Exhibit 99.3
EXECUTION COPY
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
XXXXXXX XXXXX MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
COUNTRYWIDE HOME LOANS, INC.,
as Countrywide
and
COUNTRYWIDE HOME LOANS SERVICING LP,
as Servicer
Dated as of
March 2, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Assignment
Agreement") made this 2nd day of March, 2006, among Countrywide Home Loans
Servicing LP, (the "Servicer"), Countrywide Home Loans, Inc. ("Countrywide"),
GS Mortgage Securities Corp., as assignee (the "Assignee"), and Xxxxxxx Sachs
Mortgage Company, as assignor (the "Assignor").
WHEREAS, the Assignor and the Servicer have entered into the Servicing
Agreement, dated as of July 1, 2004, as amended by that certain Amendment Reg
AB dated as of January 1, 2006 ("Amendment Reg AB" and, together with the
Servicing Agreement, the "Servicing Agreement"), and the Assignor and
Countrywide have entered into the Master Mortgage Loan Purchase Agreement,
dated as of July 1, 2004, as amended by that certain Amendment Reg AB (as
amended, the "Sale Agreement") pursuant to which Countrywide sold to the
Assignor certain mortgage loans listed on the mortgage loan schedule attached
to the related Purchase Confirmation (as defined in the Sale Agreement);
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Assignor certain of the mortgage loans (the "Mortgage
Loans"), which are subject to the provisions of the Servicing Agreement and
Sale Agreement and are listed on the mortgage loan schedule attached as
Exhibit 1 hereto (the "Mortgage Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated as of
February 1, 2006 (the "Trust Agreement"), among GS Mortgage Securities Corp.,
as depositor, Deutsche Bank National Trust Company, as trustee (the "Trustee")
and as a custodian, U.S. Bank National Association and JPMorgan Chase Bank,
N.A., as custodians, and Xxxxx Fargo Bank, N.A., as master servicer (the
"Master Servicer") and as securities administrator, the Assignee will transfer
the Mortgage Loans to the Trustee, together with the Assignee's rights and
obligations under the Servicing Agreement, to the extent relating to the
Mortgage Loans (other than the rights of the Assignor (and if applicable its
affiliates, officers, directors and agents) to indemnification thereunder;
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. (a) The Assignor hereby assigns to the
Assignee, as of the date hereof, all of its right, title and interest in and
to the Mortgage Loans, and all rights and obligations of the Assignor under
the Servicing Agreement and the Sale Agreement, to the extent relating to the
Mortgage Loans (other than the rights of the Assignor (and if applicable its
affiliates, officers, directors and agents) to indemnification thereunder)
from and after the date hereof), and the Assignee hereby assumes all of the
Assignor's obligations under the Servicing Agreement and the Sale Agreement,
to the extent relating to the Mortgage Loans, from and after March 2, 2006,
and the Servicer hereby acknowledges such assignment and assumption and hereby
agrees to the release of the Assignor from any obligations under the Servicing
Agreement from and after March 2, 2006, to the extent relating to the Mortgage
Loans and Countrywide hereby acknowledges such assignment and assumption and
hereby agrees to
the release of the Assignor from any obligations under the Sale Agreement from
and after March 2, 2006, to the extent relating to the Mortgage Loans.
(b) The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber the
Assignor's ownership interest in the Mortgage Loans since the respective dates
of the Servicing Agreement and Sale Agreement.
(c) The Servicer and the Assignor shall have the right to amend, modify
or terminate the Servicing Agreement without the joinder of the Assignee with
respect to mortgage loans not conveyed to the Assignee hereunder to the extent
permitted by the Servicing Agreement; provided, however, that such amendment,
modification or termination shall not affect or be binding on the Assignee.
(d) Countrywide and the Assignor shall have the right to amend, modify
or terminate the Sale Agreement without the joinder of the Assignee with
respect to mortgage loans not conveyed to the Assignee hereunder to the extent
permitted by the Servicing Agreement; provided, however, that such amendment,
modification or termination shall not affect or be binding on the Assignee.
2. Modification of the Servicing Agreement. Only in so far as it relates
to the Mortgage Loans, the Servicer and the Assignor hereby amend the
Servicing Agreement as follows:
(a) Section 3.13(b) shall be amended by deleting the second paragraph
thereof and replacing it with the following:
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 within three
years after title has been taken to such REO Property, not later than the end
of the third taxable year after the year of its acquisition unless (i) (A) a
REMIC election has not been made with respect to the arrangement under which
the Mortgage Loans and the REO Property are held, (ii) the Company obtains an
extension from the Internal Revenue Service and (iii) the Company determines,
and gives an appropriate notice to the Owner to such effect, 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 Owner as to the progress being made in selling such REO Property and (ii)
if, with the written consent of the Owner, a purchase money mortgage is taken
in connection with such sale, such purchase money mortgage shall name the
Servicer as mortgagee, and such purchase money mortgage shall not be held
pursuant to this Agreement, but instead a separate participation agreement
among the Company and Owner shall be entered into with respect to such
purchase money mortgage.
(b) Section 7.1 shall be amended as follows:
(i) Subsection (ii) of Section 7.1 shall be deleted in its entirety and
replaced with the following:
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"failure by the Company duly to observe or perform in any material
respect any of the covenants or agreements on the part of the Company set
forth in this Agreement (other than those listed in subsection (i) and
subsection (ix) of this Section 7.1) which continues unremedied for a period
of 30 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Company; or"
(ii) Subsection (vii) of Section 7.1 shall be amended by deleting
the "." at the end of subsection (vii) and replacing it with "; or"
(iii) Subsection (viii) of Section 7.1 shall be amended by
deleting the "." at the end of subsection (viii) and replacing it with
"; or"
(iv) A new subsection (ix) shall be added immediately following
subsection (viii) which shall be as follows:
"failure by the Company duly to observe or perform in any material
respect any of the covenants or agreements on the part of the Company set
forth in Section 5.6 of this Agreement which continues unremedied for a period
of 10 days after the date on which written notice of such failure, requiring
the same to be remedied shall have been given to the Company."
(c) Section 9.1(b) shall be amended by deleting it in its entirety and
replacing it with the following:
"The Company shall deliver to the successor (i) the funds in the
Custodial Account and the Escrow Account to which the Owner is entitled
pursuant to the terms of this Agreement, (ii) all other funds to which the
Owner is entitled pursuant to the terms of this Agreement and (iii) all other
amounts which may thereafter be received with respect to the Mortgage Loans
and to which the Company is not entitled pursuant to the terms of this
Agreement within two Business Days of notice of the appointment of such
successor. The Company shall deliver to the successor all Collateral Files and
Servicing Files and related documents and statements held by it hereunder
within thirty calendar days of receipt of notice of the appointment of such
successor. 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."
(d) Section 2(c)(iv) of that certain Amendment Reg AB shall be amended
by deleting it in its entirety and replacing it with the following:
"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, if applicable, any Third-Party
Originator to) (a) provide prompt notice to the Purchaser, any Master Servicer
and any Depositor in writing of (1) any merger, consolidation or sale of
substantially all of the assets of the Company, (2) 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 the Agreement or any Reconstitution
Agreement that qualifies as an "entry into a material definitive agreement"
under Item 1.01 of the form 8-K, (3) any Event of Default under the terms of
the Agreement or any Reconstitution Agreement to the extent not known by such
Purchaser,
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Master Servicer or Depositor, and (4) any material litigation or governmental
proceedings involving the Company, any Subservicer or any Third Party
Originator."
(e) A new Section 2(c)(vi) shall be added to that certain Amendment Reg
AB as follows:
"The Company shall provide to the Purchaser and any Depositor a
description of any affiliation or relationship required to be disclosed under
Item 1119 between the Company and any of the parties listed in Items 1119
(a)(1)-(6) of Regulation AB that develops following the closing date of a
Securitization Transaction (other than an affiliation or relationship that the
Purchaser, the Depositor or the issuing entity is required to disclose under
Item 1119 of Regulation AB) no later than 15 calendar days prior to the date
the Depositor is required to file its Form 10-K disclosing such affiliation or
relationship. For purposes of the foregoing, the Company (1) shall be entitled
to assume that the parties to the Securitization Transaction with whom
affiliations or relations must be disclosed are the same as on the closing
date if it provides a written request (which may be by e-mail) to the
Depositor or Master Servicer, as applicable, requesting such confirmation and
either obtains such confirmation or receives no response within three (3)
Business Days, (2) shall not be obligated to disclose any affiliations or
relationships that may develop after the closing date for the Securitization
Transaction with any parties not identified to the Company pursuant to clause
(D) of paragraph (i) of this Section 2(c), and (3) shall be entitled to rely
upon any written identification of parties provided by the Depositor, the
Purchaser or any master servicer."
(f) A new section 6 shall be added immediately following section 5 of
that certain Amendment Reg AB which shall be as follows:
"6. Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator under the Master Servicing and Trust Agreement, dated as of
February 1, 2006, among GS Mortgage Securities Corp., Deutsche Bank National
Trust Company, as trustee and as custodian, and JPMorgan Chase Bank, N.A., as
a custodian, shall be considered a third-party beneficiary to Sections 2(d),
2(e) and 2(g) (solely with respect to noncompliance under Sections 2(d) and
2(e)) of this Amendment Reg AB, entitled to all the rights and benefits
thereof as if it were a direct party to the Amendment Reg AB."
3. Accuracy of Servicing Agreement. (a) The Servicer and the Assignor
represent and warrant to the Assignee that (i) attached hereto as Exhibit 2 is
a true, accurate and complete copy of the Servicing Agreement, (ii) the
Servicing Agreement is in full force and effect as of the date hereof, (iii)
except as provided in Section 2 above, the Servicing Agreement has not been
amended or modified in any respect and (iv) no notice of termination has been
given to the Servicer under the Servicing Agreement. The Servicer, in its
capacity as servicer under the Servicing Agreement, further represents and
warrants that the representations and warranties contained in Section 2.1 of
the Servicing Agreement are true and correct as of the Closing Date (as such
term is defined in the Servicing Agreement).
(b) Countrywide and the Assignor represent and warrant to the Assignee
that (i) attached hereto as Exhibit 3 is a true, accurate and complete copy of
the Sale Agreement, (ii) the Sale Agreement is in full force and effect as of
the date hereof, (iii) the Sale Agreement has not been amended or modified in
any respect except as contemplated herein and (iv) no notice of
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termination has been given to Countrywide under the Sale Agreement.
Countrywide, in its capacity as seller under the Sale Agreement, further
represents and warrants that the representations and warranties contained in
Section 3.01 of the Sale Agreement are true and correct as of the Closing Date
(as such term is defined in the Sale Agreement).
4. Recognition of Assignee. From and after the date hereof or until the
Assignee no longer owns the Mortgage Loans, the Servicer shall note the
transfer of the Mortgage Loans to the Assignee in its books and records, shall
recognize the Assignee as the owner of the Mortgage Loans and, notwithstanding
anything herein to the contrary, shall service all of the Mortgage Loans for
the benefit of the Assignee pursuant to the Servicing Agreement the terms of
which are incorporated herein by reference. It is the intention of the
Assignor, Countrywide and Assignee that the Sale Agreement shall be binding
upon and inure to the benefit of Countrywide and the Assignee and their
successors and assigns.
5. Representations and Warranties of the Assignee. The Assignee hereby
represents and warrants to the Assignor, Countrywide and the Servicer as
follows:
(a) Decision to Purchase. The Assignee represents and warrants that it is
a sophisticated investor able to evaluate the risks and merits of the
transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor, Countrywide
or the Servicer other than those contained in the Sale Agreement, the
Servicing Agreement or this Assignment Agreement.
(b) Authority. The Assignee hereto represents and warrants that it is
duly and legally authorized to enter into this Assignment Agreement and to
perform its obligations hereunder and under the Servicing Agreement and Sale
Agreement.
(c) Enforceability. The Assignee hereto represents and warrants that
this Assignment Agreement has been duly authorized, executed and delivered by
it and (assuming due authorization, execution and delivery thereof by each of
the other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
6. Representations and Warranties of the Assignor. The Assignor hereby
represents and warrants to the Assignee, Countrywide, and the Servicer as
follows:
(a) Organization. The Assignor has been duly organized and is validly
existing as a limited partnership in good standing under the laws of the State
of New York with full power and authority (corporate and other) to enter into
and perform its obligations under the Servicing Agreement, the Sale Agreement
and this Assignment Agreement.
(b) Enforceability. This Assignment Agreement has been duly executed and
delivered by the Assignor, and, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid, and
binding agreement of the Assignor, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency, reorganization,
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moratorium, or other similar laws affecting creditors' rights generally and to
general principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(c) No Consent. The execution, delivery and performance by the Assignor
of this Assignment Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof.
(d) Authorization; No Breach. The execution and delivery of this
Assignment Agreement have been duly authorized by all necessary corporate
action on the part of the Assignor; neither the execution and delivery by the
Assignor of this Assignment Agreement, nor the consummation by the Assignor of
the transactions herein contemplated, nor compliance by the Assignor with the
provisions hereof, will conflict with or result in a breach of, or constitute
a default under, any of the provisions of the governing documents of the
Assignor or any law, governmental rule or regulation or any material judgment,
decree or order binding on the Assignor or any of its properties, or any of
the provisions of any material indenture, mortgage, deed of trust, contract or
other instrument to which the Assignor is a party or by which it is bound.
(e) Actions; Proceedings. There are no actions, suits or proceedings
pending or, to the knowledge of the Assignor, threatened, before or by any
court, administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Assignment Agreement or (B)
with respect to any other matter that in the judgment of the Assignor will be
determined adversely to the Assignor and will, if determined adversely to the
Assignor, materially adversely affect its ability to perform its obligations
under this Assignment Agreement.
7. Additional Representations and Warranties of the Assignor With
Respect to the Mortgage Loans. The Assignor hereby represents and warrants to
the Assignee as follows:
(a) Prior Assignments; Pledges. Except for the sale to the Assignee, the
Assignor has not assigned or pledged any Mortgage Note or the related Mortgage
or any interest or participation therein.
(b) Releases. The Assignor has not satisfied, canceled or subordinated
in whole or in part, or rescinded any Mortgage, and the Assignor has not
released the related Mortgaged Property from the lien of any Mortgage, in
whole or in part, nor has the Assignor executed an instrument that would
effect any such release, cancellation, subordination, or rescission. The
Assignor has not released any Mortgagor, in whole or in part, except in
connection with an assumption agreement or other agreement approved by the
related federal insurer, to the extent such approval was required.
(c) Compliance with Applicable Laws. With respect to each Mortgage Loan,
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, predatory and abusive
lending or disclosure laws applicable to such Mortgage Loan,
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including without limitation, any provisions relating to prepayment charges,
have been complied with.
(d) High Cost. No Mortgage Loan is categorized as "High Cost" pursuant
to the then-current Standard & Poor's Glossary for File Format for LEVELS(R)
Version 5.6(c), Appendix E, as revised from time to time and in effect as of
the Original Purchase Date. Furthermore, none of the Mortgage Loans sold by
the Seller are classified as (a) a "high cost mortgage" loan under the Home
Ownership and Equity Protection Act of 1994, or (b) a "high cost home,"
"covered," "high-cost," "high-risk home," or "predatory" loan under any other
applicable state, federal or local law.
(e) HOEPA. No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994.
(f) Georgia Fair Lending Act. No Mortgage Loan is secured by a property
in the state of Georgia and originated between October 1, 2002 and March 7,
2003.
(g) Credit Reporting. The Assignor will cause to be fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on Mortgagor credit files to Equifax, Experian and Trans Union
Credit Information Company (three of the credit repositories), on a monthly
basis.
(h) Arbitration. With respect to any Mortgage Loan originated on or
after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transactions.
(i) Prepayment Penalty. No subprime Mortgage Loan originated on or after
October 1, 2002, will impose a prepayment penalty for a term in excess of
three years after origination. Any Mortgage Loans originated prior to such
date, and any non-subprime Mortgage Loans, will not impose prepayment
penalties in excess of five years.
(j) Manufactured Housing. To the Assignor's knowledge, with respect to
any Mortgage Loans that are on manufactured housing, such housing will be the
principal residence of the borrower upon origination of the Mortgage Loan.
(k) Loan Limits. The original principal balance of each Loan Group 1 and
Loan Group 3 Mortgage Loan is within Xxxxxxx Mac's dollar amount limits for
conforming one- to four-family mortgage loans. No Group 1 or Group 3 Mortgage
Loan contains a first lien mortgage that, at origination, exceeded the
applicable loan limits specified below. The current limits are as follows:
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Number of Units Maximum Original Loan Amount of First Mortgage
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Continental United Alaska, Guam, Hawaii or
States or Puerto Rico ------------------------
Virgin Islands
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1 $417,000 $625,500
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2 $533,850 $800,775
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3 $645,300 $967,950
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4 $801,950 $1,202,925
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(l) Bring Down. To the Assignor's knowledge, as of the date of this
document, with respect to each Mortgage Loan, no event has occurred from and
after the Original Purchase Date to the date hereof that would cause any of
the representations and warranties relating to such Mortgage Loan set forth in
Section 3.02 of the Sale Agreement to be untrue in any material respect as of
the date hereof as if made on the date hereof. With respect to those
representations and warranties which are made to the best of the Assignor's
knowledge, if it is discovered by the Assignor that the substance of such
representation and warranty is inaccurate, notwithstanding the Assignor's lack
of knowledge with respect to the substance of such representation and
warranty, such inaccuracy shall be deemed a breach of the applicable
representation and warranty.
It is understood and agreed that the representations and warranties set
forth in Sections 6 and 7 shall survive delivery of the respective mortgage
loan documents to the Assignee or its designee and shall inure to the benefit
of the Assignee and its assigns notwithstanding any restrictive or qualified
endorsement or assignment. Upon the discovery by the Assignor or the Assignee
and its assigns of a breach of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
other parties to this Assignment Agreement, and in no event later than two (2)
Business Days from the date of such discovery. It is understood and agreed
that the obligations of the Assignor set forth in Section 8 to repurchase or,
in limited circumstances, substitute a Mortgage Loan constitute the sole
remedies available to the Assignee and its assigns on their behalf respecting
a breach of the representations and warranties contained in Sections 6 and 7.
It is further understood and agreed that, except as specifically set forth in
Sections 6 and 7, the Assignor shall be deemed not to have made the
representations and warranties in Section 7(k) with respect to, and to the
extent of, representations and warranties made, as to the matters covered in
Section 7(k), by Countrywide in the Sale Agreement (or any officer's
certificate delivered pursuant thereto, if any).
It is understood and agreed that, with respect to the Mortgage Loans,
the Assignor has made no representations or warranties to the Assignee other
than those contained in Sections 6 and 7, and no other affiliate of the
Assignor has made any representations or warranties of any kind to the
Assignee.
8. Recycling Representation for Seasoned Loans. The Assignor hereby
represents and warrants to the Assignee that it currently operates or actively
participates in an on-going and active program to make periodic purchases of
mortgage loans, and/or issues and/or purchases securities or bonds supported
by the mortgages, with a portion of the proceeds generated by such program or
business being used to purchase mortgages made to borrowers who are (a)(i)
low-income families living in low-income areas, and/or (ii) very low-income
families. The Assignor agrees that Xxxxxxx Mac for a period of two (2) years
following the date of this Agreement may contact the Assignor to confirm that
it continues to operate or actively participate in the mortgage business and
to obtain other nonproprietary information about the Assignor's activities
that may assist Xxxxxxx Mac in completing its regulatory reporting
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requirements. The Assignor agrees to make reasonable efforts to provide such
information to Xxxxxxx Mac.
9. Repurchase of Mortgage Loans. Upon discovery or notice of any breach
by the Assignor of any representation, warranty or covenant under this
Assignment Agreement that materially and adversely affects the value of any
Mortgage Loan or the interest of the Assignee therein (it being understood
that any such defect or breach shall be deemed to have materially and
adversely affected the value of the related Mortgage Loan or the interest of
the Assignee therein if the Assignee incurs a loss as a result of such defect
or breach), the Assignee promptly shall request that the Assignor cure such
breach and, if the Assignor does not cure such breach in all material respects
within 60 days from the date on which it is notified of the breach, the
Assignee may enforce the Assignor's obligation hereunder to repurchase such
Mortgage Loan from the Assignee at the Repurchase Price as defined in the Sale
Agreement or, in limited circumstances (as set forth below), substitute such
mortgage loan for a Substitute Mortgage Loan (as defined below).
Notwithstanding the foregoing, however, if such breach is a Qualification
Defect as defined in the Sale Agreement, such cure repurchase, or substitution
must take place within 90 days of discovery of such Qualification Defect.
