxx Fargo Bank, N.A.
is the master servicer, to the master servicer in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with any Securitization Transaction, the Company
shall cooperate fully with the Purchaser and any Master Servicer to deliver to
the Purchaser (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 Purchaser and any Depositor, or if Xxxxx Fargo Bank, N.A. is the master
servicer, to the master servicer to permit the Purchaser and such Depositor,
or if Xxxxx Fargo Bank, N.A. is the master servicer, to the master servicer to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Company, any Subservicer, any Third-Party Originator and the
Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed by
the Purchaser or any Depositor to be necessary in order to effect such
compliance.
The Purchaser shall cooperate with the Company by providing timely
notice of requests for information under this Article IX and by reasonably
limiting such requests to information necessary, in the Purchaser's reasonable
judgment, to comply with Regulation AB.
In the event that the Purchaser has elected to have the Company hold
record title to the Mortgages, prior to the date of any Whole Loan Transfer,
Agency Sale of Securitization Transaction the Company shall prepare an
Assignment of Mortgage in blank or to the trustee from the Company acceptable
to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser shall
pay all preparation and recording costs associated therewith, if the
Assignments of Mortgage have not been previously prepared and recorded in the
name of the Purchaser or its designee. The Company shall execute each
Assignment of Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the trustee upon the Company's
receipt thereof. Additionally, the Company shall prepare and execute, at the
direction of the Purchaser, any note endorsements in connection with any and
all seller/servicer agreements.
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 and
with respect thereto this Agreement shall remain in full force and effect.
80
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the
part of the Company:
(i) any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this
Agreement which continues unremedied for a period of five
days after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements on
the part of the Company set forth in this Agreement or in
the Custodial Agreement which continues unremedied for a
period of ninety (90) days after the date on which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser or by
the Custodian; or
(iii) failure by the Company to maintain its license to do
business in any jurisdiction where the Mortgaged Property is
located if such license is required; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against the Company and such decree or order shall
have remained in force undischarged or unstayed for a period
of sixty (60) days; or
(v) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Company or of
or relating to all or substantially all of its property; or
(vi) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable insolvency, bankruptcy or
reorganization statute, make an assignment for the benefit
of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for
three Business Days; or
(vii) the Company ceases to meet the qualifications of a Xxxxxx
Mae/Xxxxxxx Mac servicer; or
81
(viii) the Company attempts to assign its right to servicing
compensation hereunder or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its
duties hereunder or any portion thereof in violation of
Section 8.04; or
(ix) the taking of any action by the Company, any Company
Employee, any Affiliate or any director or employee thereof
that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement or the
indictment of any of the foregoing Persons for criminal
activity related to the mortgage origination or servicing
activities of the Company, in each case, where such
indictment materially and adversely affects the ability of
the Company to perform its obligations under this Agreement
(subject to the condition that such indictment is not
dismissed within ninety (90) days); or
(ix) an Event of Default as defined in Section 6.07.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatever rights the Purchaser may have at
law or equity to damages, including injunctive relief and specific
performance, the Purchaser, by notice in writing to the Company, may terminate
all the rights and obligations of the Company under this Agreement, subject to
Section 12.01, and in and to the Mortgage Loans and the proceeds thereof.
Notwithstanding any provision of this Agreement to the contrary, in the event
the Company is terminated pursuant to the terms of this Section 10.01, no
liquidated damages shall be payable to the Company pursuant to Section 11.02
hereof.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 12.01. Upon written request from any Purchaser,
the Company shall prepare, execute and deliver to the successor entity
designated by the Purchaser any and all documents and other instruments, place
in such successor's possession all Mortgage Files, and do or cause to be done
all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents, at the
Company's sole expense. The Company shall cooperate with the Purchaser and
such successor in effecting the termination of the Company's responsibilities
and rights hereunder, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Company to the Custodial Account, Subsidy 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
Company 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 Company 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
82
the Purchaser 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(R) System or (y) in causing MERS to designate on the MERS(R) System the
successor servicer as the servicer of such Mortgage Loan.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the
Company in the performance of its obligations hereunder and its consequences.
Upon any waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the
final payment or other liquidation (or any advance with respect thereto) of
the last Mortgage Loan or the disposition of any REO Property with respect to
the last Mortgage Loan and the remittance of all funds due hereunder; (ii)
mutual consent of the Company and the Purchaser in writing; or (iii)
termination pursuant to Section 10.01 or 11.02.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the
Company may have hereunder, without cause as provided in this Section 11.02.
Any such notice of termination shall be in writing and delivered to the
Company and any Rating Agency by registered mail as provided in Section 12.05.
Other than with respect to a termination of the Company, as servicer,
pursuant to Section 10.01 hereof, the Company shall be entitled to receive, as
such liquidated damages, upon the transfer of the servicing rights, an amount
equal to 2.75% of the aggregate outstanding principal amount of the Mortgage
Loans as of the termination date paid by the Purchaser to the Company with
respect to all of the Mortgage Loans for which a servicing fee rate of .250%
is paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
83
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties
under this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant
to Section 11.02 the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
Section 8.02 and which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Company under this Agreement
simultaneously with the termination of Company's responsibilities, duties and
liabilities under this Agreement. In connection with such appointment and
assumption, the Purchaser may make such arrangements for the compensation of
such successor out of payments on Mortgage Loans as it and such successor
shall agree. In the event that the Company's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Company shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the
Company pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed pursuant to this Section 12.01 and shall
in no event relieve the Company of liability for the representations and
warranties made pursuant to Sections 3.01 and 3.02 and the remedies available
to the Purchaser under Section 3.03, it being understood and agreed that the
provisions of such Sections 3.01, 3.02, 3.03 and 8.01 shall be applicable to
the Company notwithstanding any such sale, assignment, resignation or
termination of the Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 3.01, except for subsection (h) with respect
to the sale of the Mortgage Loans and subsections (i) and (k) thereof,
whereupon such successor shall become fully vested with all the rights,
powers, duties, responsibilities, obligations and liabilities of the Company,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Company or termination of this Agreement
pursuant to Section 8.04, 10.01, 11.01 or 11.02 shall not affect any claims
that any Purchaser may have against the Company arising out of the Company's
actions or failure to act prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the
funds in the Custodial Account, Subsidy Account and Escrow Account and all
Mortgage Files and related documents and statements held by it hereunder and
the Company shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more
fully and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company
shall notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
84
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily
and intentionally waives any and all rights it may have to a trial by jury
with respect to, or any litigation based on, or arising out of, under, or in
connection with, this Agreement, or any other documents and instruments
executed in connection herewith, or any course of conduct, course of dealing,
statements (whether oral or written), or actions of the Company or the
Purchaser. This provision is a material inducement for the Purchaser to enter
into this Agreement.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until
terminated as herein provided. This Agreement shall continue notwithstanding
transfers of the Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or
mailed by registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing issues:
Xxxxx Fargo Bank, N.A.
1 Home Campus
85
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
Fax: 515/000-0000
(ii) if to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
In each instance, with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
Fax: 515/000-0000
or such other address as may hereafter be furnished to the
Purchaser in writing by the Company;
(ii) if to Purchaser:
Xxxxxx Xxxxxxx Mortgage Capital Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Whole Loan Operations Manager
Fax: (000) 000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
or such other address as may hereafter be furnished to the
Company in writing by the Purchaser;
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.
Section 12.07 Relationship of Parties.
86
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of
the Company shall be rendered as an independent contractor and not as agent
for the Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Section 8.04, this
Agreement shall inure to the benefit of and be binding upon, and shall be
enforceable by, the Company and the Purchaser and their respective successors
and assigns, including without limitation, any trustee appointed by the
Purchaser with respect to any Whole Loan Transfer, Agency Sale 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
Company's expense in the event recordation is either necessary under
applicable law or requested by the Purchaser at its sole option.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the
Company to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Purchaser hereunder, by executing an Assignment,
Assumption and Recognition Agreement substantially in the form attached as
Exhibit B, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans.
All references to the Purchaser in this Agreement shall be deemed to include
its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to
solicit the refinancing of any Mortgage Loan. It is understood and agreed that
neither (i) promotions undertaken by either party 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
87
solicitation, contacts either party in connection with the refinance of such
Mortgage or Mortgage Loan, shall constitute solicitation under this Section.
Section 12.12 Further Agreements.
The Purchaser and the Company 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 Third-Party Beneficiary.
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.
[Intentionally Blank - Next Page Signature Page]
88
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective duly authorized officers as of
the day and year first above written.
XXXXXX XXXXXXX XXXXX FARGO BANK, N.A.
MORTGAGE CAPITAL INC.
Purchaser Company
By:________________________________ By:_______________________________
Name:______________________________ Name:_____________________________
Title:_____________________________ Title:____________________________
89
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 _______________________ of Xxxxx Fargo Bank, N.A., 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_________________
90
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_________________
91
EXHIBIT A
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this _____ day of __________, 20___, Xxxxx Fargo Bank, N.A. (the
"Company") as the Company under that certain Master Seller's Warranties and
Servicing Agreement (the "Agreement"), dated as of April 1, 2006, as may be
amended from time to time, does hereby sell, transfer, assign, set over and
convey to Xxxxxx Xxxxxxx Mortgage Capital Inc. as the Purchaser (the
"Purchaser") under the Agreement, and Purchaser hereby accepts from Company,
without recourse, but subject to the terms of the Agreement, all right, title
and interest of, in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A, together with the Mortgage Files and
all rights and obligations arising under the documents contained therein.
Pursuant to Section 2.03 of the Agreement, the Company has delivered to the
Custodian the Mortgage Loan Documents for each Mortgage Loan to be purchased.
The Servicing Files retained by the Company pursuant to Section 2.01 of the
Agreement shall be appropriately marked to clearly reflect the sale of the
related Mortgage Loans to the Purchaser.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
Xxxxxx Xxxxxxx Mortgage Capital Inc. Xxxxx Fargo Bank, N.A.
Purchaser Company
By:_________________________________ By:_________________________________
Name:_______________________________ Name:_______________________________
Title:______________________________ Title:______________________________
Exhibit A
Mortgage Loan Schedule
EXHIBIT B
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
_____________, 20__, ("Agreement") among Xxxxxx Xxxxxxx Mortgage Capital Inc.
("Assignor"), [_____________________] ("Assignee") and Xxxxx Fargo Bank, N.A.