Notwithstanding the foregoing, a breach of any of the representations and
warranties set forth in paragraph (l) in Section 3.01 of the Sale Agreement,
paragraphs (g), (k), (l), (ee), (rr) or (ss) of Section 3.02 of the Sale
Agreement, or in clauses (c), (e), (f), (g), (h), (i), (j) or (k) of Section 7
of this Agreement, in each case, will be deemed automatically to materially
and adversely affect the value of such Mortgage Loan and the interests of the
Trustee and Certificateholders in such Mortgage Loan.
The Assignor shall have the option, but is not obligated, to substitute
a Substitute Mortgage Loan for a Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, by removing such Mortgage Loan and
substituting in its place a Substitute Mortgage Loan or Loans and providing
the Substitution Adjustment Amount, if any, provided that any such
substitution shall be effected not later than 90 days from the date on which
it is notified of the breach.
In the event Countrywide has breached a representation or warranty under
the Sale Agreement that is substantially identical to, or covers the same
matters as, a representation or warranty breached by the Assignor hereunder,
the Assignee shall first proceed against Countrywide to cure such breach or
purchase such mortgage loan from the Trust. If Countrywide does not within 90
days after notification of the breach, take steps to cure such breach (which
may include certifying to progress made and requesting an extension of the
time to cure such breach, as permitted under the Sale Agreement) or purchase
the Mortgage Loan, the Trustee shall be entitled to enforce the obligations of
the Assignor hereunder to cure such breach or to purchase or substitute for
the Mortgage Loan from the Trust.
In addition, the Assignor shall have the option, but is not obligated,
to substitute a Substitute Mortgage Loan for a Mortgage Loan with respect to
which Countrywide has breached a representation and warranty and is obligated
to repurchase such Mortgage Loan under the Sale Agreement, by removing such
Mortgage Loan and substituting in its place a Substitute Mortgage Loan or
Loans, provided that any such substitution shall be effected not later than 90
days from the date on which it is notified of the breach.
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In the event of any repurchase or substitution of any Mortgage Loan by
the Assignor hereunder, the Assignor shall succeed to the rights of the
Assignee to enforce the obligations of Countrywide to cure any breach or
repurchase such Mortgage Loan under the terms of the Sale Agreement with
respect to such Mortgage Loan. In the event of a repurchase or substitution of
any Mortgage Loan by the Assignor, the Assignee shall promptly deliver to the
Assignor or its designee the related Mortgage File and shall assign to the
Assignor all of the Assignee's rights under the Sale Agreement, but only
insofar as the Sale Agreement relates to such Mortgage Loan.
Except as specifically set forth herein, the Assignee shall have no
responsibility to enforce any provision of this Assignment Agreement, to
oversee compliance hereof or to take notice of any breach or default thereof.
For purposes of this Section, "Deleted Mortgage Loan" and "Substitute
Mortgage Loan" shall be defined as set forth below.
"Deleted Mortgage Loan" A Mortgage Loan which is to be, pursuant to this
Section 8, replaced or to be replaced by the Assignor with a Substitute
Mortgage Loan.
"Substitute Mortgage Loan" A mortgage loan substituted by the Assignor
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) be accruing interest at a rate no lower than and
not more than 2% per annum higher than that of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than and not more than one
year less than that of the Deleted Mortgage Loan; (iv) be of the same type as
the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same
periodic rate cap, lifetime rate cap, and index); and (v) comply with each
representation and warranty set forth in Section 3.02 of the Sale Agreement.
"Substitution Adjustment Amount" means with respect to any Mortgage
Loan, the amount remitted by GSMC on the applicable Distribution Date which is
the difference between the outstanding principal balance of a Substitute
Mortgage Loan as of the date of substitution and the outstanding principal
balance of the Deleted Mortgage Loan as of the date of substitution.
10. Continuing Effect. Except as contemplated hereby, the Servicing
Agreement and Sale Agreement shall remain in full force and effect in
accordance with their respective terms.
11. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
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EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS ASSIGNMENT
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 SUCH PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT AGREEMENT.
12. Notices. Any notices or other communications permitted or required
hereunder or under the Servicing Agreement or Sale Agreement shall be in
writing and shall be deemed conclusively to have been given if personally
delivered at or mailed by registered mail, postage prepaid, and return receipt
requested or transmitted by telex, telegraph or telecopier and confirmed by a
similar mailed writing, to:
(a) in the case of the Servicer,
Countrywide Home Loans Servicing LP
000 Xxxxxxxxxxx Xxx
Xxxx Xxxxxx, XX 00000
Attention: Investor Accounting
With a copy to:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
or such other address as may hereafter be furnished by the Servicer;
(b) in the case of Countrywide,
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
With a copy to:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
or such other address as may hereafter be furnished by Countrywide;
(c) in the case of the Assignee,
11
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignee, and
(d) in the case of the Assignor,
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignor.
13. Counterparts. This Assignment Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
14. Definitions. Any capitalized term used but not defined in this
Assignment Agreement has the meaning assigned thereto in the Servicing
Agreement or the Trust Agreement, as applicable.
15. Third Party Beneficiary. The parties agree that the Trustee is
intended to be, and shall have the rights of, a third party beneficiary of
this Assignment Agreement.
[SIGNATURE PAGE FOLLOWS]
12
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement the day and year first above written.
XXXXXXX SACHS MORTGAGE
COMPANY
By: Xxxxxxx Xxxxx Real Estate Funding
Corp., its General Partner
By: /s/ Xxxx Xxxxx
----------------------------
Name: Xxxx Xxxxx
Title: Managing Director
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
----------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
COUNTRYWIDE HOME LOANS
SERVICING LP
BY: COUNTRYWIDE GP, INC., ITS
GENERAL PARTNER
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: First Vice President
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: First Vice President
CHL Step 1 AAR
EXHIBIT 1
Mortgage Loan Schedule
----------------------
[On File with the Securities Administrator as provided by the Depositor]
1-1
EXECUTION
EXHIBIT 2
Servicing Agreement
-------------------
[See Attached]
==============================================================================
SERVICING AGREEMENT
between
COUNTRYWIDE HOME LOANS SERVICING LP
(Servicer)
and
XXXXXXX SACHS MORTGAGE COMPANY
(Owner)
Dated as of July 1, 2004
Fixed & Adjustable-Rate First Lien Residential Mortgage Loans
==============================================================================
DESCRIPTION OF ATTACHMENTS
Exhibit A MORTGAGE LOAN SCHEDULE
Exhibit B LIST OF COLLATERAL DOCUMENTS
Exhibit C LIST OF DOCUMENTS IN CREDIT FILE
Exhibit D FORM OF XXXXXXXX-XXXXX ACT CERTIFICATION
i
EXECUTION
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement") dated as of July 1, 2004, is
by and between COUNTRYWIDE HOME LOANS SERVICING LP, in its capacity as
servicer (the "Servicer"), and XXXXXXX SACHS MORTGAGE COMPANY, and its
successors and assigns, as owner (the "Owner").
15. PRELIMINARY STATEMENT
WHEREAS, the Owner and Countrywide Home Loans, Inc. ("Countrywide") have
entered into that certain Master Mortgage Loan Purchase Agreement dated as of
July 1, 2004 between the Owner, as purchaser and Countrywide, as seller,
pursuant to which the Owner will purchase and Countrywide will sell from time
to time, certain fixed and adjustable-rate first lien residential mortgage
loans (the "Master Mortgage Loans Purchase Agreement");
WHEREAS, the Servicer is in the business of providing primary servicing
of mortgage loans and owns the right to service the Mortgage Loans (as
hereinafter defined) listed on the Mortgage Loan Schedule (as hereinafter
defined);
WHEREAS, the Owner has requested the Servicer to service the Mortgage
Loans and Servicer has agreed to service, as an independent contractor, such
mortgage loans for the Owner on the terms and conditions set forth herein; and
WHEREAS, the Servicer and the Owner desire to prescribe the terms and
conditions regarding the management, servicing, and control of such mortgage
loans.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Servicer and the Owner agree
as follows:
16. ARTICLE I DEFINITIONS
Whenever used herein, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Acceptable Servicing Procedures: The procedures, including prudent
collection and loan administration procedures, and standard of care employed
by prudent mortgage servicers. Such standard of care (i) shall not be lower
than that the Servicer customarily employs and exercises in servicing and
administering similar mortgage loans for its own account, (ii) shall be in
accordance with the requirements of the Servicer's policies and procedures,
(iii) shall be, at a minimum, at least as prudent as the requirements of
Xxxxxx Xxx as set forth from time to time in the Xxxxxx Mae Selling and
Servicing Guide, as amended from time to time, and (iv) shall be in full
compliance with all federal, state and local laws, ordinances, rules and
regulations.
Agreement: This Servicing Agreement, including all exhibits and schedules
hereto, and all amendments hereof and supplements hereto.
Ancillary Income: All income if any, derived from any Mortgage Loan,
including but not limited to late charges, fees received with respect to
checks or bank drafts returned by the related bank for non-sufficient funds,
assumption fees, speed pay fees, Prepayment Charges, reconveyance and demand
statement fees, loan modification fees and reamortization fees.
Applicable Requirements: The (i) terms of the Mortgage and Mortgage Note
related to each Mortgage Loan, (ii) the federal, state, local and foreign
laws, statutes, rules, regulations, ordinances, standards, requirements,
administrative rulings, orders and processes pertaining to Mortgage Loans,
including but not limited to those pertaining to the processing, origination
and servicing of the Mortgage Loans and the servicer's policies and
procedures, (iii) the requirements of a Primary Mortgage Insurer (if any) with
respect to the processing, origination, insuring, servicing or filing of
claims in connection with the Mortgage Loans, (iv) the requirements of the
Owner as set forth in this Agreement, and (v) the reasonable and customary
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as the Mortgage Loans in the
jurisdictions in which the related Mortgaged Properties are located.
ARM Loan: A Mortgage Loan as to which the related Mortgage Note provides
that the Mortgage Interest Rate may be adjusted periodically.
Assignment of Mortgage: An assignment of mortgage, notice of transfer, or
equivalent instrument, in recordable form, sufficient under and complying with
the laws of the jurisdiction wherein the related Mortgaged Property is located
to reflect of record the sale of the Mortgage Loan to the assignee named
therein.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking or savings and loan institutions in the States of New York,
California or Texas are authorized or obligated by law or executive order to
be closed.
2
Closing Date: The date on which the sale and purchase of a Mortgage Loan
Package is consummated between the owner and Countrywide pursuant to the terms
of the Mortgage Loan Purchase Agreement.
Code: The Internal Revenue Code of 1986, as amended from time to time, or
any successor statute thereto.
Collateral Documents: With respect to any Mortgage Loan, the mortgage
loan documents pertaining to such Mortgage Loan which are specified in Exhibit
B hereto and any additional mortgage documents pertaining to such Mortgage
Loan required to be added to the related Collateral File pursuant to the terms
of this Agreement.
Collateral File: With respect to any Mortgage Loan, the file pertaining
to such Mortgage Loan that contains each of the related Collateral Documents.
Condemnation Proceeds: All awards or settlements in respect of a taking
of all or part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation.
Consents: shall mean the unconditional written consent or approval, as
necessary, of an Investor and any applicable Insurer to the Servicer's
servicing of the Mortgage Loans hereunder.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and a
Proprietary Lease.
Cooperative Property: The real property and improvements owned by the
Cooperative Corporation, including the allocation of individual dwelling units
to the holders of the Coop Shares of the Cooperative Corporation.
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a Cooperative
Property.
Countrywide: Countrywide Home Loans, Inc., or any successor or assign to
Countrywide under this Agreement as provided herein.
Credit File: With respect to any Mortgage Loan, a file pertaining to such
Mortgage Loan and containing copies of the mortgage loan documents described
on Exhibit C attached hereto, the credit documentation relating to the
origination of such Mortgage Loan and copies of the Collateral Documents. Each
Credit File shall be maintained by the Servicer (either on paper or on
microfilm or any other comparable medium), and shall be delivered to the Owner
as soon as practicable upon request.
3
Custodial Account: The account or accounts created and maintained
pursuant to Section 3.4 of this Agreement which account(s) shall be an
Eligible Account.
Custodial Agreement: Any agreement with respect to the Mortgage Loans
governing the retention of the originals of each Mortgage Note, Mortgage,
Assignment of Mortgage and other Mortgage Loan Documents, entered into among
Countrywide, the Servicer and JPMorgan.
Custodian: With respect to any Mortgage Loan and the related Collateral
File, JPMorgan Chase Bank and any successor custodian under any custodial
agreement which may be entered into between the Servicer, the Owner or any
subsequent Owner and the custodian named therein regarding the warehousing and
safekeeping of such Collateral File.
Cut-off Date: With respect to a Mortgage Loan Package, the first day of
the month in which the related Cutoff Date occurs or such other date as may be
mutually agreed to by the parties.
Default: Any condition or circumstance that is, or with notice or the
lapse of time or both, would become, an Event of Default.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: With respect to any Mortgage Loan, the first day of the month
on which Monthly Payments on such Mortgage Loan are due, exclusive of any days
of grace.
Due Period: With respect to each Remittance Date, the period beginning on
the second day of the month immediately preceding the month of such Remittance
Date and ending on the first day of the month of such Remittance Date.
Eligible Account: An account or accounts maintained with a Qualified
Depository.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.6.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, if any, fire and hazard
insurance premiums, and other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to any Mortgage Loan.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 7.1.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
Xxxxxx Xxx: Xxxxxx Xxx, formerly known as the Federal National Mortgage
Association, or any successor thereto.
Fidelity Bond: A fidelity bond to be obtained by the Servicer pursuant to
Section 3.12.
4
Xxxxxxx Mac: Xxxxxxx Mac, formerly known as the Federal Home Loan
Mortgage Corporation or any successor thereto.
Gross Margin: With respect to each ARM Loan, the fixed percentage amount
set forth in the related Mortgage Note as shown in the Mortgage Loan Schedule,
which amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
Index: With respect to any ARM Loan, the index set forth in the
applicable Mortgage Note which is added to the Gross Margin to determine the
Mortgage Interest Rate on each Interest Rate Adjustment Date. In the event the
Index becomes unavailable for any reason, the Servicer shall select an
alternative index, in accordance with the terms of the Mortgage Note, and such
alternative index shall thereafter be the Index for such Mortgage Loan.
Insurance Proceeds: Proceeds of any Primary Mortgage Insurance Policy,
any title policy, any hazard insurance policy or any other insurance policy
covering a Mortgage Loan or the related Mortgaged Property, including any
amounts required to be deposited in the Custodial Account pursuant to Section
3.10, to the extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Mortgagor in accordance with
Acceptable Servicing Procedures and Section 3.14.
Interest Rate Adjustment Date: As to any ARM Loan, the date specified in
a Mortgage Note on which the Mortgage Interest Rate for the related Mortgage
Loan is subject to adjustment.
Investor: With respect to any Mortgage Loan, a Person who has a
beneficial interest in, or is a record owner of, such Mortgage Loan or any
trustee acting on behalf of any such Person.
Late Collections: With respect to any Mortgage Loan, all amounts (other
than Monthly Advances) received during any Due Period, whether as late
payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds,
Condemnation Proceeds or otherwise, which represent late payments or
collections of Monthly Payments due but delinquent for a previous Due Period
and not previously recovered.
Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of the
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or in connection
with the sale of the Mortgaged Property if the Mortgaged Property is a REO
Property.
LPMI Fee: The portion of the Mortgage Interest Rate relating to a LPMI
Loan, which is set forth on the related Mortgage Loan Schedule, to be retained
by the Servicer to pay the premium due on a Primary Mortgage Insurance Policy
with respect to a LPMI Loan.
LPMI Loan: Any Mortgage Loan with respect to which the Servicer is
responsible for paying the premium due on the related Primary Mortgage
Insurance Policy with the proceeds generated by the LPMI Fee relating to such
Mortgage Loan, as set forth on the related Mortgage Loan Schedule.
5
Losses: Any claims, penalties, fines, forfeitures, damages, liabilities,
losses and expenses, including reasonable attorneys' fees.
Maturity Date: With respect to any Mortgage Loan, the maturity date of
the related Mortgage Note and Mortgage as specified therein.
MERS: Mortgage Electronic Registration, 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 (R) System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: Commencing with each Monthly Payment due on or after the
related Cutoff Date, the portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the
Determination Date required to be advanced by the Servicer pursuant to Section
4.3 on the Business Day immediately preceding the Remittance Date of the
related month.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan which is payable by a Mortgagor from time to time under the
related Mortgage Note.
Mortgage: The mortgage, mortgage deed, deed of trust or other instrument
creating a first lien on or first priority ownership interest on an
unsubordinated estate in fee simple in real property securing the Mortgage
Note; except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the mortgage, deed of trust or other instrument
securing the Mortgage Note may secure and create a first lien upon a leasehold
estate of the Mortgagor, as the case may be, including any riders, addenda,
assumption agreements or modifications relating thereto.
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan and, with respect to an ARM Loan,
as adjusted from time to time in accordance with the provisions of the related
Mortgage Note.
Mortgage Loan: Any mortgage loan that is sold pursuant to this Agreement,
as evidenced by such mortgage loan's inclusion on the related Mortgage Loan
Schedule, which mortgage loan includes, without limitation, the Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds (if applicable) and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding the servicing rights relating thereto. Unless
the context requires otherwise, any reference to the Mortgage Loans in this
Agreement shall refer to the Mortgage Loans constituting a Mortgage Loan
Package.
6
Mortgage Loan Package: Pools of Mortgage Loans sold to the Owner pursuant
the Master Mortgage Loan Purchase Agreement.
Mortgage Loan Remittance Rate: with respect to each Mortgage Loan, the
interest rate payable to the Owner on each Remittance Date which shall equal
the Mortgage Interest Rate less the Servicing Fee and any LPMI Fees, if
applicable.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Exhibit A, such schedule setting forth the following information with respect
to each Mortgage Loan: (1) Countrywide's Mortgage Loan number; (2) the
address, 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 or planned
unit development; (4) the purpose of the Mortgage Loan; (5) the Mortgagor's
social security number; (6) a code indicating the occupancy status of the
Mortgaged Property (i.e., owner-occupied, non-owner, second home); (7) a code
indicating whether the Mortgagor was self-employed at the time of origination;
(8) the Mortgage Interest Rate at origination; (9) the current Mortgage
Interest Rate; (10) whether the Mortgage Loan has Monthly Payments that are
interest only for a period of time; (11) the Servicing Fee Rate; (12) the
current Monthly Payment; (13) the original term to maturity; (14) the
remaining term to maturity; (15) the scheduled principal balance of the
Mortgage Loan as of the Cut-off Date; (16) the principal balance of the
Mortgage Loan at origination; (17) 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; (18) the LTV at origination
or, if the Mortgage Loan was secured by a second lien, the combined LTV at
origination; (19) the due date of the Mortgage Loan; (20) a PMI Policy insurer
name, percent and policy number (if applicable); (21) the type of appraisal;
(22) a code indicating whether the Mortgage Loan is a MERS Mortgage Loan; (23)
a code indicating whether the Mortgaged Property has any subordinate
financing; (24) a code indicating whether the Mortgage Loan is secured by a
leasehold interest in the related Mortgaged Property; (25) a code indicating
whether the Mortgage Loan is subject to a prepay penalty; (26) documentation
type; (27) a code indicating whether the Mortgage Loan is a buydown loan; (28)
first payment date and (29) FICO score.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage, including any riders, addenda, assumption
agreements or modifications relating thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Cooperative Loan, the underlying real property securing repayment of a
Mortgage Note, consisting of a single parcel of real estate considered to be
real estate under the laws of the State in which such real property is
located, which may include condominium units and planned unit developments,
improved by a residential dwelling; except that with respect to real property
located in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, a leasehold estate of the Mortgagor,
the term of which is equal to or longer than the term of the Mortgage. With
respect to a Cooperative Loan, the stock allocated to a dwelling unit in the
residential cooperative housing corporation that was pledged to secure such
Cooperative Loan and the related Cooperative Lease.
7
Mortgagor: The obligor on a Mortgage Note and their successors in title
to the Mortgage Property.
Nonrecoverable Advance: Any portion of any of a Monthly Advance or
Servicing Advance previously made or proposed to be made in respect of a
Mortgage Loan by the Servicer hereunder which, in the good faith judgment of
the Servicer, will not be ultimately recoverable from Late Collections.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President or a Vice President, the
Servicer, and delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer or an affiliate thereof, reasonably acceptable to the Owner.
Owner: Xxxxxxx Xxxxx Mortgage Company or any permitted successor owner of
any of the Mortgage Loans.
Pass-Through Transfer: The sale or transfer of some or all of the
Mortgage Loans to a REMIC or other trust to be formed as part of a publicly or
privately traded pass-through transaction retaining the Servicer as "servicer"
thereunder.