(the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest of the Assignor, as
purchaser, in, to and under (a) those certain mortgage loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Master
Seller's Warranties and Servicing Agreement (the "Purchase Agreement"), dated
as April 1, 2006, between the Assignor, as purchaser, and the Company, as
seller, solely insofar as the Purchase Agreement relates to the Mortgage
Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under and
any obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Closing Date"), the Company
shall and does hereby recognize that the Assignor will transfer the Mortgage
Loans and assign its rights under the Purchase Agreement (solely to the extent
set forth herein) to the Assignee [and that the Assignee will thereafter
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
and this Agreement to [________________] (the "Trust") created pursuant to a
Pooling and Servicing Agreement, dated as of [________________] (the "Pooling
Agreement"), among the Assignor, [________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee") and [________________], as servicer (including its successors
in interest and any successor servicer under the Pooling Agreement, the
"Servicer")]. The Company hereby acknowledges and agrees that from and after
the date hereof (i) the [Assignee] [Trust] will be the owner of the Mortgage
Loans, (ii) the Company shall look solely to the [Assignee] [Trust] for
performance of any obligations of the Assignor [insofar as they relate to the
enforcement of the representations, warranties and covenants with respect to
the Mortgage Loans], (iii) the [Assignee] [Trust (including the Trustee and
the Servicer acting on the Trust's behalf)] shall have all the rights and
remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Purchase Agreement, including, without limitation, the
enforcement of the document delivery requirements set forth in Section [___]
of the Purchase Agreement, and shall be entitled to enforce all of the
obligations of the Company thereunder insofar as they relate to the Mortgage
Loans, and (iv) all references to the Purchaser [(insofar as they relate to
the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Company)] under the Purchase
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to
refer to the [Assignee] [Trust (including the Trustee and the Servicer acting
on the Trust's behalf)]. [Neither the Company nor the Assignor shall amend or
agree to amend, modify, waiver, or otherwise alter any of the terms or
provisions of the Purchase Agreement which amendment, modification, waiver or
other alteration would in any way affect the Mortgage Loans or the Company's
performance under the Purchase Agreement with respect to the Mortgage Loans
without the prior written consent of the Trustee.]
3. Notwithstanding any statement to the contrary in Section 2 above,
the Company shall and does hereby acknowledge that the indemnification
provisions set forth in the sixth paragraph of Section 3.03, Section 8.01 and
Section 9.01(e) of the Purchase Agreement shall be available to and for the
benefit of the Assignor, the Assignee [and the Trust (including the Trustee
and the Servicer acting on the Trust's behalf)], as provided in the Purchase
Agreement.
[SECTIONS 4 AND 5 TO BE INCLUDED WITH RESPECT TO WHOLE LOAN TRANSFERS ONLY]
Representations and Warranties of the Assignor
4. The Assignor warrants and represents to the Assignee as of the
date hereof that:
2
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 Company with respect to the Purchase 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
Purchase Agreement or the Mortgage Loans, including without
limitation the transfer of the servicing obligations under the
Purchase 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
Purchase 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.
Representations and Warranties of the Assignee
5. The Assignee warrants and represents to the Assignor and the
Company as of the date hereof that:
a. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Purchase Agreement and the
Mortgage Loans, and from and after the date hereof, the Assignee
assumes for the benefit of each of the Company 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 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;
3
d. 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;
e. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor
or the Company;
f. 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
g. 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.]
Miscellaneous
6. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Purchase Agreements is:
[_____________________________________
______________________________________
______________________________________
______________________________________
Attention: _________________
7. The Assignee's wire transfer instructions for purposes of all
remittances and payments related to the Mortgage Loans and the Purchase
Agreement is:
4
[
Attention: _________________
8. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
9. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
10. This Agreement shall inure to the benefit of [(i)] the successors
and assigns of the parties hereto [and (ii) the Trust (including the Trustee
and the Servicer acting on the Trust's behalf)]. Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
11. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (solely with respect to the Mortgage Loans) by Assignor to Assignee
and nothing contained herein shall supersede or amend the terms of the
Purchase Agreement.
12. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
13. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans,
the terms of this Agreement shall control.
14. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to
such terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
XXXXXX XXXXXXX MORTGAGE CAPITAL INC.
By:________________________________________
Name:______________________________________
Its:_______________________________________
[___________________________________]
By:________________________________________
Name:______________________________________
Its:_______________________________________
XXXXX FARGO BANK, N.A.
By:________________________________________
Name:______________________________________
Its:_______________________________________
6
EXHIBIT C
FORM OF COMPANY CERTIFICATION
I, ____________, hereby certify that I am the duly elected ____________ of
Xxxxx Fargo Bank, N.A., an institution organized under the laws of the United
States (the "Company") and state as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy of
the articles of association of the Company which are in full force
and effect on the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy of
the bylaws of the Company which are in effect on the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy of
the resolutions of the Mortgage Banking Committee of the Board of
Directors of the Company authorizing the Company to execute and
deliver each of the Master Seller's Warranties and Servicing
Agreement dated as of _________ by and between the Company and the
Purchaser (the "Seller's Warranties and Servicing Agreement") and the
Custodial Agreement among the Purchaser, the Company and ____________
as ("Custodian"), collectively (the "Agreements"), by original
signature, and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original or facsimile signature, and each
such resolutions are in effect on the date hereof.
5. Either (i) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the
Company with the Agreements or the sale of the Mortgage Loans or the
consummation of the transactions contemplated by the Agreements; or
(ii) any required consent, approval, authorization or order has been
obtained by the Company.
6. To the best of my knowledge, neither the consummation of the
transactions contemplated by, nor the fulfillment of the terms of the
Agreements, conflicts or will conflict with or results or will result
in a breach of, or constitutes or will constitute a default under,
the charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or any statute or order,
rule, regulation, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is
subject or by which it is bound.
7. There are no actions, suits or proceedings pending or, to the best of
my knowledge, threatened against or affecting the Company that would
materially and adversely affect the Company's ability to perform its
obligations under the Agreements. No proceedings looking toward
merger, consolidation or liquidation, dissolution or bankruptcy of
the Company are pending or contemplated.
8. The Company is duly authorized to engage in the transactions
described and contemplated by the Agreements.
9. Capitalized terms used but not defined herein shall have the meanings
assigned in the Seller's Warranties and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto signed by name and affixed the
seal of the Company.
Dated: By:_____________________________________
Name:___________________________________
Title:__________________________________
[Seal]
I, _____________, ______________ of Xxxxx Fargo Bank, N.A., hereby
certify that _____________ is the duly elected, qualified and acting
_____________ of the Company and that the signature appearing above
is his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:_____________________________________
Name:___________________________________
Title:__________________________________
2
EXHIBIT D
CUSTODIAL AGREEMENT
EXHIBIT E
DATA FILE
(1) the Company's Mortgage Loan identifying number;
(2) the street address of the Mortgaged Property including the
city, state, county and zip code;
(3) a code indicating whether the Mortgaged Property is a single
family residence, a 2-4 family dwelling, a PUD, a
cooperative, a townhouse, manufactured housing or a unit in
a condominium project;
(4) the Mortgage Interest Rate as of the Cut-off Date;
(5) the current Monthly Payment;
(6) loan term, number of months;
(7) the stated maturity date;
(8) the Stated Principal Balance of the Mortgage Loan as of the
close of business on the Cut-off Date, after deduction of
payments of principal due on or before the Cut-off Date;
(9) the Loan-to-Value Ratio;
(10) a code indicating whether the Mortgage Loan is an Interest
Only Mortgage Loan;
(11) a code indicating whether the Mortgage Loan is a temporary
buydown (Y or N);
(12) the Servicing Fee Rate;
(13) a code indicating the mortgage insurance provider and
percent of coverage, if applicable;
(14) a code indicating whether the Mortgage Loan is covered by
lender-paid mortgage insurance (Y or N);
(15) a code indicating whether the Mortgage Loan is a
Time$aver(R) Mortgage Loan (Y or N);
(16) the Mortgagor's first and last name;
(17) a code indicating whether the Mortgaged Property is
owner-occupied;
(18) the remaining months to maturity from the Cut-off Date,
based on the original amortization schedule;
(19) the date on which the first Monthly Payment was due on the
Mortgage Loan;
(20) the actual next Due Date of the Mortgage Loan;
(21) the last Due Date on which a Monthly Payment was actually
applied to the actual principal balance;
(22) the original principal amount of the Mortgage Loan;
(23) a code indicating the purpose of the loan (i.e., purchase,
financing, rate/term refinancing, cash-out refinancing);
(24) the Mortgage Interest Rate at origination;
(25) the amount on which the first Monthly Payment was due on the
Mortgage Loan;
(26) a code indicating the documentation style (i.e., full
(providing two years employment verification - 2 years W-2's
and current pay stub or 2 years 1040's for self employed
borrowers), alternative or reduced);
(27) a code indicating if the Mortgage Loan is subject to a PMI
Policy;
(28) the Appraised Value of the Mortgage Property;
(29) the sale price of the Mortgaged Property, if applicable;
(30) the Mortgagor's Underwriting FICO Score;
(31) term of prepayment penalty in years;
(32) a code indicating the product type;
(33) a code indicating the credit grade of the Mortgage Loan;
(34) the unpaid balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of all
payments of principal;
(35) the Note date of the Mortgage Loan;
(36) the mortgage insurance certificate number and percentage of
coverage, if applicable;
(37) the Mortgagor's and Co-Mortgagor's (if any) date of birth;
(38) if the Mortgage Loan is a MERS Mortgage Loan, the MIN Number
for each MERS Mortgage Loan;
(39) employer name;
(40) subsidy program code;
(41) servicer name;
(42) the combined Loan-to-Value Ratio;
(43) the total Loan-to-Value Ratio;
(44) whether the Mortgage Loan is convertible (Y or N);
(45) a code indicating whether the Mortgage Loan is a relocation
loan (Y or N);
(46) a code indicating whether the Mortgage Loan is a leasehold
loan (Y or N);
(47) a code indicating whether the Mortgage Loan is an Alt A loan
(Y or N);
(48) a code indicating whether the Mortgage Loan is a no ratio
loan (Y or N);
(49) a code indicating whether the Mortgage Loan is a Pledged
Asset Mortgage Loan (Y or N);
(50) effective LTV percentage for Pledged Asset Mortgage Loans;
(51) citizenship type code;
(52) a code indicating whether the Mortgage Loan is a conforming
or non-conforming loan, based on the original loan balance;
(53) the name of the client for which the Mortgage Loan was
originated;
(54) the program code;
(55) the loan sub doc code;
(56) a code indicating amortization type (1 or 2);
(57) interest only note payment;
(58) first full amortization payment date;
(59) interest only term, number of months;
(60) remaining interest only term, number of months;
(61) a code indicating whether the Mortgage Loan is a 2nd lien
(Y or N);
(62) a code indicating borrower verification of assets or lender
verification of assets (L or B);
(63) combined current loan balance;
(64) the remaining interest-only term for Interest Only Mortgage
Loans;
(65) the schedule of the payment delinquencies in the prior
twelve (12) months, if applicable;
(66) the appraisal type;
(67) the appraisal date;
(68) with respect to the related Mortgagor, the debt-to-income
ratio;
The Company shall provide the following For the Home
Mortgage Disclosure Act (HMDA):
(69) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(70) the Mortgagor's and co-Mortgagor's (if applicable) race;
(71) lien status;
(72) for cash-out refinance loans, the cash purpose;
(73) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(74) the Mortgagor's and co-Mortgagor's (if applicable) social
security numbers;
(75) the number of units for the property;
(76) the year in which the property was built;
(77) the qualifying monthly income of the Mortgagor;
(78) the number of bedrooms contained in the property;
(79) a code indicating first time buyer (Y or N);
(80) the total rental income, if any;
The Seller shall provide the following for the Adjustable
Rate Mortgage Loans (if applicable):
(81) the Maximum Mortgage Interest Rate under the terms of the
Mortgage Note;
(82) the Periodic Interest Rate Cap;
(83) the Index;
(84) the next interest rate and payment Adjustment Date;
(85) the Mortgage Interest Rate adjustment cap and all subsequent
interest rate Adjustment Dates;
(86) the Gross Margin;
(87) the lifetime interest rate cap; and
(88) code for Incremental Rate Mortgage Loans.