Periodic Rate Cap: With respect to each ARM Loan, the provision of each
Mortgage Note which provides for an absolute maximum amount by which the
Mortgage Interest Rate therein may increase or decrease on an Interest Rate
Adjustment Date above or below the Mortgage Interest Rate previously in
effect, equal to the rate set forth on the Mortgage Loan Schedule per
adjustment.
Permitted Instruments: Any one or more of the following obligations or
securities:
(i) direct obligations of, or obligations fully guaranteed
as to principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) repurchase obligations with respect to any security
described in clause (i) above, provided that the unsecured long-term
obligations of the party agreeing to repurchase such obligations are at
the time rated by Standard & Poor's Corporation in one of its three
highest rating categories;
(iii) federal funds, certificates of deposit, time deposits,
and bankers' acceptances of any bank or trust company incorporated under
the laws of the United States or any state, provided that the long-term
debt obligations of such bank or trust company (or, in the case of the
principal bank in a bank holding company system, the long-term debt
obligations of the bank holding company) at the date of acquisition
thereof have been rated by Standard & Poor's Corporation in one of its
three highest rating categories;
8
(iv) commercial paper of any corporation incorporated under
the laws of the United States or any state thereof which on the date of
acquisition has been rated by Standard & Poor's Corporation in its
highest short-term rating category; and
(v) any other obligation or security acceptable to Standard
& Poor's Corporation in respect of mortgage pass-through certificates
rated in one of its three highest rating categories, as evidenced by a
letter from Standard & Poor's Corporation to such effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Prepayment Charge: With respect to any Mortgage Loan, the prepayment
premium or charge, if any, required under the terms of the related Mortgage
Note to be paid in connection with a Principal Prepayment, to the extent
permitted by applicable law.
Prepayment Period: With respect to a Remittance Date, the prior calendar
month.
Prepayment Interest Shortfall Amount: With respect to any Remittance Date
and Mortgage Loan that was subject to a Principal Prepayment in full or in
part during the related Principal Prepayment Period, which Principal
Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan's Due
Date in such calendar month, the amount of interest (at the Mortgage Loan
Remittance Rate) that would have accrued on the amount of such Principal
Prepayment during the period commencing on the date as of which such Principal
Prepayment was applied to such Mortgage Loan and ending on the day immediately
preceding such Due Date, inclusive.
Primary Mortgage Insurance Policy: With respect to any Mortgage Loan, the
policy of primary mortgage guaranty insurance (including all endorsements
thereto), if any, issued by a Qualified Insurer with respect to such Mortgage
Loan, or any replacement policy.
Primary Mortgage Insurer: The named insurer under any Primary Mortgage
Insurance Policy.
Prime: As of any date of determination, the annual interest rate,
adjusted daily, published from time to time in The Wall Street Journal
(Western Edition) as the "PRIME RATE" in the "MONEY RATES" section.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan (other than Condemnation Proceeds, Insurance Proceeds, and
Liquidation Proceeds) which is received in advance of its scheduled Due Date
(not including any Prepayment Charge) and 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.
Proprietary Lease: With respect to any Cooperative Unit, a lease or
occupancy agreement between a Cooperative Corporation and a holder of related
Coop Shares.
9
Qualified Depository: (i) A depository, the long-term unsecured debt
obligations of which are rated by a nationally recognized statistical rating
agency in one of its two highest rating categories at the time of any deposit
therein, or (ii) a depository, the deposits of which are fully insured to the
maximum extent permitted by the FDIC or (iii) the corporate trust department
of a national bank; provided that they maintain a rating by a nationally
recognized statistical rating agency in the highest rating categories for
short term debt obligations.
Qualified Insurer: An insurance company duly qualified as such under the laws
of the states in which the Mortgaged Properties are located, duly authorized
and licensed in such states to transact the applicable insurance business and
to write the insurance provided, which insurer is approved in such capacity by
an Agency.
Reconstitution Agreements: The agreement or agreements entered into by
the Servicer and the Owner and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer or a Pass-Through
Transfer. Such agreement or agreements shall prescribe the rights and
obligations of the Servicer in servicing the related Mortgage Loans.
Reconstitution Date: The date or dates on which any or all of the Mortgage
Loans serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Whole Loan Transfer or Pass-Through Transfer
pursuant to Section 5.9 hereof. On such date, the Mortgage Loans transferred
shall cease to be covered by this Agreement and the Servicer shall cease to
service those Mortgage Loans under this Agreement in accordance with the
termination provisions set forth in Section 5.9 hereof.
Remittance Advice Date: The 10th day of each month or, if such 10th day
is not a Business Day, the first Business Day immediately following such day.
Remittance Date: With respect to each Mortgage Loan: the eighteenth
(18th) day of any month, beginning with the eighteenth (18th) day of the month
next following the month in which the related Cut-off Date occurs, or if such
eighteenth (18th) day is not a Business Day, the first Business Day
immediately following such day.
REO Property: A Mortgaged Property acquired in foreclosure or by deed in
lieu of foreclosure, as described in Section 3.13.
Security Agreement: With respect to any Cooperative Loan, the agreement
between the owner of the related Coop Shares and the originator of the related
Mortgage Note that defines the terms of the security interest in such Coop
Shares and the related Proprietary Lease.
Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership or its permitted successor in interest or any successor to the
Servicer as permitted under this Agreement.
Servicing Advances: All customary, reasonable, and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) that are incurred by the Servicer
10
in the performance of its servicing obligations hereunder, including, but not
limited to, the cost of (i) the preservation, restoration, and protection of
the Mortgaged Property, (ii) any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage, and (iv) compliance with the obligations of this Agreement,
including without limitation under Sections 3.8 and 3.10.
Servicing Fee: With respect to each Mortgage Loan being serviced and
administered pursuant to this Agreement, the amount of the annual fee payable
to the Servicer as compensation for servicing and administering such Mortgage
Loan and for managing and disposing of REO Property in accordance with the
terms of this Agreement. For each Mortgage Loan, such fee shall, for a period
of one full month, be equal to one-twelfth of the product of (i) the Servicing
Fee Rate, multiplied by (ii) the outstanding Unpaid Principal Balance of such
Mortgage Loan as of the first day of such month, and shall be payable in
accordance with Section 5.3. With respect to any REO Property that is being
managed by the Servicer in accordance with Section 3.13 of this Agreement,
such fee shall be payable through and until the disposition of such REO
Property or the transfer of the REO Property to the Owner for management by
the Owner, and the amount of such fee shall be based upon the Unpaid Principal
Balance of the related Mortgage Loan at the time of the related foreclosure.
Servicing Fee Rate: As to (i) each Mortgage Loan that is an ARM Loan,
..25% per annum with respect to each Due Period occurring before the initial
Interest Rate Adjustment Date, and with respect to 5/1, 7/1 and 10/1 Loans,
..375% per annum thereafter, and (ii) each Mortgage Loan that is not an ARM
Loan, .25% per annum.
Servicing File: As to each Mortgage Loan, the copies of the Collateral
Documents, as well as the credit and closing packages, disclosures, copies of
the all other files, books, records and documents necessary to (a) establish
the eligibility of the Mortgage Loan for insurance by a Qualified Insurer, if
any; and/or (b) service the Mortgage Loan in accordance with Acceptable
Servicing Procedures, including the documents listed on Exhibit B hereto, some
of which maybe held by the Custodian.
Unpaid Principal Balance: With respect to each Mortgage Loan as of any
date of determination: (i) the unpaid principal balance of the Mortgage Loan
at the Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Owner with respect to the related Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Whole Loan Transfer: The sale or transfer by the Owner of some or all of
the Mortgage Loans in a whole loan or participation certificate format
pursuant to a Reconstitution Agreement retaining the Servicer as "servicer"
thereunder.
3/1 Loan: An ARM Loan where the Mortgage Interest Rate is fixed for the
first 36 months.
5/1 Loan: An ARM Loan where the Mortgage Interest Rate is fixed for the
first 60 months.
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7/1 Loan: An ARM Loan where the Mortgage Interest Rate is fixed for the
first 84 months.
10/1 Loan: An ARM Loan where the Mortgage Interest Rate is fixed for the
first 120 months.
Any capitalized term used herein and not otherwise defined, shall have the
meaning assigned to such term in the Master Mortgage Loan Purchase Agreement.
17.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 2.1 Representations and Warranties of the Servicer
With respect to a Mortgage Loan Package, the Servicer represents,
warrants and covenants to the Owner that, as of the related Closing Date:
(a) The Servicer is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is organized and is qualified
and licensed to transact business in and is in good standing under the laws of
each state where each Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loan in accordance with the terms of this Agreement. The execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Servicer and the
consummation of the transactions contemplated hereby have been duly and
validly authorized. This Agreement evidences the valid, binding and
enforceable obligation of the Servicer; and all requisite action has been
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its term;
(b) The Servicer has the full power and authority to (i) perform and
enter into and consummate all transactions contemplated by this Agreement and
(ii) to service each Mortgage Loan;
(c) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer, which is in the
business of servicing loans;
(d) Neither the consummation of the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Servicer's certificate of limited partnership
or partnership agreement or result in a material breach of any legal
restriction or any material agreement or instrument to which the Servicer is
now a party or by which it is bound, or constitute a material default or
result in an acceleration under any of the foregoing, or result in the
violation of any material law, rule, regulation, order, judgment or decree to
which the Servicer or its property is subject;
(e) The Servicer is an approved servicer for Xxxxxx Xxx and Xxxxxxx Mac
in good standing. No event has occurred, including a change in insurance
coverage, which would make the Servicer unable to comply with Xxxxxx Mae or
Xxxxxxx Mac eligibility requirements;
(f) There is no action, suit, proceeding, investigation or litigation
pending or, to the Servicer's knowledge, threatened, which either in any one
instance or in the aggregate, if determined adversely to the Servicer would
materially and adversely affect the Servicer's ability to service the Mortgage
Loans hereunder in accordance with the terms hereof, or the Servicer's ability
to perform its obligations under this Agreement;
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(g) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer, of or compliance by the Servicer with, this
Agreement or the consummation of the transactions contemplated by this
Agreement, or if required, such consent, approval, authorization or order has
been obtained prior to the related Closing Date;
(h) The Servicer acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Servicer, for accounting and tax
purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(i) The Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement;
(j) The Servicer is a member of MERS in good standing, and will comply in
all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans registered with MERS;
(k) The Servicer has serviced, and shall at all times service, the Mortgage
Loans in accordance with the Acceptable Servicing Procedures, the Mortgage
Note and applicable federal, state and local laws and regulations,
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity
or disclosure laws, and the Servicer shall maintain in its possession,
available for the Owner's inspection and shall deliver to the Owner upon
demand, evidence of compliance with all such requirements. 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;
(l) The Servicer has fully furnished (or caused to be 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, or any their successors and assigns (three of the
credit repositories), on a monthly basis; and
(m) No statement, report or other document prepared and furnished by the
Servicer or to be prepared and furnished by the Servicer pursuant to this
Agreement in connection with the transactions contemplated hereby contain or
will contain any untrue statement of fact or omit to state a fact necessary to
make the statements contained therein not misleading.
Section 2.2 Remedies for Breaches of Representations or Warranties.
The Servicer shall indemnify the Owner and hold it harmless against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and other costs and expenses resulting from
a breach of the Servicer's representations and warranties contained in Section
2.1 that materially and adversely affects the value of one or more of the
Mortgage Loans. The obligations of the Servicer set forth in this Section 2.2
to indemnify the Owner as provided in this Section 2.2 constitute the sole
remedies of the Owner with respect to a breach of the foregoing
representations and warranties.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.1 Identification of Mortgage Loans; Servicer to Act as Servicer
(a) The Servicer, as independent servicer, shall commence servicing and
administering each Mortgage Loan on behalf of the Owner from and after the
Cut-off Date in accordance with the terms and conditions of this Agreement and
Acceptable Servicing Procedures. Except as otherwise expressly provided in
this Agreement, the Servicer shall have full power and authority, acting
alone, to do any and all things reasonably consistent with the terms of this
Agreement, including but not limited to the following: (i) to execute and
deliver, on behalf of the Owner, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that the Servicer shall not take any action that is
inconsistent with or prejudices the interests of the Owner under this
Agreement. The Servicer further is authorized and empowered by the Owner, in
its own name when the Servicer, believes it appropriate in its best 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 Owner, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording
of a Mortgage in the name of MERS, solely as nominee for the Trustee and its
successors and assigns. The Servicer shall at all times act in the best
interests of the Owner in performing its obligations under this Agreement.
(i) (b) The documents comprising the Collateral File relating to
each Mortgage Loan serviced hereunder and that are retained by the
Servicer pursuant to the terms hereof, together with all other documents
with respect to each such Mortgage Loan which are prepared by or which
come into the possession of the Servicer, shall immediately vest in the
Owner and shall be held and maintained in trust by the Servicer at the
will of the Owner and in a custodial capacity only. The documents
comprising each Collateral File and all related documents which come into
the possession of the Servicer and are so held by the Servicer shall be
segregated from the other books and records of the Servicer and shall be
appropriately marked to clearly reflect the ownership interest of the
Owner in such Collateral File and related documents. The Servicer shall
release its custody of any such documents only in accordance with written
instructions from the Owner, unless such release is required as
incidental to the Servicer's servicing of the Mortgage Loans.
The Servicer shall maintain with respect to each Mortgage Loan and
shall make available for inspection by the Owner or its designee the related
Servicing File during the time the Owner retains ownership of a Mortgage Loan
and thereafter in accordance with Applicable Law. The Servicer shall keep at
its servicing office books and records in which, subject to such reasonable
regulations as it may prescribe, the Servicer shall note transfers of Mortgage
Loans. No transfer of a Mortgage Loan may be made unless such transfer is in
compliance with the
15
terms hereof. For the purposes of this Agreement, the Servicer shall be under
no obligation to deal with any person with respect to this Agreement or the
Mortgage Loans unless the books and records show such person as the owner of
the Mortgage Loan. The Owner may, subject to the terms of this Agreement, sell
and transfer one or more of the Mortgage Loans, provided, however, that in no
event shall there be more than four Persons at any given time having the
status of "Owner" hereunder. The Owner also shall advise the Servicer of the
transfer. Upon receipt of notice of the transfer, the Servicer shall xxxx its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Owner from its obligations hereunder
with respect to the Mortgage Loans sold or transferred. If the Servicer
receives written notification of a transfer less than five (5) Business Days
before the monthly Determination Date, the Servicer's duties to remit and
report to the new purchaser(s) as required by Section 5.9 hereof shall begin
with the first Determination Date after the Reconstitution Date.
(ii) (c) Consistent with the terms of this Agreement and subject to
the REMIC Provisions if the Mortgage Loans have been transferred to a
REMIC, the Servicer may waive, modify or vary any term of any Mortgage
Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor if in the
Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Owner. In the event of any such modification which permits the deferral
of interest or principal payments on any Mortgage Loan, the Servicer
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 5.3, 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 Servicer shall be entitled to reimbursement
for such advances to the same extent as for all other advances made
pursuant to Section 5.3. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and
empowered, to execute and deliver on behalf of itself and the Owner, all
instruments of satisfaction or cancellation, or of partial or full
release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Servicer, the Owner shall furnish the Servicer
with any powers of attorney and other documents necessary or appropriate
to enable the Servicer to carry out its servicing and administrative
duties under this Agreement.
(iii) (d) As to each ARM Loan, the Servicer shall make periodic
Mortgage Interest Rate and Monthly Payment adjustments, as applicable, in
strict compliance with (i) the terms of the Mortgage and Mortgage Note,
(ii) all applicable law, and (iii) Acceptable Servicing Procedures.
(b) Section 3.2 Liquidation of Mortgage Loans
(i) In the event that any payment due under any Mortgage Loan is not
paid when the same becomes due and payable, or in the event the Mortgagor
fails to perform
16
any other covenant or obligation under the Mortgage Loan and such failure
continues beyond any applicable grace period, the Servicer shall take
such action as (1) the Servicer would take under similar circumstances
with respect to a similar mortgage loan held for its own account for
investment, (2) shall be consistent with Accepted Servicing Practices,
and (3) the Servicer shall determine prudently to be in the best interest
of the Owner. In the event that any payment due under any Mortgage Loan
remains delinquent for a period of 90 days or any other default continues
for a period of 30 days beyond the expiration of any grace or cure
period, the Servicer shall commence foreclosure proceedings, the Servicer
shall notify the Owner in writing of the Servicer's intention to do so,
and the Servicer shall not commence foreclosure proceedings if the Owner
objects to such action within ten (10) Business Days of receiving such
notice. In the event the Owner objects to such foreclosure action, the
Servicer shall not be required to make Monthly Advances with respect to
such Mortgage Loan, pursuant to Section 4.3, and the Servicer's
obligation to make such Monthly Advances shall terminate on the 90th day
referred to above. In such connection, the Servicer shall from its own
funds make all necessary and proper Servicing Advances, provided,
however, that the Servicer shall not be required to expend its own funds
in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a)
that such preservation, restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to the Owner after
reimbursement to itself for such expenses and (b) that such expenses will
be recoverable by it either through Liquidation Proceeds (respecting
which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 3.5) or through Insurance Proceeds
(respecting which it shall have similar priority).
(ii)
(iii) Section 3.3 Collection of Mortgage Loan Payments
(iv)
(v) Continuously from the date hereof until the principal and
interest on all Mortgage Loans being serviced hereunder are paid in full
or this Agreement is otherwise terminated, the Servicer will proceed
diligently to collect all payments due under each of such Mortgage Loans
when the same shall become due and payable. With respect to those
Mortgage Loans, if any, as to which the Servicer collects Escrow
Payments, the Servicer will ascertain or estimate, as the case may be,
annual ground rents, taxes, assessments, water rates, fire and hazard
insurance premiums, mortgage insurance premiums and all other charges
that, as provided in any Mortgage, will become due and payable so that
the Escrow Payments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable. The Servicer shall
not be required to institute or join in litigation with respect to
collection of any payment (whether under a Mortgage, Mortgage Note,
Primary Mortgage Insurance Policy or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if in
its reasonable judgment it believes that it will be unable to enforce the
provision of the Mortgage or other instrument pursuant to which payment
is required.
17
(c) Section 3.4 Establishment of Custodial Account; Deposits in
Custodial Account
(i) (a) The Servicer shall segregate and hold all funds collected
and received pursuant to the Mortgage Loans separate and apart from any
of its own funds and general assets and shall establish and maintain one
or more Custodial Accounts (collectively, with respect to the accounts
maintained by any one Servicer, its "Custodial Account"), in the form of
time deposit or demand accounts, which may be interest bearing, titled,
with respect to the Servicer, "Countrywide Home Loans Servicing LP, in
trust for Xxxxxxx Xxxxx Mortgage Company as Owner, and any successor
Owner.
(ii) (b) With respect to each Mortgage Loan, the Servicer shall not
later than the end of the second Business Day following receipt thereof,
deposit in the Custodial Account and retain therein the following
payments and collections received by the Servicer subsequent to the
Cut-off Date:
(i) (i) all payments on account of principal, including
Principal Prepayments, actually collected by the Servicer on the
Mortgage Loans;
(ii) (ii) all payments on account of interest actually
collected by the Servicer on the Mortgage Loans less the Servicing Fee;
(iii)(iii) all Liquidation Proceeds;
(iv) (iv) all Insurance Proceeds, other than Insurance
Proceeds to be held in the Escrow Account and applied to the restoration
and repair of the Mortgaged Property or released to the Mortgagor in
accordance with Acceptable Servicing Procedures;
(v) (v) all Condemnation Proceeds which are not released to
the Mortgagor in accordance with the Owner's written consent and
Acceptable Servicing Procedures and Section 3.14;
(vi) any amounts with respect to Monthly Advances required
to be deposited in the Custodial Account pursuant to Section 4.3;
(vi) (vii) any amount required to be deposited in the
Custodial Account pursuant to Sections 3.1(c), 3.1(d), 3.4(c), 3.10(a)
or (b), 3.11(b), 3.13(c), (d) and (f), and 4.1(b) of this Agreement; and
18
(vii) the Prepayment Interest Shortfall Amount, if any, for
the month of distribution (such deposit shall be made from the
Servicer's own funds, without reimbursement therefor up to a maximum
amount per month equal to the lesser of one half of (a) one-twelfth of
the product of (i) the Servicing Fee Rate and (ii) the Unpaid Principal
Balance of such Mortgage Loans, or (b) the aggregate Servicing Fee
actually received for such month for the Mortgage Loans)
(c) The Servicer may cause the funds on deposit from time to time in the
Custodial Account to be invested in Permitted Instruments, which investments
shall mature not later than the Business Day immediately preceding the
applicable Remittance Date next following the date of such investment. All
such investments shall be made in the name of the Servicer or its nominee. All
income and gain realized from any such investment shall be for the benefit of
the Servicer and shall be subject to its withdrawal or order from time to
time. The Servicer shall indemnify the Owner for any and all losses incurred
in respect of any such investment by the Servicer, and the amount of any
losses incurred in respect of any such investment shall be deposited in the
Custodial Account by the Servicer out if its own funds immediately, without
reimbursement therefor.