EXHIBIT F
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be retained by the
Company in the Servicing File or delivered to the Custodian pursuant to
Sections 2.01 and 2.03 of the Seller's Warranties and Servicing Agreement to
which this Exhibit is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of without
recourse" and signed in the name of the Company by an
authorized officer (in the event that the Mortgage Loan was
acquired by the Company in a merger, the signature must be
in the following form: "[Company], successor by merger to
[name of predecessor]"; and in the event that the Mortgage
Loan was acquired or originated by the Company while doing
business under another name, the signature must be in the
following form: "[Company], formerly known as [previous
name]").
2. The original of any guarantee executed in connection with
the Mortgage Note.
3. If the Mortgage Loan is not a MERS Mortgage Loan, the
original Mortgage, with evidence of recording thereon or
a certified true and correct copy of the Mortgage sent
for recordation. If in connection with any Mortgage Loan,
the Company cannot deliver or cause to be delivered the
original Mortgage with evidence of recording thereon on
or prior to the Closing Date because of a delay caused by
the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has
been lost or because such public recording office retains
the original recorded Mortgage, the Company shall deliver
or cause to be delivered to the Custodian, a photocopy of
such Mortgage, together with (i) in the case of a delay
caused by the public recording office, an Officer's
Certificate of the Company stating that such Mortgage has
been dispatched to the appropriate public recording
office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete copy of
the original recorded Mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Company; or
(ii) in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage
certified by such public recording office or by the title
insurance company that issued the title policy to be a
true and complete copy of the original recorded Mortgage.
Further, with respect to MERS Mortgage Loans, (a) the
Mortgage names MERS as the Mortgagee and (b) the
requirements set forth in the Electronic Tracking
Agreement have been satisfied, with a conformed recorded
copy to follow as soon as the same is received by the
Company.
4. The originals or certified true copies of any document sent
for recordation of all assumption, modification,
consolidation or extension agreements, with evidence of
recording thereon.
5. If the Mortgage Loan is not a MERS Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan,
in form and substance acceptable for recording (except
for the insertion of the name of the assignee and
recording information). The Assignment of Mortgage must
be duly recorded only if recordation is either necessary
under applicable law or commonly required by private
institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the
Purchaser. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned to the
Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered
in blank. If the Mortgage Loan was acquired by the
Company in a merger, the Assignment of Mortgage must be
made by "[Company], successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or
originated by the Company while doing business under
another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]."
6. Originals or certified true copies of documents sent for
recordation of all intervening assignments of the
Mortgage with evidence of recording thereon, or if any
such intervening assignment has not been returned from
the applicable recording office or has been lost or if
such public recording office retains the original
recorded assignments of mortgage, the Company shall
deliver or cause to be delivered to the Custodian, a
photocopy of such intervening assignment, together with
(i) in the case of a delay caused by the public recording
office, an Officer's Certificate of the Company stating
that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for
recordation and that such original recorded intervening
assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate
public recording office or by the title insurance company
that issued the title policy to be a true and complete
copy of the original recorded intervening assignment of
mortgage will be promptly delivered to the Custodian upon
receipt thereof by the Company; or (ii) in the case of an
intervening assignment where a public recording office
retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such
intervening assignment certified by such public recording
office to be a true and complete copy of the original
recorded intervening assignment.
7. The electronic form of PMI Policy as identified by
certificate number.
8. The original mortgagee policy of title insurance or evidence
of title or, in the event such original title policy is
unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and
complete by the title insurance company.
9. Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
10. Original or a copy of a power of attorney, if applicable.
With respect to each Mortgage Loan, the Servicing File shall include each of
the following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
11. The original hazard insurance policy and, if required by
law, flood insurance policy, in accordance with Section 4.10
of the Agreement.
12. Residential loan application.
13. Mortgage Loan closing statement.
14. Verification of employment and income, unless originated
under the Company's Limited Documentation program, Xxxxxx
Mae Timesaver Plus.
15. Verification of acceptable evidence of source and amount of
down payment.
16. Credit report on the Mortgagor.
17. Residential appraisal report.
18. Photograph of the Mortgaged Property.
19. Survey of the Mortgage property, if required by the title
company or applicable law.
20. Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the
title policy, i.e. map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.
21. All required disclosure statements.
22. If available, termite report, structural engineer's report,
water potability and septic certification.
23. Sales contract, if applicable.
24. Evidence of payment of taxes and insurance premiums,
insurance claim files, correspondence, current and
historical computerized data files, and all other
processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and
which are required to document the Mortgage Loan or to
service the Mortgage Loan.
25. Amortization schedule, if available.
26. Payment history for any Mortgage Loan that has been closed
for more than 90 days.
In the event an Officer's Certificate of the Company is delivered to
the Custodian because of a delay caused by the public recording office in
returning any recorded document, the Company shall deliver to the Custodian,
within 240 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv)
above. An extension of the date specified in (iv) above may be requested from
the Purchaser, which consent shall not be unreasonably withheld.
EXHIBIT G
FORM OF OPINION OF COUNSEL
____________________
____________________
____________________
____________________
Re: Mortgage Loan Sale by Xxxxx Fargo Bank, N.A. (the "Company") to
Xxxxxx Xxxxxxx Mortgage Capital Inc. (the "Purchaser") of fixed
rate and adjustable rate first lien mortgage loans (the "Mortgage
Loan") pursuant to that certain Master Seller's Warranties and
Servicing Agreement by and between the Company and the Purchaser,
dated as of April 1, 2006
Dear Sir/Madam:
I am Associate General Counsel of Xxxxx Fargo Bank, N.A. and have acted as
counsel to Xxxxx Fargo Bank, N.A. (the "Company"), with respect to certain
matters in connection with the sale by the Company of Mortgage Loans pursuant
to that certain Master Seller's Warranties and Servicing Agreement by and
between the Company and Xxxxxx Xxxxxxx Mortgage Capital Inc. (the
"Purchaser"), dated as of April 1, 2006, (the "Agreement"), which sale is in
the form of whole mortgage loans. Capitalized terms not otherwise defined
herein have the meanings set forth in the Agreement.
I have examined the following documents:
1. the Agreement;
2. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed
necessary and relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreement. I
have assumed the authenticity of all documents submitted to me as originals,
the genuineness of all signatures, the legal capacity of natural persons and
the conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated
by the Agreement, the Custodial Agreement and all requisite power,
authority and legal right to execute and deliver the Agreement, the
Custodial Agreement and the Mortgage Loans, and to perform and
observe the terms and conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Agreement, each dated as of ___________________, 20__,
by and between the Company and the Purchaser, and (b) any other
document delivered prior hereto or on the date hereof in connection
with the sale and servicing of the Mortgage Loans in accordance with
the Agreement was, at the respective times of such signing and
delivery, and is, as of the date hereof, duly elected or appointed,
qualified and acting as such officer or attorney-in-fact, and the
signatures of such persons appearing on such documents are their
genuine signatures.
4. Each of the Agreement, the Custodial Agreement, and the Mortgage
Loans, has been duly authorized, executed and delivered by the
Company and is a legal, valid and binding agreement enforceable in
accordance with its terms, subject to the effect of insolvency,
liquidation, conservatorship and other similar laws administered by
the Federal Deposit Insurance Corporation affecting the enforcement
of contract obligations of insured banks and subject to the
application of the rules of equity, including those respecting the
availability of specific performance, none of which will materially
interfere with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in
order to complete the transactions contemplated by the Agreement and
the Custodial Agreement and in order to execute the endorsements to
the Mortgage Notes and the assignments of the Mortgages, and the
original or facsimile signature of the officer at the Company
executing the Agreement, the Custodial Agreement, the endorsements to
the Mortgage Notes and the assignments of the Mortgages represents
the legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the
Company with the Agreement, the Custodial Agreement or the sale and
delivery of the Mortgage Loans or the consummation of the
transactions contemplated by the Agreement and the Custodial
Agreement; or (ii) any required consent, approval, authorization or
order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreement and the Custodial
Agreement, will conflict with or results in or will result in a
breach of or constitutes or will constitute a default under the
charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any statute
or order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is
subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to
the best of my knowledge, threatened against the Company which, in my
opinion, either in any one instance or in the aggregate, may result
in any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability
on the part of the Company or which would draw into question the
validity of the Agreement and the Custodial Agreement, or of any
action taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair materially
the ability of the Company to perform under the terms of the
Agreement and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be
"threatened" unless the potential litigant or governmental
authority has manifested to the legal department of the Company
(either directly or to an officer of the Company who has relayed
such information to the legal department) or an employee of the
Company responsible for the receipt of process a present intention
to initiate such proceedings; nor have I regarded any legal or
governmental actions, investigations or proceedings as including
those that are conducted by state or federal authorities in
connection with their routine regulatory activities. The sale of
each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreement is sufficient fully to transfer all right, title
and interest of the Company thereto as noteholder and mortgagee,
apart from the rights to service the Mortgage Loans pursuant to the
Agreement.
10. The form of endorsement that is to be used with respect to the
Mortgage Loans is legally valid and sufficient to duly endorse the
Mortgage Notes to the Purchaser. Upon the completion of the
endorsement of the Mortgage Notes and the completion of the
assignments of the Mortgages, and the recording thereof, the
endorsement of the Mortgage Notes, the delivery to the Custodian of
the completed assignments of the Mortgages, and the delivery of the
original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is
initially endorsed at the Purchaser's direction, and to whom such
assignment of Mortgages is initially assigned at the Purchaser's
direction, to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and would be sufficient to prevent any
other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by the Company
from being enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
________________________________
________________________________
________________________________/_____________________________
EXHIBIT H
SERVICING CRITERIA TO BE ADDRESSED
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 Inapplicable
Servicing Criteria Servicing Criteria
------------------ -------------------------------------------------------------------- ------------------- -------------------
General Servicing Considerations
------------------ -------------------------------------------------------------------- ------------------- -------------------
Policies and procedures are instituted to monitor any X
performance or other X triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Any requirements in the transaction agreements to maintain a X
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
------------------ -------------------------------------------------------------------- ------------------- -------------------
A fidelity bond and errors and omissions policy is in effect X
on the party participating in the servicing function throughout
the reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Cash Collection and Administration
------------------ -------------------------------------------------------------------- ------------------- -------------------
Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
1122(d)(2)(i) number of days specified in the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Disbursements made via wire transfer on behalf of an obligor X
1122(d)(2)(ii) or to an investor are made only by authorized personnel.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Advances of funds or guarantees regarding collections, cash
flows or X distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
1122(d)(2)(iii) as specified in the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
The related accounts for the transaction, such as cash X
reserve accounts or X accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Each custodial account is maintained at a federally insured X
depository X 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
1122(d)(2)(v) Securities Exchange Act.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Unissued checks are safeguarded so as to prevent unauthorized X
1122(d)(2)(vi) access.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Investor Remittances and Reporting
------------------ -------------------------------------------------------------------- ------------------- -------------------
Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements;
(C) are filed with the Commission as required by its rules
and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal balance
1122(d)(3)(i) and number of mortgage loans serviced by the Servicer.