(d) It is understood and agreed that payments in the nature of Ancillary
Income need not be deposited by the Servicer in the Custodial Account.
(d) Section 3.5 Permitted Withdrawals from the Custodial Account
(i) (a) The Servicer may, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) (i) to make payments and distributions to the Owner in the
amounts and in the manner provided for in Section 4.1;
(ii) to reimburse itself for Monthly Advances made by the
Servicer from its own funds pursuant to Section 4.3, the Servicer's
right to reimburse itself pursuant to this subclause (ii) being limited
to amounts received on the related Mortgage Loan which represent late
payments of principal and/or interest respecting which any such Monthly
Advance was made and such other amounts as are collected by the Servicer
from the related Mortgagor or otherwise relating to the Mortgage Loan;
(or to amounts received on the Mortgage Loans as a whole in the event
that such Monthly Advance is made to pay a shortfall in a Monthly
Payment made by a Mortgagor entitled to relief under the Servicemembers
Civil Relief Act). Notwithstanding the foregoing, the Servicer may
reimburse itself for Monthly Advances from any funds in the Custodial
Account if it has determined that such funds are Nonrecoverable Advances
(or if all funds, with respect to the related Mortgage Loan, have
previously been remitted to the Owner);
(iii) to reimburse itself for unreimbursed Servicing
Advances and any unpaid Servicing Fees, Servicer's right to reimburse
itself pursuant to this subclause (ii) with respect to any Mortgage Loan
being limited to related proceeds from Liquidation
19
Proceeds, Condemnation Proceeds, Primary Mortgage Insurance Proceeds and
Other Insurance Proceeds; provided that the Servicer may reimburse itself
from any funds in the Custodial Account for Servicing Advances and
Servicing Fees if all funds with respect to the related Mortgage Loan
have previously been remitted to Owner; provided, however, that the
Servicer may reimburse itself for Servicing Advances which it has
determined are Nonrecoverable Advances.
(ii) (iv) to pay itself any Servicing Fee and other
servicing compensation not paid to the Servicer pursuant to Section 5.3;
(iii)(v) to pay to itself any interest earned on funds
deposited in the Custodial Account;
(iv)
(v) (vi) if there shall be amounts deposited in the
Custodial Account in error, including the Servicing Fee and other
servicing compensation not required to be deposited therein, to withdraw
such amounts; and
(vi) (vii) to clear and terminate the Custodial Account
upon the termination of this Agreement in accordance with Article 8.
(e) Section 3.6 Establishment of Escrow Account; Deposits in Escrow Account;
Escrow Analysis
(i) (a) The Servicer shall segregate and hold all funds collected
and received pursuant to the Mortgage Loans which constitute Escrow
Payments separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Escrow Accounts
(collectively, with respect to the accounts maintained by any one
Servicer, its "Escrow Account"), in the form of time deposit or demand
accounts, which may be interest bearing, titled, with respect to the
Servicer, "Countrywide Home Loans Servicing LP, in trust for Xxxxxxx
Xxxxx Mortgage Company, as Owner, and any successor Owner, and certain
Mortgagors." The Escrow Account shall be an Eligible Account.
(ii) (b) The Servicer shall not later than the end of the second
Business Day following receipt thereof (or sooner if required by
applicable law) deposit in the Escrow Account maintained by the Servicer
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, and (ii) all amounts
representing proceeds of any hazard insurance policy which are to be
applied to the restoration or repair of any Mortgaged Property. The
Servicer shall make withdrawals from the Escrow Account maintained by the
Servicer only in accordance with Section 3.7. The Servicer shall be
20
entitled to retain any interest earned on funds deposited in the Escrow
Account maintained by the Servicer other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required
by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account maintained by the
Servicer may not bear interest or that the interest earned on such
escrowed funds is insufficient for such purpose.
(f) Section 3.7 Permitted Withdrawals from the Escrow Account
Withdrawals from the Escrow Account maintained by the Servicer may be
made by the Servicer only (a) to effect timely payments of taxes, assessments,
water rates, insurance premiums, fire and hazard insurance premiums or other
items constituting Escrow Payments for the related Mortgage; (b) to reimburse
the Servicer for any Servicing Advance made by the Servicer pursuant to
Sections 3.8, 3.10 and 3.11 with respect to a related Mortgage Loan, the
Servicer's right to reimburse itself pursuant to this clause (b) being limited
to the amounts as may be collected by the Servicer from the related Mortgagor
or from the related insurer; (c) to refund to any Mortgagor any funds found to
be in excess of the amounts required under the terms of the related Mortgage
Loan; (d) for transfer to the Custodial Account in accordance with the terms
of this Agreement; (e) for application to restoration or repair of the related
Mortgaged Property in accordance with the provisions of Section 3.14, (f) to
pay to a Mortgagor, to the extent required by Applicable Requirements,
interest on the funds deposited in the Escrow Account; (g) to pay to itself
any interest earned on funds deposited in the Escrow Account (and not required
to be paid to the related Mortgagor), (h) to remove funds inadvertently placed
in the Escrow Account by the Servicer; or (i) to clear and terminate the
Escrow Account upon the termination of this Agreement, in accordance with
Article 8.
(g) Section 3.8 Payment of Taxes, Insurance and Other Charges
With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of property taxes, assessments and other charges
which are or may become a lien upon the Mortgaged Property and the status of
Primary Mortgage Insurance Policy premiums, if any, and fire and hazard
insurance coverage and flood insurance, all as required hereunder. If a
Mortgage Loan requires Escrow Payments, the Servicer 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 in a manner consistent with Acceptable Servicing Procedures,
employing for such purpose Mortgagor deposits in the Escrow Account. The
Servicer shall, with respect to each Mortgage Loan for which Escrow Payments
are maintained, conduct an escrow analysis in accordance with industry
standard procedures. If a Mortgage Loan does not require Escrow Payments, or
if there are insufficient funds in the related Escrow Account, the Servicer
shall cause all such bills to be paid on a timely basis and shall from its own
funds, if necessary, make a Servicing Advance to make timely payment of all
such bills. The Servicer shall monitor the payment status of such charges
(including renewal premiums) by the related Mortgagor, and shall effect
payment thereof in a manner consistent with Acceptable Servicing Procedures,
and in all events prior to the foreclosure of any lien against the Mortgaged
Property resulting from non-payment of such property taxes, assessments and
other charges and prior to the termination of any such insurance coverage.
21
(h) Section 3.9 Transfer of Custodial Accounts and Escrow Accounts
The Servicer may from time to time transfer the Custodial Account or the
Escrow Account maintained by it to a different depository institution,
provided that each such account shall be and remain an Eligible Account.
(i) Section 3.10 Maintenance of Hazard Insurance
(i) The Servicer shall cause to be maintained, with a Qualified
Insurer for each Mortgage Loan serviced by it, fire and hazard insurance
with extended coverage customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements
of Xxxxxx Mae and Xxxxxxx Mac, in an amount which is at least equal to
the lesser of (i) 100% of the maximum insurable value of the improvements
securing the Mortgage Loan or (ii) the Unpaid Principal Balance of the
Mortgage Loan. If the Mortgaged Property is in an area then identified on
a flood hazard boundary map or flood insurance rate map issued by the
Federal Emergency Management Agency as having special flood hazards (and
such flood insurance is available), the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration with a
generally acceptable insurance carrier acceptable to Xxxxxx Mae or
Xxxxxxx Mac. Such flood insurance shall be in an amount representing
coverage not less than the least of (i) the outstanding principal balance
of the Mortgage Loan, (ii) the full insurable value of the improvements
securing such Mortgage Loan or (iii) the maximum amount of insurance
available under the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, each as amended. The Servicer shall also
maintain on each REO Property with an insurer acceptable to Xxxxxx Mae or
Xxxxxxx Mac (x) fire and hazard insurance with extended coverage in an
amount that is at least equal to the maximum insurable value of the
improvements securing the Mortgage Loan that are a part of such property,
(y) liability insurance and (z) to the extent required and available
under the National Flood Insurance Act of 1968, the Flood Disaster
Protection Act of 1973, each as amended, or other applicable federal law,
flood insurance in an amount as provided above. Any costs incurred by the
Servicer maintaining insurance under this Section 3.10 shall be
recoverable as Servicing Advances. Any amounts collected by the Servicer
under any such policies shall be paid over or applied by the Servicer in
accordance with Acceptable Servicing Procedures for the restoration or
repair of the Mortgaged Property subject to the related Mortgage, for
release to the Mortgagor in accordance with Acceptable Servicing
Procedures, or for application in reduction of the Mortgage Loan. Any
such amounts shall be deposited in the Custodial Account and subject to
withdrawal pursuant to Section 3.5. It is understood and agreed that no
earthquake or other additional insurance is required to be maintained by
the Servicer hereunder in connection with any Mortgage Loan or Mortgaged
Property, other than pursuant to applicable laws and regulations that are
at any time in force and require such additional insurance. All policies
required hereunder shall be endorsed with standard mortgagee clauses with
loss payable to the Servicer, and shall provide for at least 30 days
prior written notice to the Servicer of any cancellation, reduction in
amount, or material change in coverage. The Servicer shall not interfere
with the Mortgagor's freedom of choice
22
in selecting either his insurance carrier or agent upon any policy
renewal; provided, however, upon any such policy renewal, the Servicer
shall not accept any such insurance policies, unless the insurers are
acceptable to Xxxxxx Mae or Xxxxxxx Mac and are licensed to do business
in the jurisdiction in which the Mortgaged Property is located.
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 and Xxxxxxx Mac, the Servicer shall notify the Owner and the related
Mortgagor, and shall use its best efforts, as permitted by applicable law, to
obtain from another Qualified Insurer a replacement hazard insurance policy
substantially and materially similar in all respects to the original policy.
In no event, however, shall a Mortgage Loan be without a hazard insurance
policy at any time.
If a Mortgage is secured by a unit in a condominium project, the Servicer
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 requirements of Xxxxxx Mae, Xxxxxxx Mac, and
secure from the owner's association its agreement to notify the Servicer
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.
Notwithstanding anything set forth in the preceding paragraphs, the
Servicer agrees to indemnify the Owner for any claims, losses, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
any other costs, fees and expenses that the Owner may sustain in any way
related to the failure of the Mortgagor (or the Servicer) to maintain hazard
insurance or flood insurance with respect to the related Mortgaged Property
which complies with the requirements of this section.
(j) Section 3.11 Maintenance of Primary Mortgage Insurance Policies;
Collections Thereunder
(a) The parties acknowledge that not all Mortgage Loans will be covered
by Primary Mortgage Insurance. In the event that any Mortgage Loans are or
become covered by Primary Mortgage Insurance, the provisions set forth below
shall apply.
(b) If a Mortgage Loan is covered by a Primary Mortgage Insurance Policy
as of the Cut-off Date, or if a Mortgage Loan becomes covered by a Primary
Mortgage Insurance Policy pursuant to subsection 3.11(c) below, the Servicer
shall cause the premium for each such Primary Mortgage Insurance Policy,
beginning with the premium due after the Cut-off Date in the case of any
Mortgage Loan covered by a Primary Insurance Policy prior to the Cut-off Date,
to be paid on a timely basis and shall from its own funds, if necessary, make
a Servicing Advance to pay the premium on a timely basis. The Servicer will
not cancel or refuse to renew any such Primary Mortgage Insurance Policy that
is required to be kept in force under any Mortgage and pursuant to this
subsection, or pursuant to subsection 3.11(c) below, unless a replacement
Primary Mortgage Insurance Policy for such canceled or non renewed policy is
obtained from and maintained with an insurer that satisfies the standards set
forth in this subsection. The Servicer shall not take any action or fail to
take any action that would result in non-coverage under any applicable Primary
Mortgage Insurance Policy of any loss which, but for the actions of the
Servicer, would have been covered
23
thereunder. In connection with any assumption or substitution agreement
entered into or to be entered into pursuant to Section 4.1, the Servicer shall
promptly notify the insurer under the related Primary Mortgage Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions which may be required
by such insurer as a condition to the continuation of coverage under such
Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance Policy
is terminated as a result of such assumption or substitution of liability, the
Servicer shall obtain a replacement Primary Mortgage Insurance Policy as
provided above.
(c) As part of its activities as servicer of the Mortgage Loans, the
Servicer agrees to prepare and present, on behalf of itself and the Owner,
claims under any Primary Mortgage Insurance Policy in a timely fashion in
accordance with the terms thereof and, in this regard, to take such reasonable
action as shall be necessary to permit recovery under any Primary Mortgage
Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to Section
3.4, any amounts collected by the Servicer under any Primary Mortgage
Insurance Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 3.5, and remitted to the Owner on the
appropriate Remittance Date.
Section 3.12 Fidelity Bond; Errors and Omissions Insurance
The Servicer shall maintain, at its own expense, with responsible
companies that meet the requirements of Xxxxxx Mae or Xxxxxxx Mac, a blanket
fidelity bond and an errors and omissions insurance policy, with broad
coverage on all officers, employees, agents and other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the Mortgage Loans (collectively, the "Servicer Employees"). Any
such fidelity bond and errors and omissions insurance shall be in the form of
the Mortgage Banker's Blanket Bond and shall protect and insure the Servicer
against losses, including forgery, theft, embezzlement, fraud, errors and
omissions, failure to maintain any insurance policies required pursuant to
this Agreement, and negligent acts of such Servicer Employees. Such fidelity
bond shall also protect and insure the Servicer 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 3.12 requiring such fidelity bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement. The terms of any such fidelity bond and errors and
omissions insurance policy shall be at least equal to the corresponding
amounts required by Xxxxxx Mae in the Xxxxxx Xxx Selling and Servicing Guide,
or by Xxxxxxx Mac in the Xxxxxxx Mac Seller's and Servicer's Guide. Upon the
request of the Owner, the Servicer shall cause to be delivered to the Owner a
certified true copy of 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 30 days prior written notice to the Owner.
(k) Section 3.13 Title, Management and Disposition of Real Estate
Owned
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(i) (a) In the event that title to any Mortgaged Property is
acquired in foreclosure or by deed in lieu of foreclosure ("REO
Property"), the deed or certificate of sale shall be taken in the name of
the Servicer for the benefit of the Owner or, in the event the Owner is
not authorized or permitted to hold title to real property in the state
where the REO Property is located, or would be adversely affected under
the "doing business" or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or
Persons as shall be consistent with an Opinion of Counsel obtained by the
Servicer from 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 Owner shall acknowledge in writing that such title
is being held as nominee for the Owner.
(ii) (b) The Servicer shall manage, conserve, protect, and operate
each REO Property solely for the purpose of its prompt disposition and
sale. The Servicer shall either itself or through an agent selected by
the Servicer, manage, conserve, protect, and operate the REO Property in
accordance with Acceptable Servicing Procedures. The Servicer shall
attempt to sell the same (and may temporarily rent the same for a period
not greater than one year) on such terms and conditions as the Servicer
deems to be in the best interest of the Owner. In the event that the
Owner elects to manage an REO Property, the Owner shall, prior to
assuming such management, reimburse the Servicer for all unreimbursed
Servicing Advances, Nonrecoverable Advances and Servicing Fees related to
such REO Property.
The Servicer shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within three
years after title has been taken to such REO Property, not later than the end
of the third taxable year after the year of its acquisition unless (i) (A) 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 Servicer
determines, and gives an appropriate notice to the Owner to such effect, 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 Servicer shall report
monthly to the Owner as to the progress being made in selling such REO
Property and (ii) if, with the written consent of the Owner, a purchase money
mortgage is taken in connection with such sale, such purchase money mortgage
shall name the Servicer as mortgagee, and such purchase money mortgage shall
not be held pursuant to this Agreement, but instead a separate participation
agreement among the Servicer and Owner shall be entered into with respect to
such purchase money mortgage.
Notwithstanding anything to the contrary contained in this Section 3.13,
in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Owner otherwise requests, an environmental inspection or review of
such Mortgaged Property to be conducted by a qualified inspector shall be
arranged by the Servicer. Upon completion of the inspection, the Servicer
shall provide the Owner with a written report of such environmental
inspection. In the event that the environmental inspection report
25
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, the Servicer shall not proceed with foreclosure or
acceptance of a deed in lieu of foreclosure. In the event that the
environmental inspection report is inconclusive as to the whether or not the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
the Servicer shall not, without the prior approval of the Owner, proceed with
foreclosure or acceptance of a deed in lieu of foreclosure. In the event the
Owner or its designee directs the Servicer not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
for all customary, reasonable, and necessary "out of pocket" costs and
expenses that are incurred by the Servicer with respect to the related
Mortgaged Property from the Custodial Account, as though such costs were
Servicing Advances, pursuant to Section 3.4 hereof.
(iii)
(iv) (c) The Servicer shall hold all funds collected and received in
connection with the operation of REO Property separate and apart from its
own funds or general assets, in the Custodial Account.
(v) (d) The Servicer shall deposit, or cause to be deposited not
later than the end of the second Business Day following receipt thereof
in the Custodial Account maintained by it all revenues received with
respect to the conservation and disposition of any REO Property for
distribution to the Owner pursuant to the provisions of Section 4.1.
(vi) (e) The Servicer shall also maintain on each REO Property fire
and hazard insurance with extended coverage, liability insurance, and
flood insurance in accordance with the provisions of Sections 3.8 and
3.10 hereof.
(vii) (f) The Servicer shall undertake to sell the REO Property at
such price and upon such terms and conditions as the Owner shall approve
that shall maximize the proceeds from the disposition of the REO
Property. The proceeds of sale of the REO Property shall be promptly
deposited in the Custodial Account and the Servicer shall xxxx the Owner
in accordance with Section 3.5(b) for such expenses and for any related
unreimbursed Servicing Advances, unreimbursed Nonrecoverable Advances,
unpaid Servicing Fees, unpaid property management fees.
(l) Section 3.14 Application of Proceeds of Insurance to Repair
or Restoration
The Servicer shall collect the proceeds from all policies of insurance
required to be maintained pursuant to Section 3.10 with respect to all losses
that may occur. The Servicer may remit such proceeds to the Mortgagor toward
the restoration or repair of the related property in a manner, and shall
otherwise take such actions in connection with such restoration and repair, as
shall be consistent with Acceptable Servicing Procedures.
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The Servicer need not obtain the approval of the Owner prior to releasing
any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such
release is in accordance with Accepted Servicing Practices. For claims
greater than the lesser of $15,000, at a minimum the Servicer shall comply
with the following conditions in connection with any such release of
Insurance Proceeds or Condemnation Proceeds:
(1) The Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of
any required approvals with respect thereto;
(2) the Servicer shall take all steps necessary to
preserve the priority of the lien of the Mortgage,
including, but not limited to requiring waivers with
respect to mechanics' and materialmen's liens;
(3) the Servicer shall verify that the Mortgage Loan is
not in default; and
(4) pending repairs or restoration, the Servicer shall
place the Insurance Proceeds or Condemnation Proceeds
in the Escrow Account.
If the Owner is named as an additional loss payee, the Servicer is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Owner.
Section 3.15 Inspections
The Servicer or its authorized representative shall conduct inspections
of Mortgaged Properties at such times and in a manner consistent with
Acceptable Servicing Procedures. For any Mortgage Loan that is not insured by
a Primary Mortgage Insurance Policy, in the event such Mortgage Loan becomes
45 days delinquent, (a) the Servicer shall inspect the related Mortgage
Property as promptly as practicable after the 45th day of delinquency, (b) the
Servicer may perform an inspection at such other times and at such intervals
as the Servicer deems appropriate and (c) the Servicer shall immediately
perform an inspection upon any abandonment of the related Mortgaged Property.
For any Mortgage Loan that is insured by a Primary Mortgage Insurance Policy,
the Servicer shall inspect the related Mortgaged Property as directed by the
related Primary Insurer; provided, however, that, at a minimum, in the event
the Mortgage Loan becomes 60 days delinquent, the Servicer shall inspect the
related Mortgaged Property
27
prior to the 90th day of delinquency. The Servicer shall keep a written report
of each such inspection.
ARTICLE IV
PAYMENTS TO THE OWNER
(m) Section 4.1 Distributions
(i) (a) On each Remittance Date the Servicer shall remit to the
Owner (a) all amounts credited to the Custodial Account as of the close
of business on the preceding Determination Date, net of charges or
withdrawals from the Custodial Account pursuant to Section 3.5, plus (b)
all Monthly Advances, if any, that the Servicer is obligated to
distribute pursuant to Section 4.3; minus (c) any amounts attributable to
Principal Prepayments received after the related Principal Prepayment
Period; minus (d) any amounts attributable to Monthly Payments collected
but due on a Due Date or Dates subsequent to the preceding Determination
Date. It is understood that by operation of Section 3.4, the remittance
on the first Remittance Date with respect to a Mortgage Loan Package is
to include principal collected after the Cut-off Date through the
preceding Determination Date plus interest, adjusted to the Mortgage Loan
Remittance Rate, collected through such Determination Date exclusive of
any portion thereof allocable to the period of time prior to the Cut-off
Date, with the adjustments specified in (b), (c) and (d) above. Each such
remittance shall be made by wire or other electronic funds transfer of
immediately available funds to the account of the Owner according to the
written wire instructions provided by the Owner to the Servicer from time
to time.
(ii) (b) With respect to any remittance to the Owner made by the
Servicer after the second Business Day following the Business Day on
which such remittance was due, the Servicer shall pay to the Owner
interest on such late remittance at an annual rate equal to Prime plus
two percent (2.0%), but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Servicer on the date such late remittance is
made and shall cover the period commencing with the date on which such
remittance was due and ending with the Business Day on which such late
remittance is made, both inclusive. Such interest shall be remitted along
with such late remittance. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Servicer.
(n) Section 4.2 Reports
(a) Not later than each Remittance Advice Date, the Servicer shall
furnish to the Owner via any electronic medium a monthly report in a form
reasonable acceptable to institutional buyers
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of mortgage loans, which report shall include, without limitation, with
respect to each Mortgage Loan the following loan-level information: (i) the
balance due as of the last day of the related Due Period, (ii) all Principal
Prepayments applied to the Mortgagor's account during the related Prepayment
Period, and (iii) the delinquency and bankruptcy status of the Mortgage Loan,
if applicable.
(b) With respect to any REO Property, and upon the request of the Owner,
the Servicer shall furnish to the Owner a statement describing the Servicer's
efforts during the previous month in connection with the sale of such REO
Property, including any rental of such REO Property incidental to the sale
thereof and an operating statement. The Servicer shall also provide the Owner
with such information concerning the Mortgage Loans as is necessary for Owner
to prepare its federal income tax return and as the Owner may reasonably
request from time to time. The Owner agrees to pay for all reasonable
out-of-pocket expenses incurred by the Servicer in connection with complying
with any request made by the Owner hereunder if such information is not
customarily provided by the Servicer in the ordinary course of servicing
mortgage loans similar to the Mortgage Loans.
Section 4.3 Monthly Advances by Servicer
On the Determination Date, the Servicer shall deposit in the Custodial
Account from its own funds or from amounts held for future distribution an
amount equal to all Monthly Payments to the extent not allocable to the period
prior to the Cut-off Date (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 as of the close of business on the
Business Day prior to the related Determination Date or which were deferred
pursuant to Section 3.1(c). Any amounts held for future distribution and so
used shall be replaced by the Servicer by deposit in the Custodial Account on
or before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Owner required to be made
on such Remittance Date. The Servicer's obligation to make such Monthly
Advances 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
earlier of: (i) the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; and (ii) the Remittance Date prior to the date the Mortgage
Loan is converted to REO Property, provided however, that if requested by a
Rating Agency in connection with Pass-Through Transfer, the Servicer 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, however, that such obligation shall cease if the Servicer
determines, in its sole reasonable opinion, that advances with respect to such
Mortgage Loan are non-recoverable by the Servicer from Liquidation Proceeds,
Insurance Proceeds, Condemnation Proceeds, or otherwise with respect to a
particular Mortgage Loan. In the event that the Servicer determines that any
such advances are non-recoverable, the Servicer shall provide the Owner with a
certificate signed by two officers of the Servicer evidencing such
determination.
29
ARTICLE V
GENERAL SERVICING PROCEDURE; COVENANTS;
REPRESENTATIONS AND WARRANTIES
(o) Section 5.1 Assumption Agreements
(i) (a) The Servicer will 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, provided that in accordance with the terms of the
Mortgage Note, the Servicer may permit an assumption if but only if the
Owner approves the creditworthiness of the assuming party. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer will,
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, the Servicer will not
exercise such rights if prohibited by Applicable Requirements from doing
so or if the exercise of such rights would impair or threaten to impair
any recovery under the related Primary Mortgage Insurance Policy, if any.
If the Servicer reasonably believes it is unable under Applicable
Requirements to enforce such "due-on-sale" clause, the Servicer will
request the written permission of the Primary Mortgage Insurer, if
required to cause the coverage under the Primary Mortgage Insurance
Policy to remain in full force and effect, and the Owner prior to
entering into 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, to the extent permitted by
Applicable Requirements, the Mortgagor remains liable thereon. In
connection with any such assumption, the related Mortgage Interest Rate,
the Unpaid Principal Balance, and the term of the Mortgage Loan may not
be changed. If an assumption is allowed pursuant to this Section 5.1(a),
the Servicer, with the prior consent of the Primary Mortgage Insurer, if
any, is authorized to enter into 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. Any such substitution of liability agreement shall be
in lieu of an assumption agreement.
(ii) (b) The Servicer shall follow Acceptable Servicing Procedures
(including underwriting standards) with respect to any such assumption or
substitution of liability. The Servicer shall notify the Owner that any
such substitution of liability or assumption agreement has been completed
by forwarding to the Owner or its designee the original of any such
substitution of liability or assumption agreement, which document shall
be added to the related Collateral File and shall, for all purposes, be
considered a part of such Collateral File to the same extent as all other
documents and instruments constituting a part thereof.
30
(iii) (c) For purposes of this Section 5.1, the term "assumption" is
deemed to also include a sale of the Mortgaged Property subject to the
Mortgage that is not accompanied by an assumption or substitution of
liability agreement.
(p) Section 5.2 Satisfaction of Mortgages and Release of Collateral
Files
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer (i) shall prepare the appropriate
documents and instruments required to satisfy or release the lien of the
Mortgage in accordance with applicable state law requirements, (ii) shall
promptly and within the time periods appropriate to process the satisfaction
or release within the applicable legal deadlines notify the Owner of such
event and (iii) shall request that the Owner deliver the required portion of
the Collateral File to the Servicer. The Owner shall, within five (5) Business
Days following its receipt of any such certification and request, send to the
Servicer the requested portion of the Collateral File. Upon receipt of such
package, the Servicer shall prepare and execute the documents and instruments
necessary to satisfy or release the lien of the Mortgage and shall process
such satisfaction or release in accordance with applicable state law
requirements. In addition, if, with respect to any Mortgage Loan that has been
paid in full, the Owner has recorded or caused to be recorded in the
appropriate public recording office of the jurisdiction in which the related
Mortgaged Property is located the related Assignment of Mortgage which
designates the Owner as the holder of record of the Mortgage, the Servicer
shall prepare and deliver to the Owner, together with a request for execution,
the documents and instruments necessary to satisfy or release the lien of the
Mortgage. The Owner shall, within five (5) Business Days following its receipt
of any such request, send to the Servicer the fully-executed documents that
were prepared and requested by the Servicer. Upon receipt of such package, the
Servicer shall process such satisfaction or release in accordance with
applicable state law requirements. In the event that applicable state law
requires that a satisfaction or release be recorded within a shorter time
period than the processes set forth above permits, the Servicer shall advise
the Owner accordingly and shall use reasonable efforts to ensure that the lien
of the Mortgage is released or satisfied in accordance with applicable state
law requirements. The Owner shall assist therewith by returning to the
Servicer the required portion of the Collateral File (and, if applicable, the
executed satisfaction and release documents and instruments) within the time
periods specified by the Servicer. The Servicer shall not be liable for and
the Owner shall indemnify the Servicer against any third party liability for
failure to release the lien of a Mortgage as required under applicable law to
the extent that such failure was caused by the Owner's breach of its
obligations under this Section 5.2.
(b) If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any rights the Owner may have under the
mortgage instruments, upon written demand of the Owner, the Servicer shall
remit to the Owner the then unpaid principal balance of the related Mortgage
Loan. The Servicer shall maintain the fidelity bond and errors and omissions
insurance policy as provided for in Section 3.12 insuring the Servicer against
any loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.
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(q) Section 5.3 Servicing Compensation
As compensation for its services hereunder, the Servicer shall be
entitled to pay itself the Servicing Fee with respect to each Mortgage Loan
from the gross amount of interest payments on such Mortgage Loan which are
actually received by the Servicer with respect thereto. Additional servicing
compensation in the form of all Ancillary Income which are actually received
by the Servicer may be retained by the Servicer to the extent not required to
be deposited into the Custodial Account pursuant to the terms of this
Agreement. The Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for in this
Agreement.
(r) Section 5.4 Statements as to Compliance
The Servicer will deliver to the Owner, by March 15th of each year,
beginning in 2004, an Officer's Certificate, stating that (i) a review of the
activities of the Servicer during the preceding fiscal year and of performance
under this Agreement has been made under such officer's supervision, (ii)
based on such review, the Servicer has fulfilled all of its obligations under
this Agreement throughout such fiscal year, or, if there has been a default in
the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof and the actions being taken by
the Servicer to cure such default, and (iii) all reports and information
provided to the Owner by the Servicer, pursuant to the Servicer's reporting
requirements under the Agreement, are accurate and complete in all material
respects. Copies of such statement may be provided by the Owner to any Person
identified as a prospective purchaser of the Mortgage Loans.
(s) Section 5.5 Annual Independent Public Accountants' Servicing
Report
The Servicer shall, on or before March 15th of each year, beginning in
2004, cause, at its sole cost and expense, a firm of independent public
accountants, which is a member of the American Institute of Certified Public
Accountants, to furnish a statement to the Owner to the effect that such firm
has examined certain documents and records and performed certain other
procedures relating to the servicing of the Mortgage Loans during the
immediately preceding fiscal year of the Servicer and that such firm is of the
opinion that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
32
such servicing has been conducted in compliance therewith, except for such
exceptions as shall be set forth in such statement.
Section 5.6 Annual Xxxxxxxx-Xxxxx Act Certification
(a) For so long as a Person is required by Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002 (the "Act") to provide an annual certification, by
March 15th of each year, beginning in 2004, an officer of the Servicer shall
execute and deliver an Officer's Certificate to such Person (hereafter, the
"Beneficiary") for the benefit of the Beneficiary and its officers, directors
and affiliates, pursuant to which such officer shall certify to those matters
substantially as set forth in Exhibit D.
(b) The Servicer shall indemnify and hold harmless the Beneficiary and
its officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach by the Servicer or any of its officers, directors, agents or affiliates
of its obligations under this Section 5.6.
(t) Section 5.7 Owner's Right to Examine Servicer Records, etc.
The Owner shall have the right, at the Owner's expense, except for
immaterial items in the ordinary course of business, to examine and audit the
Servicer's books of account, records, reports, and other papers relating to
(i) the performance by the Servicer of its obligations and duties under this
Agreement, or (ii) the Mortgage Loans, to make copies and extracts therefrom,
and to discuss the affairs, finances, and accounts of such Servicer relating
to such performance with its officers and employees, all at such reasonable
times and places and as often as may be reasonably requested.
Section 5.8 Consents and Approvals
The Owner shall timely obtain, at its sole cost and expense, the consents
and approvals required by law or pursuant to contract to consummate the
transactions contemplated hereby. All such consents will be obtained
without any cost or expense to the Servicer and will be obtained without
any adverse modification in the terms of any of the agreements relating to
the Mortgage Loans or the imposition of any burdensome provisions or
conditions on the Servicer.
Section 5.9 Removal of Mortgage Loans from Inclusion Under this Agreement
Upon a Whole Loan Transfer or a Pass-Through Transfer on One
or More Reconstitution Dates
(a) The Servicer and the Owner agree that with respect to some or all of
the Mortgage Loans, the Owner may effect one or more Whole Loan Transfers
and/or one or more Pass-Through Transfers, retaining the Servicer as servicer
thereof or subservicer if a master servicer is employed; provided, however,
the Owner agrees to use commercially reasonable efforts not to effect a Whole
Loan Transfer or a Pass Through Transfer if the aggregate outstanding
principal balance of the Mortgage Loans subject to such Whole Loan Transfer or
Pass Through Transfer is less that $10,000,000. In connection with a Whole
Loan Transfer, the related Reconstitution Agreement shall provide that no more
than four (4) Persons shall have the status of "Owner" thereunder.
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(b) With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, entered into by Owner, Servicer agrees:
(i) (i) negotiate in good faith and execute a servicer
agreement reasonably required to effectuate the Pass-Through
Transfer, provided such agreement creates no greater obligation or
cost on the part of the Servicer than otherwise set forth in this
Agreement, and provided further that the Servicer shall be entitled
to a servicing fee under that agreement at a rate per annum no less
than the Servicing Fee Rate;
(ii) to cooperate fully with the Owner and any prospective the
Owner with respect to all reasonable requests that are
necessary to effect a Pass-Through Transfer or Whole Loan
Transfer;
(ii) (iii) provide as applicable:
(A) information pertaining to the Servicer of the type and
scope customarily included in offering documents for
residential mortgage-backed securities transactions involving
multiple loan originators; and
(B) such opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Servicer as
are reasonably believed necessary by the trustee, any rating
agency or the Owner, as the case may be, in connection with
such Pass-Through Transfer. The Owner shall pay all third party
costs associated with the preparation of the information
described in clause (ii)(A) above and the delivery of any
opinions, letters or certificates described in this clause
(ii)(B). The Servicer shall not be required to execute any
servicer agreement unless a draft of the agreement is provided
to the Servicer at least 10 days before the Reconstitution
Date, or such longer period as may reasonably be required for
the Servicer and its counsel to review and comment on the
agreement;
(ii)
(c) In connection with any Pass-Through Transfer, the Servicer, upon
request, will bring down the representations and warranties made in Section
2.1 in to a date no later than the related Reconstitution Date;
(iii)
(d) In connection with any Pass-Through Transfer, the Servicer shall
indemnify, defend and hold harmless the Owner from and against any and all
losses, claims, expenses, damages or liabilities to which the Owner may be
subject to as a result of any untrue statement of
34
any material fact contained in any information (such information, the
"Servicer Information") prepared and furnished to the Owner by the Servicer
for inclusion in any related offering document or prospectus (collectively,
"Offering Materials"), or arise out of, or are based upon, any omission in the
Servicer Information necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
the Owner for damages or expenses reasonably incurred by it; provided,
however, that the Servicer shall be liable only insofar as such untrue
statement or omission relates solely to the Servicer Information in the
Offering Materials furnished to the Owner by the Servicer specifically for
inclusion in the Prospectus Supplement. The Owner shall indemnify, defend and
hold harmless the Servicer from and against any and all losses, claims,
expenses, damages or liabilities to which the Servicer may be subject to as a
result of any untrue statement of any material fact contained in any Offering
Materials, or arise out of, or are based upon, any omission in any information
included in the Offering Materials necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
will reimburse the Servicer for damages or expenses reasonably incurred by it;
provided, however, that Owner shall be liable only insofar as such untrue
statement or omission does not relate to the Servicer Information in the
Offering Materials furnished to the Owner by the Servicer specifically for
inclusion in the Prospectus Supplement; and
(iv) (e) All Mortgage Loans not sold or transferred pursuant to
Pass-Through Transfers 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.
(u)
Section 5.10 Compliance with REMIC Provisions
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Servicer shall
not take any action, cause the REMIC to take any action or fail to take (or
fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of the
REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on "prohibited transactions" as defined
Section 860G(a)(2) of the Code and the tax on "contributions" to a REMIC set
forth in Section 860(D) of the Code) unless the Servicer has received an
Opinion of Counsel (at the expense of the party seeking to take such action)
to the effect that the contemplated action will not endanger such REMIC status
or result in the imposition of any such tax.
ARTICLE VI
18.
19. THE servicer
(a) Section 6.1 Indemnification; Third Party Claims
Subject to Section 6.3, the Servicer agrees to indemnify and hold
harmless the Owner against any and all Losses that the Owner may sustain in
any way related to the failure of such
35
Servicer to service the Mortgage Loans in compliance with the terms of this
Agreement; provided, however, the Servicer shall not be liable hereunder (a)
to the extent such Losses directly result from the Custodian's negligent
action, negligent failure to act, bad faith, willful misconduct or breach
under the Custodial Agreement, dated as of November 1, 2003, among the Owner,
the Servicer and the Custodian,(b) with respect to any action or inaction in
accordance with the direction or consent of the Owner or (c) resulting from
the Owner's failure to respond to a request by the Servicer for direction or
consent in accordance with Section 3.1(c) hereof. The Servicer shall
immediately notify the Owner if a claim is made by a third party with respect
to this Agreement or the Mortgage Loans. The Servicer shall assume (with the
written consent of the Owner) the defense of any such claim and pay all
reasonable expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against the Servicer or the Owner in respect of such claim. The
Servicer shall follow any written instructions received from the Owner in
connection with any such claim and the Owner shall promptly reimburse the
Servicer for all amounts reasonably advanced by it pursuant to the preceding
sentence, except when the claim (a) is related to the Servicer's obligations
to indemnify the Owner pursuant hereto, (b) results from the failure of the
Servicer to service the Mortgage Loans in compliance with the terms of this
Agreement or (c) results from the Servicer's willful misconduct, bad faith or
negligence in performing its duties under this Agreement.
The Owner shall indemnify and hold harmless the Servicer against any and
all Losses that the Servicer may sustain as a result of (a) any act or
omission on the part of the Owner or (b) a breach of any of the Owner's
representations, warranties or covenants or obligations contained herein.
With respect to any Mortgage Loan, in the event that the Owner records or
causes to be recorded in the appropriate public recording office of the
jurisdiction in which the related Mortgaged Property is located the related
Assignment of Mortgage which designates the Owner as the holder of record of
the Mortgage, the Owner shall comply with the provisions of Section 5.2(a)
regarding the execution and delivery of release and reconveyance documents,
and shall immediately complete, sign and return to the Servicer any additional
documents that may be required of the holder of record of the Mortgage and may
be reasonably requested by the Servicer in order to permit the Servicer to
comply with the Servicer's servicing obligations, and, in its capacity as the
holder of record, shall take such other action as may be reasonably requested
by the Servicer. In addition, if, as a result of the recording of the related
Assignment of Mortgage, the Owner, in its capacity as the holder of record,
receives written notice of any action with respect to the related Mortgage or
the related Mortgaged Property, the Owner shall send a copy of such notice to
the Servicer immediately in accordance with the provisions of Section 9.8 of
this Agreement.
The Owner agrees that the Servicer shall have no liability to the Owner
for the Owner's failure to comply with the provisions set forth in this
paragraph.
(b) Section 6.2 Servicer Covenants; Merger or Consolidation of the
Servicer
36
(i) (a) The Servicer covenants that it will keep in full force and
effect its existence, rights and franchises as a limited partnership, and
its status as a Xxxxxx Xxx or Xxxxxxx Mac approved servicer in good
standing and will obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under
this Agreement.
(ii) (b) Any Person into which the Servicer may be merged or
consolidated, or any business organization resulting from any merger,
conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to all or substantially all of the business or
assets of the Servicer (whether or not related to loan servicing), shall
be the successor of the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided,
however, that the Servicer shall not, without the prior written approval
of the Owner, be a party to any such merger, consolidation or conversion,
or sell or otherwise dispose of all or substantially all of its business
or assets unless the successor or surviving person shall be an
institution that is a Xxxxxx Mae or Xxxxxxx Mac approved servicer in good
standing.
(iii) Section 6.3 Limitation on Liability of the Servicer and Others
The Servicer and the directors, officers, employees or agents of the
Servicer shall not be under any liability to the Owner for (a) any action
taken or for refraining from the taking of any action in good faith pursuant
to this Agreement, (b) errors in judgment, or (c) any action or inaction in
accordance with the direction or consent of the Owner; provided, however, this
provision shall not protect the Servicer against any breach of warranties or
representations made herein, any failure to perform its obligations in
accordance with any standard of care set forth in this Agreement (unless in
accordance with the direction or consent of the Owner), or any liability which
would otherwise be imposed by reason of willful misconduct, bad faith or gross
negligence in the performance of its duties or by reason of any breach of the
terms and conditions of the Agreement. The Servicer and any officer, employee
or agent of the Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. Subject to Section 6.1, the Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which
is not incidental to its duties under this Agreement and which may involve it
in any expense or liability; provided, however, that the Servicer may, with
the consent of the Owner, undertake any such action which it may deem
necessary or desirable with respect to this Agreement and the rights, duties
and the interests of the parties hereto. In such event, the legal expenses and
costs of such action and any liability resulting therefrom shall be reimbursed
to the Servicer in accordance with Section 6.1.
Section 6.4 Servicer Not to Resign
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The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon
the determination that the Servicer's duties hereunder are no longer
permissible under Applicable Requirements and such incapacity cannot be cured
by the Servicer. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Owner. No such resignation shall become effective until a successor
which satisfies the requirements set forth in Section 9.1 has assumed the
Servicer's responsibilities and obligations hereunder in accordance with such
Section.
Section 6.5 No Transfer of Servicing
The Servicer acknowledges that the Owner has entered into this Agreement
with the Servicer in reliance upon the adequacy of the Servicer's servicing
facilities, plan, personnel, records, and procedures, its integrity,
reputation, and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section, the Servicer shall not either
assign this Agreement or the servicing hereunder without the prior written
approval of the Owner in its sole discretion.
Section 6.6 [Reserved]
Section 6.7 Representations and Warranties of the Owner
With respect to the Mortgage Loans, the Owner hereby makes to the
Servicer as of the Cut-off Date each of the representations and warranties set
forth below:
(a) The Owner has all requisite corporate or organizational power,
authority and capacity, to carry on its business as it is now being conducted,
to execute and deliver this Agreement, and to perform all of its obligations
hereunder. The Owner does not believe, nor does it have any cause or reason to
believe, that it cannot perform each and every covenant contained in this
Agreement.
(b) The execution, delivery and performance of this Agreement by the
Owner and the consummation of the transactions contemplated thereby have been
duly and validly authorized by all necessary corporate, shareholder or other
action; this Agreement has been duly and validly executed and delivered by the
Owner, and is a valid and legally binding agreement of the Owner enforceable
against the Owner in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting generally the enforcement of creditor's
rights and the discretion of a court to grant specific performance of
contracts. Any requisite consents or approvals of third parties (including
Investors and any other applicable regulatory authorities) to the execution
and delivery of this Agreement or the performance of the transactions
contemplated hereby by the Owner have been obtained or will be obtained prior
to the Cut-off Date or such other date as expressly provided herein.
ARTICLE VII
DEFAULT
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(c) Section 7.1 Events of Default
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing:
(i) (i) any failure by the Servicer to remit to the Owner when
due any payment required to be made under the terms of this Agreement,
which failure continues unremedied for a period of three (3) days after
the date upon which written notice of such failure, requiring the same to
be remedied, shall have been given to the Servicer by the Owner; the
Owner shall use reasonable efforts to notify the Servicer that it has not
received the payment due, but the Owner's notice shall not be a condition
of the Event of Default; or
(ii)
(iii)(ii) any failure by the Servicer to duly observe or
perform, in any material respect, any other covenant, obligation or
agreement of the Servicer as set forth in this Agreement, which failure
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Owner; or
(iv) (iii) a decree or order of a court or agency or
supervisory authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, including bankruptcy, marshaling of assets and liabilities, or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or order
shall have remained in force, undischarged or unstayed for a period of
thirty (30) days; or
(v) (iv) the Servicer shall consent to the appointment of a
conservator, receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or
relating to the Servicer or relating to all or substantially all of the
Servicer's property; or
(vi) (v) the Servicer shall admit in writing its inability to
pay its debts as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligation or ceases its normal business operations for three (3)
Business Days; or
(vi) failure by the Servicer to maintain its license to do
business in any jurisdiction where a Mortgaged Property is located if
such license is required and such failure continues unremedied for a
period of thirty (30) days; or
39
(vii) the Servicer 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 this Agreement, including Section 6.5; or
(vii) the Servicer shall cease to be an approved servicer for
Xxxxxx Xxx or Xxxxxxx Mac.
(viii) the Servicer shall cease to have a minimum net worth of
$25,000,000 as determined in accordance with the Financial Accounting
Standards Board's generally accepted accounting principles;
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Owner, by notice in writing to the Servicer (in
each such instance, the "Defaulted Servicer"), may, in addition to whatever
rights the Owner may have at law or equity to damages, including injunctive
relief and specific performance, commence termination of all of the rights and
obligations of the Defaulted Servicer under this Agreement and may exercise
any and all other remedies available at law or at equity. Upon receipt by the
Defaulted Servicer of such written notice from the Owner stating the intent to
terminate the Defaulted Servicer as servicer under this Agreement as a result
of such Event of Default, all authority and power of the Defaulted Servicer
under this Agreement, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the successor appointed pursuant to Section
9.1. Upon written request from the Owner, the Defaulted Servicer shall, at its
sole expense, prepare, execute, and deliver to a successor any and all
documents and other instruments, place in such successor's possession all
Collateral Files and Servicing Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice
of termination, all of which shall be undertaken immediately and shall be
completed as soon as possible and in all events by not later than thirty (30)
Business Days following the Owner's request therefor. The Defaulted Servicer
agrees to cooperate with the Owner and such successor in effecting the
termination of the Defaulted Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Defaulted Servicer to the Custodial Account, the Escrow Account or the
REO Account and all other amounts which may thereafter be received with
respect to the Mortgage Loans and to which the Defaulted Servicer is not
entitled pursuant to the terms of this Agreement.
(d) Section 7.2 Waiver of Defaults
The Owner may waive any default by the Defaulted Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so
waived.
(e) Section 7.3 Survival of Certain Obligations and Liabilities of
the Defaulted Servicer
40
The representations, warranties, covenants, indemnities and agreements of
the parties provided in this Agreement and the parties' obligations hereunder
shall survive the execution and delivery and the termination or expiration of
this Agreement. Notwithstanding any termination of the rights and obligations
of the Defaulted Servicer pursuant to this Section 7, the Defaulted Servicer
shall remain liable for any actions of the Defaulted Servicer prior to the
effective time of such termination.
20. ARTICLE VIII TERMINATION
(a) Section 8.1 Termination of Agreement
(b) This Agreement shall terminate upon any of: (i) the later of the
distribution to the Owner of final payment or liquidation with respect to the
last Mortgage Loan and each REO Property, or the disposition of all property
acquired upon foreclosure or deed in lieu of foreclosure with respect to the
last Mortgage Loan and the remittance of all funds due hereunder, (ii) the
mutual consent of the parties in writing, or (iii) the termination of the
Servicer pursuant to Section 8.2.
(c) Section 8.2 Termination of the Servicer due to an Event of
Default
(i) (a) Upon 30 days' written notice, the Owner may, at its sole
option, upon the occurrence of an Event of Default and in accordance with
Section 7.1, terminate any rights the Servicer may have hereunder. Any
such notice of termination shall be in writing and delivered to the
terminated Servicer (in such instance, the "Terminated Servicer") by
registered mail as provided in Section 9.8 of this Agreement. If the
Owner so terminates the rights of a Terminated Servicer, the Owner with
full cooperation of the Terminated Servicer shall arrange for the
transfer of servicing to, at the Owner's option, the Owner or a third
party, and the Terminated Servicer shall continue servicing, for the
Servicing Fee provided herein, the Mortgage Loans under this Agreement
until the Owner gives the Terminated Servicer notice of the transfer and
such transfer has been completed.
(b) The Terminated Servicer agrees to cooperate with the Owner and such
successor in effecting the termination of the Terminated Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Terminated Servicer to the Custodial
Account, the Escrow Account or the REO Account, or thereafter be received with
respect to the Mortgage Loans and to which the Terminated Servicer is not
entitled pursuant to the terms of this Agreement.
(d) Section 8.3 Termination Without Cause
Upon at least 30 days prior notice, the Owner may terminate, at its sole
option the Servicer without cause. Any such notice of termination shall be in
writing and delivered to the Servicer and any Rating Agency by registered mail
as provided in Section 9.7. In the event the
41
Owner so chooses to terminate the Servicer, the Servicer shall be entitled to
receive, as liquidated damages, upon its termination as Servicer hereunder
without cause pursuant to this Section 8.3, an amount equal to two percent
(2%) of the aggregate outstanding principal amount of each Mortgage Loan as of
the termination date paid by the Owner to the Servicer.
21. ARTICLE IX MISCELLANEOUS PROVISIONS
(a) Section 9.1 Successor to the Servicer
(i) (a) Prior to termination of the Servicer's responsibilities and
duties under this Agreement pursuant to Section 6.4, 7.1, 8.1 or 8.2, the
Owner shall either (i) succeed to and assume all of the Servicer's
responsibilities, rights, duties, and obligations under this Agreement
from and after the date of such succession or (ii) appoint a successor to
the Servicer that shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this
Agreement prior to the termination of the Servicer's responsibilities,
duties and liabilities under this Agreement pursuant to Section 8.2
above. In the event that the Servicer's duties, responsibilities, and
liabilities under this Agreement shall be terminated pursuant to the
foregoing Sections, the Servicer shall discharge such duties and
responsibilities, and be compensated therefor as provided in this
Agreement, during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of
diligence and prudence which it is obligated to exercise under this
Agreement and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The
resignation or removal of the Servicer pursuant to the foregoing Sections
shall not become effective until a successor shall have been appointed
pursuant to this Section and shall in no event relieve the Servicer of
its non-servicing duties, obligations, covenants, representations and
warranties, it being understood and agreed that the provisions of
Sections 5.10, 6.1, Article 7 and Article 8 shall be applicable to the
Servicer notwithstanding any such resignation or termination of the
Servicer or the termination of this Agreement.
(b) The Servicer shall promptly deliver to the successor (i) the funds in
the Custodial Account and the Escrow Account to which the Owner is entitled
pursuant to the terms of this Agreement, (ii) all other funds to which the
Owner is entitled pursuant to the terms of this Agreement, (iii) all other
amounts which may thereafter be received with respect to the Mortgage Loans
and to which the Servicer is not entitled pursuant to the terms of this
Agreement and (iv) all Collateral Files and Servicing Files and related
documents and statements held by it hereunder. The Servicer shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
(c) Upon a successor's acceptance of appointment as such, the Owner shall
notify the
42
(ii) Servicer of such appointment.
(b) Section 9.2 Amendment
This Agreement may be amended from time to time by the parties by written
agreement signed by both of the parties.
(c) Section 9.3 Duration of Agreement
This Agreement shall continue in existence and effect until terminated as
herein provided.
(d) Section 9.4 Governing Law
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York, without reference to the choice of law
doctrine of such state.
(e) Section 9.5 General Interpretive Principles
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(i) (i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the
other gender;
(ii) (ii) accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles;
(iii)(iii) references herein to "Articles," "Sections,"
"Subsections," "Paragraphs," and other subdivisions without reference to
a document are to designated Articles, Sections, Subsections,
Paragraphs, and other subdivisions of this Agreement;
(iv) (iv) a reference to a Subsection without further
reference to a Section is a reference to such Subsection as contained in
the same Section in which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions;
(v) (v) the words "herein," "hereof," "hereunder," and
other words of similar import refer to this Agreement as a whole and not
to any particular provision; and
(vi) the term "include" or "including" shall mean without
limitation by (vi) reason of enumeration.
43
(f) Section 9.6 Reproduction of Documents
This Agreement and all documents relating hereto, including without
limitation (i) consents, waivers, and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates, and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
(g) Section 9.7 Notices
All demands, notices, consents, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered or delivered by facsimile, overnight courier, or
registered mail, postage prepaid, or delivered by telefacsimile, to:
(i) in the case of the Servicer, at the address set forth below or such
other address as may hereafter be furnished to the Owner in writing by the
Servicer:
Countrywide Homes Loans Servicing LP
000 Xxxxxxxxxxx Xxx
Xxxx Xxxxxx, XX 00000
Attention: Investor Accounting
With a copy to:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
(ii) in the case of the Owner, at the address set forth below, or such
other address as may hereafter be furnished to the Servicer by the Owner:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with copies to:
Xxxxxxx Xxxxx Mortgage Company
00
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
Xxxxxxx Xxxxx Mortgage Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and in the case of any subsequent Owner, as set forth in written notice
supplied to the Servicer by such subsequent Owner. All reports that are due to
the Owner from the Servicer pursuant to Section 4.2 shall be deemed to have
been duly given if delivered to the internet address from time to time
provided by the Owner to the Servicer.
Section 9.8 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 covenants,
agreements, provisions or terms of this Agreement or the rights of the Owner
hereunder. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate in
good faith to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 9.9 Disclosure of Relationship
Each party (including the respective affiliates) shall have the right
upon obtaining prior written consent from the other party, from time to time,
to publish, distribute, advertise or otherwise disclose the relationship and
the general services created and performed under this Agreement; provided,
however, such disclosure shall not identify the amount or nature of fees
earned or to be paid hereunder. No disclosure permitted by this Section 9.10
shall include any Mortgagor information.
(h) Section 9.10 Exhibits and Schedules
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The following exhibits and schedules to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement:
Exhibit A MORTGAGE LOAN SCHEDULE
Exhibit B LIST OF COLLATERAL DOCUMENTS
Exhibit C LIST OF DOCUMENTS IN CREDIT FILE
(i) Exhibit D FORM OF XXXXXXXX-XXXXX ACT CERTIFICATION
(j) Section 9.11 Counterparts; 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 Sections 6.4, 6.5, 7.1
and 8.1, this Agreement shall inure to the benefit of and be binding upon the
Servicer, the Owner and their respective successors and assigns.
(k) Section 9.12 Effect of Headings
The headings in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning hereof.
(l) Section 9.13 Other Agreements Superseded
This Agreement supersedes all prior agreements and understandings
relating to the subject matter hereof.
[signatures start on next page]
46
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to
be signed to this Servicing Agreement by their respective officers thereunto
duly authorized as of the day and year first above written.
COUNTRYWIDE HOME LOANS SERVICING LP,
the Servicer
By:
-------------------------------------
Name:
Title:
XXXXXXX SACHS MORTGAGE COMPANY,
the Owner
By: Xxxxxxx Xxxxx Real Estate Funding
Corp., its General Partner
By:
-------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[attach read-only diskette]
22. EXHIBIT B
LIST OF CREDIT DOCUMENTS
Copy of Note
Copy of Mortgage or Deed of Trust, including all riders
Copy of all riders to Note and Mortgage or Deed of Trust
Settlement statement (HUD 1)
Copy of PMI Certificate (if applicable)
Appraisal
Flood determination certificate
Hazard Insurance declaration page
Loan application
2-1
23. EXHIBIT C
LIST OF DOCUMENTS IN COLLATERAL FILE
With respect to each Mortgage Loan, the Collateral File shall include
each of the following items, which shall be available for inspection by the
Owner and any prospective Owner, and which shall be retained by Countrywide in
the Servicing File or delivered to the Custodian):
1. The original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of ______________, without recourse" and signed in the
name of Countrywide by an authorized officer (in the event that the
Mortgage Loan was acquired by Countrywide in a merger, the signature must
be in the following form: "[Countrywide], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was acquired or
originated by Countrywide while doing business under another name, the
signature must be in the following form: "[Countrywide], formerly know as
[previous name]").
2. The original of any personal endorsement, surety and/or guaranty
agreement executed in connection with the Mortgage Note, if any.
3. Except as set forth below, 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,
Countrywide 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, Countrywide 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 Countrywide 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 Countrywide; 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.
4. The originals or certified true copies of all assumption, modification,
consolidation or extension agreements, with evidence of recording noted
thereon if recordation is required to maintain the lien of the mortgage
or is otherwise required, or, if recordation is not so required, an
original or copy of any such assumption, modification, consolidation or
extension agreements.
2
5. The original Assignment of Mortgage for each Mortgage Loan, in form and
substance acceptable for recording, from Countrywide to "______________"
or as otherwise directed by the Owner. If the Mortgage Loan was acquired
by Countrywide in a merger, the Assignment of Mortgage must be made by
"[Countrywide], successor by merger to [name of predecessor]." If the
Mortgage Loan was acquired or originated by Countrywide while doing
business under another name, the Assignment of Mortgage must be by
"[Countrywide], formerly know as [previous name]." Subject to the
foregoing and where permitted under the Applicable Laws of the
jurisdiction wherein the Mortgaged property is located, such Assignments
of Mortgage may be made by blanket assignments for Mortgage Loans secured
by the Mortgaged Properties located in the same county.
6. Originals or certified true copies of all intervening assignments of the
Mortgage necessary to show a complete chain of title from the original
mortgagee to the Seller, 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, Countrywide 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 Countrywide
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 Countrywide; 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 original mortgage policy of title insurance or evidence of title, if
available.
8. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items to the extent in the possession of Countrywide or in
the possession of Countrywide's agent(s):
1. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
2. Residential loan application.
3. Mortgage Loan closing statement.
3
4. Verification of employment and income, as required by the respective loan
program.
5. Verification of acceptable evidence of source and amount of down payment,
as required by the respective loan program.
6. Credit report on the Mortgagor, if available.
7. Residential appraisal report, as required by the respective loan program.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property, if required by the title company or
Applicable Law.
10. 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.
11. All required disclosure statements.
12. If available, termite report, structural engineer's report, water
potability and septic certification.
13. Sales contract, if applicable.
14. Amortization schedule, if available.
15. Original power of attorney, if applicable.
4
24. EXHIBIT D
FORM OF XXXXXXXX-XXXXX ACT CERTIFICATION
I, [NAME OF CERTIFYING INDIVIDUAL], a duly elected and acting officer of
Countrywide Home Loans Servicing LP (the "Servicer"), hereby certify, pursuant
to Section 5.6 of that certain Servicing Agreement (the "Agreement"), dated as
of [DATE] between the Servicer and Xxxxxxx Xxxxx Mortgage Company (the
"Owner"), to [ENTITY NAME] (the "Beneficiary") with respect to the calendar
year immediately preceding the date of this Certificate, as follows:
(i) 1. I have reviewed the annual statement of compliance ("Annual
Statement of Compliance") prepared by Servicer, and the annual
independent public accountant's servicing report made in accordance
with the Uniform Single Attestation Program for Mortgage Bankers
("Annual Independent Public Accountant's Servicing Report"), which
have been furnished to the Beneficiary pursuant to the Agreement and
any subsequent servicing agreement related thereto or to the
Mortgage Loans (collectively, the "Servicing Agreement");
(ii) 2. Based on my knowledge, the information in the Annual Statement of
Compliance, the Annual Independent Public Accountant's Servicing
Report and all final servicing reports prepared by Servicer and
delivered to the Beneficiary pursuant to the Servicing Agreement
relating to the servicing of the Mortgage Loans, taken as a whole,
does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by such
statements or reports;
(iii) 3. Based on my knowledge, the servicing information required to be
provided to the Beneficiary by the Servicer under the Servicing
Agreement has been provided to the Beneficiary;
(iv) 4. I am responsible for reviewing the activities performed by the
Servicer under the Servicing Agreement and based upon the review
required by the Servicing Agreement, and except as disclosed in the
Annual Statement of Compliance and the Annual Independent Public
Accountant's Servicing Report submitted to the Beneficiary, the
Servicer has, as of the last day of the period covered by the Annual
Statement of Compliance, fulfilled its obligations under the
Servicing Agreement; and
5. I have disclosed to the Beneficiary's certified public accountants
all significant deficiencies relating to the Servicer's compliance
with the minimum servicing standards in accordance with a review
conducted in compliance with the Uniform Single Attestation Program
for Mortgage Bankers or similar standard as set forth in the
Servicing Agreement.
5
EXHIBIT 3
Sale Agreement
--------------
[See Attached]
EXECUTION
COUNTRYWIDE HOME LOANS, INC.,
as Seller
and
XXXXXXX SACHS MORTGAGE COMPANY,
as Purchaser
----------------------------------------
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
dated as of July 1, 2004
----------------------------------------
Fixed and Adjustable Rate Residential Mortgage Loans
(SERVICING RETAINED)
EXECUTION
ARTICLE I. DEFINITIONS 1
ARTICLE II. PRE-CLOSING AND CLOSING PROCEDURES 10
Section 2.01 Books and Records; Transfers of Mortgage Loans............................10
Section 2.02 Due Diligence by the Purchaser............................................11
Section 2.03 Identification of Mortgage Loan Package...................................11
Section 2.04 Credit Document Deficiencies Identified During Due Diligence..............11
Section 2.05 Delivery of Collateral Files..............................................11
Section 2.06 Purchase Confirmation.....................................................13
Section 2.07 Closing...................................................................13
Section 2.08 Payment of the Purchase Proceeds..........................................14
Section 2.09 Entitlement to Payments on the Mortgage Loans.............................14
Section 2.10 Payment of Costs and Expenses.............................................14
Section 2.11 MERS Mortgage Loans and the MERS System...................................14
ARTICLE III. REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH 15
Section 3.01 Representations and Warranties Respecting Countrywide.....................15
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans........16
Section 3.03 Remedies for Breach of Representations and Warranties.....................24
Section 3.04 Accrual of Cause of Action................................................25
Section 3.05 Representations and Warranties Respecting the Purchaser...................25
Section 3.06 Indemnification by the Purchaser..........................................27
ARTICLE IV. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 27
Section 4.01 Countrywide to Act as Servicer............................................27
ARTICLE V. COVENANTS BY COUNTRYWIDE 27
Section 5.01 Indemnification by Countrywide; Third Party Claims........................27
Section 5.02 [Reserved.]...............................................................28
Section 5.03 Merger or Consolidation of Countrywide....................................28
Section 5.04 Limitation on Liability of Countrywide and Others.........................28
Section 5.05 No Transfer of Servicing..................................................29
ARTICLE VI. MISCELLANEOUS 29
Section 6.01 Notices...................................................................29
Section 6.02 Sale Treatment............................................................30
Section 6.03 Exhibits..................................................................30
Section 6.04 General Interpretive Principles...........................................30
Section 6.05 Reproduction of Documents.................................................31
Section 6.06 Further Agreements........................................................31
Section 6.07 Assignment of Mortgage Loans by the Purchaser; Pass-Through
Transfers.................................................................31
Section 6.08 Conflicts between Transaction Documents...................................33
Section 6.09 Governing Law.............................................................33
Section 6.10 Severability Clause.......................................................33
Section 6.11 Successors and Assigns....................................................33
Section 6.12 Relationship of Parties...................................................34
Section 6.13 Solicitation of Mortgagor.................................................34
Section 6.14 Confidentiality...........................................................34
Section 6.15 Entire Agreement..........................................................35
EXHIBITS
--------
Exhibit A Schedule of Collateral Documents.........................................A-1
Exhibit B Form of Purchase Confirmation............................................B-1
EXECUTION
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
This Master Mortgage Loan Purchase Agreement is made and
entered into as of July 1, 2004 (the "Agreement"), between Countrywide Home
Loans, Inc., having an address at 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000 ("Countrywide"), and Xxxxxxx Xxxxx Mortgage Company, having an address
at 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 the "Purchaser").
R E C I T A L S
The Purchaser has agreed to purchase from Countrywide and
Countrywide has agreed to sell from time to time to the Purchaser all of
Countrywide's right, title and interest, excluding servicing rights, in and to
those certain mortgage loans identified in a Purchase Confirmation (as defined
below) executed by Countrywide and the Purchaser. This Agreement is intended
to set forth the terms and conditions by which Countrywide shall transfer and
the Purchaser shall acquire such mortgage loans.
In consideration of the promises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Countrywide and the Purchaser
agree as follows:
ARTICLE I.
DEFINITIONS
Unless the context requires otherwise, all capitalized terms
used herein shall have the meanings assigned to such terms in this Article I
unless defined elsewhere herein. Any capitalized term used or defined in a
Purchase Confirmation that conflicts with the corresponding definition set
forth herein shall supersede such term.
Adjustable Rate Mortgage Loan: Any Mortgage Loan in which the
related Mortgage Note contains a provision whereby the Mortgage Interest Rate
is adjusted from time to time in accordance with the terms of such Mortgage
Note.
Agency: Either Xxxxxx Mae or Xxxxxxx Mac.
Agreement: This Master Mortgage Loan Purchase Agreement,
including all exhibits and supplements hereto, and all amendments hereof.
Applicable Law: All provisions of statutes, rules and
regulations, interpretations and orders of governmental bodies or regulatory
agencies applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question is a
party.
Appraised Value: The value of the related Mortgaged Property as
set forth in an appraisal made in connection with the origination of a
Mortgage Loan or the sale price of the related Mortgaged Property if the
proceeds of such Mortgage Loan were used to purchase such Mortgaged Property,
whichever is less.
1
Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage
Note matures prior to full amortization and requires a final and accelerated
payment of principal.
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a day on which banking and savings and loan institutions in either the
State of California, the State of New York, or the State of Texas are
authorized or obligated by law or executive order to be closed.
Closing: The consummation of the sale and purchase of each
Mortgage Loan Package.
Closing Date: The date on which the purchase and sale of the
Mortgage Loans constituting a Mortgage Loan Package is consummated, as set
forth in the Trade Confirmation or Purchase Confirmation.
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.
Collateral Documents: The collateral documents pertaining to
each Mortgage Loan as set forth in Exhibit A hereto.
Collateral File: With respect to each Mortgage Loan, a file
containing each of the Collateral Documents.
Combined Loan-to-Value Ratio: As of any date and as to any
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
Stated Principal Balance (or the original principal balance, if so indicated)
of such Mortgage Loan and (ii) the Stated Principal Balance (or the original
principal balance, if so indicated) as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Mortgage Loan and
which are secured by the same Mortgaged Property to (b) the Appraised Value of
the related Mortgaged Property.
Condemnation Proceeds: All awards or settlements in respect of
a taking of an entire Mortgaged Property by exercise of the power of eminent
domain or condemnation.
Cooperative Corporation: The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements
constituting the Cooperative Property and which governs the Cooperative
Property, which Cooperative Corporation must qualify as a Cooperative Housing
Corporation under Section 216 of the Code.
Cooperative Loan: Any Mortgage Loan secured by Coop Shares and
a Proprietary Lease.
Cooperative Property: The real property and improvements owned
by the Cooperative Corporation, including the allocation of individual
dwelling units to the holders of the Coop Shares of the Cooperative
Corporation.
2
Coop Shares: Shares issued by a Cooperative Corporation.
Cooperative Unit: A single family dwelling located in a
Cooperative Property.
Countrywide: Countrywide Home Loans, Inc., or any successor or
assign to Countrywide under this Agreement as provided herein.
Credit File: The file retained by Countrywide that includes the
mortgage loan documents pertaining to a Mortgage Loan including copies of the
Collateral Documents together with the credit documentation relating to the
origination of such Mortgage Loan, which Credit File may be maintained by
Countrywide on microfilm or any other comparable medium.
Custodial Account: The account or accounts created and
maintained pursuant to Section 4.4 of the Servicing Agreement, each of which
shall be an Eligible Account.
Custodial Agreement: The letter agreement, substantially in the
form of Exhibit C, that governs the temporary retention of the Collateral
Files by the Custodian with respect to a Closing Date.
Custodian: JPMorgan Chase Bank, its successor in interest or
assign, or such other custodian that may be designated by the Purchaser from
time to time.
Cut-off Date: The first day of the month in which the related
Closing Date occurs or such other date as may be set forth in the related
Trade Confirmation or Purchase Confirmation.
Cut-off Date Balance: The aggregate scheduled unpaid principal
balance of the Mortgage Loans in a Mortgage Loan Package as of the Cut-off
Date, after application of (i) scheduled payments of principal due on such
Mortgage Loans on or before such Cut-off Date, whether or not collected, and
(ii) any Principal Prepayments received from the Mortgagor prior to the
Cut-off Date.
Determination Date: The Business Day immediately preceding the
related Remittance Date.
Due Date: The first day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: An account or accounts (i) maintained with a
depository institution the short term debt obligations of which are rated by a
nationally recognized statistical rating agency in its highest rating
categories at the time of any deposit therein [or one of its two highest
rating categories for long term debt obligations], or (ii) the deposits of
which are insured up to the maximum permitted by the FDIC.
Escrow Account: The separate trust account or accounts created
and maintained pursuant to Section 4.6 of the Servicing Agreement, each of
which shall be an Eligible Account.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums, flood insurance
3
premiums, and other payments required to be escrowed by the Mortgagor with the
Mortgagee pursuant to any Mortgage Loan.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 7.01.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Xxxxxx Xxx: The Federal National Mortgage Association or any
successor organization.
First Lien Mortgage Loan: Any Mortgage Loan secured by a first
lien on the related Mortgaged Property.
Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or any
successor organization.
Funding Deadline: With respect to each Closing Date, one
o'clock (1:00) p.m. New York time.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note,
which amount is added to the index in accordance with the terms of the related
Mortgage Note to determine on each Interest Adjustment Date, the Mortgage
Interest Rate for such Mortgage Loan.
HUD: The Department of Housing and Urban Development or any
federal agency or official thereof which may from time to time succeed to the
functions thereof.
Index: With respect to any Adjustable Rate Mortgage Loan on
each Interest Adjustment Date the applicable index as set forth in the related
Mortgage Note.
Interest Adjustment Date: With respect to an Adjustable Rate
Mortgage Loan, the date on which an adjustment to the Mortgage Interest Rate
on a Mortgage Note becomes effective.
Lifetime Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the absolute maximum Mortgage Interest Rate payable, above
which the Mortgage Interest Rate shall not be adjusted, as set forth in the
related Mortgage Note and Mortgage Loan Schedule.
Liquidation Proceeds: Amounts, other than PMI Proceeds,
Condemnation Proceeds and Other Insurance Proceeds, received by Countrywide in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than amounts received following the
acquisition of an REO Property pursuant to Section 4.13.
LPMI Fee: The portion of the Mortgage Interest Rate relating to
an LPMI Loan, which is set forth on the related Mortgage Loan Schedule, to be
retained by Countrywide to pay the premium due on the PMI Policy with respect
to such LPMI Loan.
4
LPMI Loan: Any Mortgage Loan with respect to which Countrywide
is responsible for paying the premium due on the related PMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set
forth on the related Mortgage Loan Schedule.
LTV: With respect to any Mortgage Loan, the ratio (expressed as
a percentage) of the Stated Principal Balance (or the original principal
balance, if so indicated) of such Mortgage Loan as of the date of
determination to the Appraised Value of the related Mortgaged Property.
MERS: Mortgage Electronic Registration Systems, Inc. or any
successor or assign thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on
the MERS System.
MERS System: The electronic system of recording transfers of
mortgages maintained by MERS.
MIC: A mortgage insurance certificate issued by HUD.
Missing Credit Documents: As defined in Section 2.04 hereof.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: With respect to a Mortgage Loan that is not a
Cooperative Loan, The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien
Mortgage Loan, on an unsubordinated estate in fee simple in real property
securing the Mortgage Note; except that with respect to real property located
in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, the mortgage, deed of trust or other
instrument securing the Mortgage Note may secure and create a first lien ,
upon a leasehold estate of the Mortgagor. With respect to a Cooperative Loan,
the security agreement creating a security interest in the stock allocated to
a dwelling unit in the residential cooperative housing corporation that was
pledged to secure such Cooperative Loan and the related Cooperative Lease
Mortgage Interest Rate: The annual rate at which interest
accrues on any Mortgage Loan and, with respect to an Adjustable Rate Mortgage
Loan, as adjusted from time to time in accordance with the provisions of the
related Mortgage Note..
Mortgage Loan: Any mortgage loan that is sold pursuant to this
Agreement, as evidenced by such mortgage loan's inclusion on the related
Mortgage Loan Schedule, which mortgage loan includes the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, PMI
Proceeds (if applicable), Other Insurance Proceeds, REO Disposition proceeds,
and all other rights, benefits, proceeds and obligations arising from or in
connection with such Mortgage Loan, excluding the servicing rights relating
thereto. Unless the context requires otherwise, any reference to the Mortgage
Loans in this Agreement shall refer to the Mortgage Loans constituting a
Mortgage Loan Package.
5
Mortgage Loan Package: The Mortgage Loans sold to the Purchaser
pursuant to a Purchase Confirmation.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the interest rate payable to the Purchaser on each Remittance Date which
shall equal the Mortgage Interest Rate less the Servicing Fee and the LPMI
Fee, if applicable.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Exhibit A, such schedule setting forth the following information
with respect to each Mortgage Loan: (1) Countrywide's Mortgage Loan number;
(2) the address, 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 or planned
unit development; (4) the purpose of the Mortgage Loan; (5) the Mortgagor's
social security number; (6) a code indicating the occupancy status of the
Mortgaged Property (i.e., owner-occupied, non-owner, second home); (7) a code
indicating whether the Mortgagor was self-employed at the time of origination;
(8) the Mortgage Interest Rate at origination; (9) the current Mortgage
Interest Rate; (10) whether the Mortgage Loan has Monthly Payments that are
interest only for a period of time; (11) the Servicing Fee Rate; (12) the
current Monthly Payment; (13) the original term to maturity; (14) the
remaining term to maturity; (15) the scheduled principal balance of the
Mortgage Loan as of the Cut-off Date; (16) the principal balance of the
Mortgage Loan at origination; (17) 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; (18) the LTV at origination
or, if the Mortgage Loan was secured by a second lien, the combined LTV at
origination; (19) the due date of the Mortgage Loan; (20) a PMI Policy insurer
name, percent and policy number (if applicable); (21) the type of appraisal;
(22) a code indicating whether the Mortgage Loan is a MERS Mortgage Loan; (23)
a code indicating whether the Mortgaged Property has any subordinate
financing; (24) a code indicating whether the Mortgage Loan is secured by a
leasehold interest in the related Mortgaged Property; (25) a code indicating
whether the Mortgage Loan is subject to a prepay penalty; (26) documentation
type; (27) a code indicating whether the Mortgage Loan is a buydown loan; (28)
first payment date and (29) FICO score. With respect to any Adjustable Rate
Mortgage Loan, in addition to (1) through (29) above: (a) the Gross Margin;
(b) the Periodic Rate Cap; (c) the Lifetime Rate Cap; (d) the first Interest
Adjustment Date and the Interest Adjustment Date frequency; (e) the Maximum
Rate; (f) the Minimum Rate; (g) the first Interest Adjustment Date immediately
following the Cut-off Date; and (h) the Index.
Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to a Mortgage Loan that is not
a Cooperative Loan, the underlying real property securing repayment of a
Mortgage Note, consisting of a single parcel of real estate considered to be
real estate under the laws of the State in which such real property is
located, which may include condominium units and planned unit developments,
improved by a residential dwelling; except that with respect to real property
located in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, a leasehold estate of the Mortgagor,
the term of which is equal to or longer than the term of the Mortgage. With
respect to a Cooperative Loan, the stock allocated to a dwelling unit in the
residential cooperative housing corporation that was pledged to secure such
Cooperative Loan and the related Cooperative Lease.
6
Mortgagee: The mortgagee or beneficiary named in the Mortgage
and the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note and their successors
in title to the Mortgaged Property.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser.
Other Insurance Proceeds: Proceeds of any title policy, hazard
policy, pool policy or other insurance policy covering a Mortgage Loan, other
than the PMI Policy, if any, to the extent such proceeds are not to be applied
to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that Countrywide would follow in
servicing mortgage loans held for its own account.
Pass-Through Transfer: The sale or transfer of some or all of
the Mortgage Loans by the Purchaser to a trust to be formed as part of a
publicly issued or privately placed mortgage-backed securities transaction.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may
increase or decrease on an Adjustment Date above or below the Mortgage
Interest Rate previously in effect, equal to the rate set forth on the
Mortgage Loan Schedule per adjustment.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability
corporation, unincorporated organization or government or any agency or
political subdivision thereof.
PMI Policy: A policy of private mortgage guaranty insurance
relating to a Mortgage Loan and issued by a Qualified Insurer.
PMI Proceeds: Proceeds of any PMI Policy.
Preliminary Mortgage Loan Package: The mortgage loans
identified or described in a Trade Confirmation, which, subject to the
Purchaser's due diligence as contemplated in Section 2.02, are intended to be
sold under this Agreement as a Mortgage Loan Package.
Preliminary Mortgage Loans: The mortgage loans constituting a
Preliminary Mortgage Loan Package.
Principal Prepayment: Any payment or other recovery of
principal on a Mortgage Loan which is received in advance of its scheduled Due
Date, excluding any prepayment penalty or premium thereon (unless the Purchase
Confirmation provides otherwise), 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.
Proprietary Lease: With respect to any Cooperative Unit, a
lease or occupancy agreement between a Cooperative Corporation and a holder of
related Coop Shares.
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Purchase Confirmation: A letter agreement, substantially in the
form of Exhibit B hereto, executed by Countrywide and the Purchaser in
connection with the purchase and sale of each Mortgage Loan Package, which
sets forth the terms relating thereto including a description of the related
Mortgage Loans (including the Mortgage Loan Schedule), the purchase price for
such Mortgage Loans, the Closing Date and the Servicing Fee Rate.
Purchase Proceeds: The amount paid on the related Closing Date
by the Purchaser to Countrywide in exchange for the Mortgage Loan Package
purchased on such Closing Date as set forth in the applicable Purchase
Confirmation.
Purchaser: The Person identified as the "Purchaser" in the
preamble to this Agreement or its successor in interest or any successor or
assign to the Purchaser under this Agreement as herein provided. Any reference
to "Purchaser" as used herein shall be deemed to include any designee of the
Purchaser, so long as such designation was made in accordance with the
limitations set forth in Section 6.07.
Qualification Defect: With respect to a Mortgage Loan, (a) a
materially defective document in the Mortgage File, (b) the absence of a
material document in the Mortgage File, or (c) the breach of any material
representation, warranty or covenant with respect to the Mortgage Loan made by
Countrywide, but, in each case, only if the affected Mortgage Loan would cease
to qualify as a "qualified mortgage" for purposes of the REMIC Provisions.
Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided, which insurer is
approved in such capacity by an Agency.
Qualified Substitute Mortgage Loan: A mortgage loan that must,
on the date of such substitution, (i) have an unpaid principal balance, after
deduction of all scheduled payments due in the month of substitution (or if
more than one (1) mortgage loan is being substituted, an aggregate principal
balance), not in excess of the unpaid principal balance of the repurchased
Mortgage Loan (the amount of any shortfall will be deposited in the Custodial
Account by Countrywide in the month of substitution); (ii) have a Mortgage
Interest Rate not less than, and not more than 1% greater than, the Mortgage
Interest Rate of the repurchased Mortgage Loan; (iii) have a remaining term to
maturity not greater than, and not more than one year less than, the maturity
date of the repurchased Mortgage Loan; (iv) comply with each representation
and warranty (respecting individual Mortgage Loans) set forth in Section 3.02
hereof; (v) shall be the same type of Mortgage Loan (i.e., an Adjustable Rate
Mortgage Loan or a Fixed Rate Mortgage Loan).
Reconstitution Date: The date on which any or all of the
Mortgage Loans serviced under this Agreement shall be removed from this
Agreement and reconstituted as part of a Pass-Through Transfer pursuant to
Section 6.07 hereof. The Reconstitution Date shall be such date which the
Purchaser shall designate in writing.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
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Remittance Date: The eighteenth (18th) day of any month,
beginning with the month next following the month in which the related Cut-off
Date occurs, or if such eighteenth (18th) day is not a Business Day, the first
Business Day immediately following.
REO Disposition: The final sale by Countrywide of any REO
Property or the transfer of the management of such REO Property to the
Purchaser as set forth in Section 4.13.
REO Property: A Mortgaged Property acquired by Countrywide on
behalf of the Purchaser as described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of the Mortgage Loan as of the date
of repurchase plus (ii) interest on such Stated Principal Balance at the
Mortgage Loan Remittance Rate from the last date through which interest has
been paid and distributed to the Purchaser to the last day of the month in
which the repurchase occurs, less amounts received or advanced in respect of
such repurchased Mortgage Loan which such amounts are being held in the
Custodial Account for distribution in the month of repurchase plus (iii) with
respect to any Mortgage Loan included in a Pass-Through Transfer, damages
incurred by the Purchaser or its assignee including the trust in any
securitization in connection with any violation by such Mortgage Loan of any
predatory or abusive lending law.
S&P: Standard and Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor in interest
Security Agreement: With respect to any Cooperative Loan, the
agreement between the owner of the related Coop Shares and the originator of
the related Mortgage Note that defines the terms of the security interest in
such Coop Shares and the related Proprietary Lease.
Servicing Agreement: The agreement dated as of July 1, 2004 and
signed by the Purchaser and Countrywide with respect to the administration and
servicing of the Mortgage Loans.
Servicing Fee: With respect to each Mortgage Loan, the amount
of the annual fee the Purchaser shall pay to Countrywide, which shall, for a
period of one full month, be equal to one-twelfth of the product of (i) the
Servicing Fee Rate and (ii) the Stated 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 computed. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion of such Monthly Payment collected by Countrywide, or as
otherwise provided herein. Subject to the foregoing, and with respect to each
Mortgage Loan, Countrywide shall be entitled to receive its Servicing Fee
through the disposition of any related REO Property and the Servicing Fee
payable with respect to any REO Property shall be based on the Stated
Principal Balance of the related Mortgage Loan at the time of foreclosure.
Servicing Fee Rate: With respect to any Mortgage Loan, the rate
per annum set forth in the applicable Trade Confirmation or Purchase
Confirmation.
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Servicing LP: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as
servicer hereunder.
Stated Principal Balance: With respect to each Mortgage Loan as
of any date of determination: (i) the unpaid principal balance of the Mortgage
Loan at the Cut-off Date after giving effect to payments of principal due on
or before such date, whether or not received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Trade Confirmation: A letter agreement substantially in the
form of Exhibit D hereto executed by Countrywide and the Purchaser prior to
the applicable Closing Date confirming the terms of a prospective purchase and
sale of a Mortgage Loan Package.
Transaction Documents: With respect to any Mortgage Loan, the
related Trade Confirmation, the related Purchase Confirmation and this
Agreement.
Updated LTV: With respect to any Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the date of determination
divided by the value of the related Mortgaged Property as determined by a
recent appraisal of the Mortgaged Property.
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 Pass-Through Transfer.
ARTICLE II.
PRE-CLOSING AND CLOSING PROCEDURES
Section 2.01. Books and Records; Transfers of Mortgage Loans
From and after the sale of the Mortgage Loans to the Purchaser,
all rights arising out of the Mortgage Loans including but not limited to all
funds received on or in connection with the Mortgage Loans on account of
interest and principal due after the Cut-off Date, shall be held by the
Servicer in trust for the benefit of the Purchaser as owner of the Mortgage
Loans, and the Servicer shall retain record title to the related Mortgage
Loans 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
Countrywide's balance sheet and other financial statements as a sale of assets
by Countrywide. Countrywide 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, Countrywide 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 FNMA or FHLMC,
including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by FNMA or FHLMC, and periodic inspection reports as required by
Section 3.15 of the Servicing Agreement. To the extent that original documents
are not required for purposes of realization of Liquidation Proceeds or
Insurance Proceeds, documents maintained by Countrywide may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not
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limited to, optical imagery techniques so long as Countrywide complies with the
requirements of the FNMA or FHLMC Selling and Servicing Guide, as amended from
time to time.
Section 2.02. Due Diligence by the Purchaser.
Review of Credit File. Prior to the Closing Date, Countrywide
shall make available to the Purchaser the Credit File for each Preliminary
Mortgage Loan in the related Preliminary Mortgage Loan Package and shall
accommodate reasonable requests by the Purchaser to provide personnel and
documents as necessary to facilitate the review. The Purchaser shall have the
right to review the Credit File for each such Preliminary Mortgage Loan, at
Countrywide's offices or such other location agreed upon by the Purchaser and
Countrywide, for the purpose of determining whether each Preliminary Mortgage
Loan conforms in all material respects to the applicable terms contained in
the Transaction Documents, which determination shall be made in the
Purchaser's reasonable and good faith discretion. In the event that the
Purchaser rejects any Preliminary Mortgage Loan based on such review,
Countrywide shall have the opportunity, at the discretion of the Purchaser, to
substitute replacement Preliminary Mortgage Loans satisfying the requirements
set forth above, and the Purchaser shall have the right to review any such
replacement Preliminary Mortgage Loan(s) in the manner contemplated above.
Such examination may be made by the Purchaser or its designee, at its expense,
at any reasonable time before the Closing Date. Such underwriting by the
Purchaser or its designee shall not impair or diminish the rights of the
Purchaser or any of its successors under this Agreement with respect to a
breach of the representations and warranties contained in this Agreement. The
fact that the Purchaser or its designee has conducted or has failed to conduct
any partial or complete examination of the Mortgage Files shall not affect the
Purchaser's or any of its successors' rights to demand repurchase or other
relief or remedy provided for in this Agreement.
Section 2.03. Identification of Mortgage Loan Package.
At least three (3) Business Days prior to the Closing Date, the
Purchaser shall identify those Preliminary Mortgage Loans that the Purchaser
intends to be included in the Mortgage Loan Package.
Section 2.04. Credit Document Deficiencies Identified During
Due Diligence.
If, with respect to a Mortgage Loan Package, the related
Purchase Confirmation identifies any Mortgage Loan for which the related
Credit File is missing material documentation (as used therein, the "Missing
Credit Documents"), Countrywide agrees to use its best efforts to procure each
such Missing Credit Document within sixty (60) days following the related
Closing Date. In the event of a default by a Mortgagor or any material
impairment of the Mortgaged Property, in either case directly arising from a
breach of Countrywide's obligation to deliver the Missing Credit Document
within the time specified above, Countrywide shall repurchase such Mortgage
Loan at the Repurchase Price.
Section 2.05. Delivery of Collateral Files.
Custodial Agreement. Countrywide shall, on or before the
Business Day prior to the related Closing Date, pursuant to the Custodial
Agreement deliver and release to the Custodian the Collateral File for each
Mortgage Loan in the Mortgage Loan Package and shall execute, and cause the
Custodian to execute, the Custodial Agreement. The Custodian has
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certified its receipt of all such Collateral Documents required to be
delivered pursuant to the Custodial Agreement. Countrywide will be responsible
for the fees and expenses with respect to the delivery and will be responsible
for the fees and expenses related to the recording of the initial Assignments
of Mortgage (including any fees and expenses related to any preparation and
recording of any intervening or prior assignments of the Mortgage Loans to
Countrywide or to any prior owners of or mortgagees with respect to the
Mortgage Loans) or Form UCC-3's for Cooperative Loans. The Purchaser will be
responsible for the Custodian's fees and expenses with respect to the initial
inventory and maintenance of the Mortgage Loans on or after the Closing Date,
including the costs associated with clearing exceptions.
Countrywide shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 3.1(c) or 5.1 of the
Servicing Agreement within thirty (30) days of their execution, provided,
however, that Countrywide 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 public
recording office to be a true and complete copy of the original within 120
days of its submission for recordation.
In the event the public recording office is delayed in
returning any original document, Countrywide shall deliver to the Custodian
within 360 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. Countrywide
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.
Notwithstanding the foregoing, if the originals or certified
copies required in this Section 2.05 are not delivered as required within 90
days following the Closing Date or as otherwise extended as set forth above,
the related Mortgage Loan shall, upon request of the Purchaser, be repurchased
by Countrywide in accordance with Section 3.03 hereof; provided, however, that
the foregoing repurchase obligation shall not apply in the event Countrywide
cannot deliver such items due to a delay caused by the recording office in the
applicable jurisdiction; provided that Countrywide shall deliver instead a
recording receipt of such recording office or, if such recording receipt is
not available, an Officer's Certificate from Countrywide confirming that such
documents have been accepted for recording. Any such document shall be
delivered to the Purchaser or its designee promptly upon receipt thereof from
the related recording office.
If Countrywide, the Purchaser or the Custodian finds any
document or documents constituting a part of a Mortgage File pertaining to a
Mortgage Loan to be defective (or missing) in any material respect, and such
defect or missing document materially and adversely affects the value of the
related Mortgage Loan or the interests of the Purchaser therein, the party
discovering such defect shall promptly so notify Countrywide. Countywide shall
have a period of 90 days after receipt of such written notice within which to
correct or cure any such defect. Countrywide hereby covenants and agrees that,
if any material defect cannot be corrected or cured,
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Countrywide will, upon the expiration of the applicable cure period described
above, repurchase the related Mortgage Loan in the manner set forth in Section
3.03; provided, however, that with respect to any Mortgage Loan, if such
defect constitutes a Qualification Defect, any such repurchase must take place
within 90 days of the date such defect is discovered.
Notwithstanding the foregoing, with respect to a Mortgage Loan,
if, at the end of such 90-day period, Countrywide delivers an Officer's
Certificate to the Purchaser certifying that Countrywide is using good faith
efforts to correct or cure such defect and identifying progress made, then the
Purchaser shall grant Countrywide an extension to correct or cure such defect.
The extension shall not extend beyond (1) the date that is 90 days after the
date the defect is discovered, or, (2) if the defect is not a Qualification
Defect (as evidenced by an Opinion of Counsel), the date that is 30 days
beyond the original 90-day cure period. If the defect is not a Qualification
Defect, additional 30-day extensions may be obtained pursuant to the same
procedure, as long as Countrywide demonstrates continued progress toward a
correction or cure; provided that no extension shall be granted beyond 180
days from the date on which Countrywide received the original notice of the
defect.
Notwithstanding the foregoing, with respect to a Mortgage Loan,
the failure of the Purchaser to notify Countrywide of any defective or missing
document in a Mortgage File within such 90-day period, or the failure of the
Purchaser to require Countrywide to cure or repurchase the related Mortgage
Loan upon expiration of such 90-day period, shall not constitute a waiver of
its rights hereunder, including the rights with respect to a Mortgage Loan, to
require Countrywide to repurchase the affected Mortgage Loan and the right to
indemnification pursuant to Section 3.03 hereof.
Section 2.06. Purchase Confirmation.
Upon confirmation with the Purchaser of a Mortgage Loan
Package, Countrywide shall prepare and deliver to the Purchaser for execution
the related Purchase Confirmation, executed by an authorized signatory of
Countrywide.
Section 2.07. Closing.
The Closing of each Mortgage Loan Package shall take place on
the related Closing Date and shall be subject to the satisfaction of each of
the following conditions, unless otherwise waived by the prejudiced
party(ies):
(a) All of the representations and warranties of Countrywide
under this Agreement shall be true and correct as of the Closing Date and no
event shall have occurred that, with notice or the passage of time, would
constitute a default under this Agreement;
(b) All of the representations and warranties of the Purchaser
under this Agreement shall be true and correct as of the Closing Date and no
event shall have occurred that, with notice or the passage of time, would
constitute a default under this Agreement;
(c) Both parties shall have executed and delivered the related
Purchase Confirmation and Custodial Agreement;
(d) Countrywide shall have delivered and released to the
Custodian all documents required pursuant to this Agreement and the Custodial
Agreement; and
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(e) All other terms and conditions of this Agreement have been
complied with.
Section 2.08. Payment of the Purchase Proceeds.
Subject to the conditions set forth in Section 2.07, and in
consideration for the Mortgage Loan Package to be purchased by the Purchaser
on the related Closing Date, the Purchaser shall pay to Countrywide on such
Closing Date the Purchase Proceeds by wire transfer of immediately available
funds to the account designated by Countrywide on or before the Funding
Deadline.
Section 2.09. Entitlement to Payments on the Mortgage Loans.
With respect to any Mortgage Loan purchased hereunder, the
Purchaser shall be entitled to (a) all scheduled principal due after the
related Cut-off Date; (b) all other recoveries of principal collected after
the related Cut-off Date, except for (i) recoveries of principal collected
after the Cut-off Date and prior to the Closing Date that are reflected in the
Mortgage Loan Schedule, and (ii) all scheduled payments of principal due on or
before the related Cut-off Date; and (c) all payments of interest on such
Mortgage Loan net of interest at the Servicing Fee Rate and the LPMI Fee, if
applicable (minus that portion of any such payment that is allocable to the
period prior to the related Cut-off Date) due after the Cut-off Date.
Section 2.10. Payment of Costs and Expenses.
The Purchaser and Countrywide shall each bear its own costs and
expenses in connection with the purchase and sale of the Mortgage Loans
including any commissions due its sales personnel, the legal fees and expenses
of its attorneys and any due diligence expenses. Without limiting the
generality of the foregoing, any costs and expenses incurred in connection
with recording the Assignment of Mortgage or any subsequent assignment thereof
shall be paid for by the Purchaser.
Section 2.11. MERS Mortgage Loans and the MERS System.
(a) Notwithstanding anything contained in this Agreement to the
contrary, with respect to any MERS Mortgage Loan sold to the Purchaser by
Countrywide pursuant to this Agreement, Countrywide shall cause the
registration of such MERS Mortgage Loan to be changed on the MERS System to
reflect the Purchaser as the beneficial owner of such MERS Mortgage Loan. The
foregoing obligation of Countrywide shall be in lieu of Countrywide delivering
to the Purchaser an Assignment of Mortgage for such MERS Mortgage Loan. With
respect to the Mortgage and intervening assignments related to any MERS
Mortgage Loan, Countrywide shall, in accordance with Section 2.05, provide the
Purchaser with the original Mortgage with evidence of registration with MERS
and, as applicable, the originals of all intervening assignments of the
Mortgage with evidence of recording thereon prior to the registration of the
Mortgage Loan with the MERS System.
(b) In connection with the MERS System, Countrywide is hereby
authorized and empowered, in its own name, to register, or change the
registration of any MERS Mortgage Loan to effectuate such registration.
Further, Countrywide is authorized to cause the removal of any MERS Mortgage
Loan from such registration, and to execute and deliver on behalf of itself
and the Purchaser, any and all instruments of assignment and comparable
instruments with
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respect to any registration and/or removal of such MERS Mortgage Loan on or
from the MERS System.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01. Representations and Warranties Respecting
Countrywide.
Countrywide represents, warrants and covenants to the Purchaser
that, as of each Closing Date:
(a) Organization and Standing. Countrywide is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and is qualified and licensed to transact business in
and is in good standing under the laws of each state where each Mortgaged
Property is located to the extent necessary to ensure the enforceability of
each Mortgage Loan and the servicing of the Mortgage Loan in accordance with
the terms of this Agreement. The execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant to
this Agreement) by Countrywide and the consummation of the transactions
contemplated hereby have been duly and validly authorized. This Agreement
evidences the valid, binding and enforceable obligation of Countrywide; and
all requisite corporate action has been taken by Countrywide to make this
Agreement valid and binding upon Countrywide in accordance with its terms;
(b) Due Authority. Countrywide has the full power and authority
to (i) perform and enter into and consummate all transactions contemplated by
this Agreement and (ii) to sell each Mortgage Loan;
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of Countrywide, which is in the business of selling and servicing
loans, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by Countrywide pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(d) No Conflict. Neither the acquisition or origination of the
Mortgage Loans by Countrywide, the sale of the Mortgage Loans to the
Purchaser, the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of Countrywide's certificate of incorporation or by-laws or result
in a material breach of any legal restriction or any material agreement or
instrument to which Countrywide is now a party or by which it is bound, or
constitute a material default or result in an acceleration under any of the
foregoing, or result in the violation of any material law, rule, regulation,
order, judgment or decree to which Countrywide or its property is subject;
(e) Approved Seller. Countrywide is an approved seller/servicer
for each Agency in good standing and is a mortgagee approved by the Secretary
of HUD. No event has occurred, including a change in insurance coverage, which
would make Countrywide unable to comply with Xxxxxx Xxx, Xxxxxxx Mac or HUD
eligibility requirements;
(f) No Pending Litigation. There is no action, suit,
proceeding, investigation or litigation pending or, to Countrywide's
knowledge, threatened, which either in any one
15
instance or in the aggregate, if determined adversely to Countrywide would
materially and adversely affect the sale of the Mortgage Loans to the
Purchaser, the ability of Countrywide to service the Mortgage Loans hereunder
in accordance with the terms hereof, or Countrywide's ability to perform its
obligations under this Agreement;
(g) 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 Countrywide, of or compliance by
Countrywide with, this Agreement or the consummation of the transactions
contemplated by this Agreement, or if required, such consent, approval,
authorization or order has been obtained prior to the related Closing Date;
(h) Reasonable Servicing Fee. Countrywide acknowledges and
agrees that the Servicing Fee represents reasonable compensation for
performing such services and that the entire Servicing Fee shall be treated by
Countrywide, for accounting and tax purposes, as compensation for the
servicing and administration of the Mortgage Loans pursuant to this Agreement;
(i) Ability to Perform. Countrywide 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. Countrywide is solvent and the sale of
the Mortgage Loans will not cause Countrywide to become insolvent. The sale of
the Mortgage Loans is not undertaken to hinder, delay or defraud any of
Countrywide's creditors;
(j) No Untrue Information. Neither this Agreement nor any
statement, report or other document prepared and furnished, or to be furnished
pursuant to this Agreement or in connection with the transactions contemplated
hereby, by Countrywide contains any untrue statement of fact or omits to state
a fact necessary to make the statements contained therein not misleading;
(k) Sale Treatment. Countrywide has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(l) Fair Credit Report Act. Servicing LP, in its capacity as
servicer for each Mortgage Loan, has fully furnished (or caused to be
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) or their
successors and assigns, on a monthly basis; and
(m) No Brokers' Fees. Countrywide 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.
Section 3.02. Representations and Warranties Regarding
Individual Mortgage Loans.
With respect to each Mortgage Loan (unless otherwise specified
below), Countrywide represents and warrants to the Purchaser as of the related
Closing Date that:
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(a) Mortgage Loan Schedule. The information contained in the
Mortgage Loan Schedule is complete, true and correct in all material respects;
(b) No Delinquencies or Advances. All payments required to be
made and credited prior to the related Cut-off Date for such Mortgage Loan
under the terms of the Mortgage Note have been made; Countrywide has not
advanced funds, or induced, solicited or knowingly received any advance of
funds from a party other than the owner of the Mortgaged Property subject to
the Mortgage, directly or indirectly, for the payment of any amount required
by the Mortgage Loan; and there has been no delinquency of more than thirty
(30) days in any payment by the Mortgagor thereunder during the last twelve
(12) months;
(c) Taxes, Assessments, Insurance Premiums and Other Charges.
There are no delinquent taxes, ground rents, water charges, sewer rents,
assessments, insurance premiums, leasehold payments, including assessments
payable in future installments or other outstanding charges affecting the
related Mortgaged Property;
(d) No Modifications. The terms of the Mortgage Note and the
Mortgage have not been impaired, waived, altered or modified in any respect,
except by written instruments that have been or will be recorded, if necessary
to protect the interests of the Purchaser, and that have been or will be
delivered to the Purchaser, all in accordance with this Agreement. The
substance of any such waiver, alteration or modification has been approved by
the primary mortgage guaranty insurer, if any, and by the title insurer, to
the extent required by the related policy and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the primary
mortgage insurer, if any, and the title insurer, to the extent required by the
policy, and which assumption agreement is part of the Collateral File and the
terms of which are reflected in the Mortgage Loan Schedule if executed prior
to the Closing Date;
(e) No Defenses. The Mortgage Note and the Mortgage are not
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, nor will the operation of any of the terms of
the Mortgage Note and the Mortgage, or the exercise of any right thereunder,
render the Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense
of usury, and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto;
(f) Hazard and Flood Insurance. All buildings upon the
Mortgaged Property are insured in an amount which is not less than the lesser
of (i) the maximum insurable value of the Mortgaged Property and (ii) the
greater if (a) the outstanding principal balance of the Mortgage Loan, and (b)
an amount that would prevent the Mortgagor from becoming a co-insurer, by an
insurer acceptable to an Agency against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, and such insurer is licensed to do business in
the state where the Mortgaged Property is located. All such insurance policies
contain a standard mortgagee clause naming Countrywide, its successors and
assigns as mortgagee, and all premiums thereon have been paid. If, upon the
origination of the Mortgage Loan, the Mortgaged Property was, or was
subsequently deemed to be, in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available), a flood insurance policy that
meets the requirements of the current guidelines of the Federal Insurance
Administration (or any successor thereto) and conforms to the requirements of
an Agency is in
17
effect. The Mortgage obligates the Mortgagor thereunder to maintain all such
insurance at the Mortgagor's expense and, upon the failure of the Mortgagor to
do so, the holder of the Mortgage is authorized to maintain such insurance at
the Mortgagor's expense and to seek reimbursement therefor from the Mortgagor;
(g) Compliance with Applicable Law. Each Mortgage Loan at the
time of origination complied in all material respects with applicable local,
state and federal laws including without limitation usury, truth in lending,
real estate settlement procedures, consumer credit protection, equal credit
opportunity, fair housing, predatory and abusive lending and disclosure laws
applicable to the Mortgage Loan, including applicable regulations, and
Countrywide shall maintain in its possession, available for the Purchaser's
inspection and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements;
(h) No Release of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated, or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission;
(i) Enforceability of Mortgage Documents. The Mortgage Note,
the Mortgage and any related modifications, assignments and assumptions are
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or similar laws;
(j) Valid First Lien on Mortgage Loans that are not Cooperative
Loans. Each related Mortgage is a valid, subsisting and enforceable first lien
or a first priority ownership interest in an estate in fee simple in the
Mortgaged Property, including, for Mortgage Loans that are not Cooperative
Loans, all improvements on the Mortgaged Property, securing the related
Mortgage Note, except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the Mortgage may secure and create a first lien
upon a leasehold estate of the Mortgagor. The lien of the Mortgage is subject
only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of
recording that are 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 that do not adversely affect the Appraised Value (as evidenced
by an appraisal referred to in such definition) of the Mortgaged
Property set forth in such appraisal; and
(iii) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
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Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable first lien and first priority
security interest on the property described therein and Countrywide has full
right to sell and assign the same to the Purchaser.
(k) Valid First Liens on Cooperative Loans: With respect to
each Cooperative Loan, the related Mortgage is a valid, enforceable and
subsisting first security interest on the related cooperative shares securing
the related cooperative note and lease, subject only to (a) liens of the
cooperative for unpaid 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 (b) 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 Security
Agreement. There are no liens against or security interests in the cooperative
shares relating to each Cooperative Loan (except for unpaid maintenance,
assessments and other amounts owed to the related cooperative which
individually or in the aggregate will not have a material adverse effect on
such Cooperative Loan), which have priority equal to or over the Countrywide's
security interest in such cooperative shares;
(l) With respect to each Cooperative Loan, a search for filings
of financing statements has been made by