------------------ -------------------------------------------------------------------- ------------------- -------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes,
------------------ -------------------------------------------------------------------- ------------------- -------------------
distribution priority and other terms set forth in the
transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Disbursements made to an investor are posted within two X
business days to the X Servicer's investor records, or such
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Amounts remitted to investors per the investor reports agree X
with cancelled checks, or other form of payment, or custodial
1122(d)(3)(iv) bank statements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Pool Asset Administration
------------------ -------------------------------------------------------------------- ------------------- -------------------
Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
1122(d)(4)(i) loan documents.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Mortgage loan and related documents are safeguarded as X
1122(d)(4)(ii) required by the transaction agreements
------------------ -------------------------------------------------------------------- ------------------- -------------------
Any additions, removals or substitutions to the asset pool X
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Payments on mortgage loans, including any payoffs, made in X
accordance with X 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
1122(d)(4)(iv) documents.
------------------ -------------------------------------------------------------------- ------------------- -------------------
The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Changes with respect to the terms or status of an obligor's
mortgage loans X (e.g., loan modifications or re-agings)
are made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and
1122(d)(4)(vi) related pool asset documents.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
1122(d)(4)(vii) requirements established by the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Records documenting collection efforts are maintained X
during the period a X 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
1122(d)(4)(viii) unemployment).
------------------ -------------------------------------------------------------------- ------------------- -------------------
Adjustments to interest rates or rates of return for X
mortgage loans with variable rates are computed based on the
1122(d)(4)(ix) related mortgage loan documents.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
1122(d)(4)(x) of days specified in the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Payments made on behalf of an obligor (such as tax or X
insurance payments) X 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
1122(d)(4)(xi) agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Any late payment penalties in connection with any payment X
to be made on X 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
1122(d)(4)(xii) omission.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Disbursements made on behalf of an obligor are posted
within two business X days to the obligor's records
maintained by the servicer, or such other
1122(d)(4)(xiii) number of days specified in the transaction agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
Any external enhancement or other support, identified in X
Item 1114(a)(1) through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the transaction
1122(d)(4)(xv) agreements.
------------------ -------------------------------------------------------------------- ------------------- -------------------
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 Purchaser], [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 in all material respects; 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 any
Subservicer and 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:____________________________________
EXHIBIT J
XXXXXXX MAC REPRESENTATIONS AND WARRANTIES
1. Eligible Products.
With respect to each mortgage loan underlying the security, the
borrower was not encouraged or required to select a mortgage loan
product offered by the mortgage loan's originator which is a higher
cost product designed for less creditworthy borrowers, taking into
account such facts as, without limitation, the mortgage loan's
requirements and the borrower's credit history, income, assets and
liabilities. For a borrower who seeks financing through a mortgage
loan originator's higher-priced subprime lending channel, the
borrower should be directed towards or offered the mortgage loan
originator's standard mortgage line if the borrower is able to
qualify for one of the standard products.
2. Borrower's Ability to Repay.
The methodology used in underwriting the extension of credit for each
mortgage loan in the trust did not rely on the extent of the
borrower's equity in the collateral as the principal determining
factor in approving such extension of credit. The methodology
employed objective criteria that related such facts as, without
limitation, the borrower's credit history, income, assets or
liabilities, to the proposed mortgage payment and, based on such
methodology, the mortgage loan's originator made a reasonable
determination that at the time of origination the borrower had the
ability to make timely payments on the mortgage loan.
3. Points and Fees.
No borrower under a mortgage loan in the trust was charged "points
and fees" in an amount greater than (a) $1,000 or (b) 5% of the
principal amount of such mortgage loan, whichever is greater. For
purposes of this representation, "points and fees" (x) include
origination, underwriting, broker and finder's fees and charges that
the lender imposed as a condition of making the mortgage loan,
whether they are paid to the lender or a third party; and (y) exclude
bona fide discount points, fees paid for actual services rendered in
connection with the origination of the mortgage (such as attorneys'
fees, notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and tax
certifications, and home inspections); the cost of mortgage insurance
or credit-risk price adjustments; the costs of title, hazard, and
flood insurance policies; state and local transfer taxes or fees;
escrow deposits for the future payment of taxes and insurance
premiums; and other miscellaneous fees and charges that, in total, do
not exceed 0.25 percent of the loan amount.
EXHIBIT K
INDEMNIFICATION AGREEMENT
Indemnification Agreement dated as of ___________, 200__ (the
"Agreement") between Xxxxx Fargo Bank, N.A. ("Company"), ___________ (the
"Trust/Issuer" and _____________________ (the "Depositor").
Reference is made to the issuance of ____________________, Series
________, Asset-Backed Certificates (the "Certificates"), pursuant to a
[Pooling and Servicing Agreement or Trust Agreement], dated as of
_______________ (the "[Pooling and Servicing Agreement/Trust Agreement"),
among the Depositor as depositor, _________________ as master servicer and
_____________________ as trustee. The Depositor will sell certain of the
Certificates to _______________ (the "Underwriter") for offer and sale
pursuant to the terms of an Underwriting Agreement, dated ______________,
____, between the Depositor and the Underwriter. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Pooling and
Servicing Agreement.
Reference is also made to the information provided by the Company
contained in the Prospectus Supplement, under the caption, "The
Originators--______________" and "The Servicer--"__________" and any
information furnished by the Company to facilitate the Purchaser's compliance
with Regulation AB of the Securities Act of 1933, as amended from time to
time, and included in or incorporated by reference in the Prospectus
Supplement (collectively, the "Company Information").
1. (a) Company agrees to indemnify and hold harmless the
Trust/Issuer and Depositor and each of its directors and officers and
affiliates and each person, if any, who controls the Depositor within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a "Depositor Indemnified Party"), against any and all actual losses,
claims, expenses, damages or liabilities to which the Depositor Indemnified
Party may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
(i) arise out of or are based upon any untrue statement or (ii) alleged untrue
statement of any material fact contained in the Company Information or
omission to state therein, a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which such statements were made, not misleading (in each case,
regardless of whether a final judgment has been entered by a finder of fact);
provided, by way of clarification, that clause (ii) of this paragraph shall be
construed solely by reference to the Company Information and not to any other
information communicated in connection with a sale or purchase of securities,
without regard to whether the Company Information or any portion thereof is
presented together with or separately from such other information. The Company
will reimburse any such reasonable legal or other expenses actually incurred
by the Depositor Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability or action. This indemnity
agreement will be in addition to any liability which Company may otherwise
have.
(b) The Depositor agrees to indemnify and hold harmless
the Company and each of its directors and officers and affiliates and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a "Company
Indemnified Party" and
collectively with any Depositor Indemnified Party, "Indemnified Parties"),
against any and all actual losses, claims, expenses, damages or liabilities to
which the Company Indemnified Party may become subject, under the Securities
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement, prospectus, prospectus supplement, any private
placement memorandum, any offering circular, any computational materials, and
any amendments or supplements to the foregoing other than with respect to the
Company Information, or omission to state therein a material fact required to
be stated therein or necessary to make the statements made therein not
misleading (in each case, regardless of whether a final judgment has been
entered by a finder of fact); and will reimburse such reasonable legal or
other expenses actually incurred by the Company Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity agreement will be in addition to any
liability which the Depositor may otherwise have.
(c) Promptly after receipt by an Indemnified Party under
this Section 1 of notice of any claim or the commencement of any action
described therein, such Indemnified Party will, if a claim in respect thereof
is to be made against the indemnifying party under this Section 1, notify the
indemnifying party of such claim or the commencement thereof, but the omission
to so notify the indemnifying party will not relieve the indemnifying party
from any liability that it may have to the Indemnified Party (a) under this
Agreement except to the extent that the omission to notify the indemnifying
party with respect to this Agreement has a material adverse effect on the
indemnifying party's ability to interpose an adequate defense to such action
or (b) other than under this Agreement. In case any such action is brought
against the Indemnified Party, and it notifies the indemnifying party of the
commencement thereof, the Indemnifying Party will be entitled to participate
therein, and, to the extent that it may wish to do so, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to the Indemnified Party (who shall not,
except with the consent of the Indemnified Party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to the
Indemnified Party under this Section 1, the indemnifying party shall not be
liable for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation.
The Indemnified Party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of the Indemnified Party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing (which authorization shall not be unreasonably
withheld); (ii) a conflict or potential conflict exists (based on advice of
counsel to the Indemnified Party) between the Indemnified Party and the
indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the Indemnified Party)
or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the Indemnified Party, in
which case, if the Indemnified Party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of the Indemnified Party, it being
understood, however, the indemnifying party shall not, in connection with any
one action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys at any time for the Indemnified Party, which firm
shall be designated in writing by the Company, in the case of Company
Indemnified Parties, or by the Depositor, in the case of Depositor Indemnified
Parties.
The Indemnified Party, as a condition of the indemnity agreements
contained in Section 1(a), Section 1(b) and Section 1(c), shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. The indemnifying party shall not be liable for any settlement
of any such action effected without its written consent (which consent shall
not be unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless the Indemnified Party
from and against any loss or liability (to the extent set forth in Section
1(a), Section 1(b) or Section 1(c) as applicable) by reason of such settlement
or judgment.
2. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered to
or mailed by registered mail, postage prepaid, or transmitted by facsimile or
electronic mail and confirmed by similar mailed writing as follows:
(i) if to the Company:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
(ii) with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
Fax: 515/000-0000
or such other address as may hereafter be furnished to the
Depositor in writing by the Company;
(iii) if to the Depositor:
@
@
@
@
or such other address as may hereafter be furnished to the
Company in writing by the Depositor.
(iv) if to the Trust/Issuer:
@
@
@
@
or such other address as may hereafter be furnished to the
Company in writing by the Trust/Issuer.
3. 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 such
counterparts shall together constitute one instrument.
4. This Agreement shall be construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the Depositor and Company have caused their names
to be signed by their respective officers thereunto duly authorized as of the
date first above written.
XXXXX FARGO BANK, N.A.
Company
By:____________________________________
Name:
Title:
_______________________________________
Depositor
By:____________________________________
Name:
Title:
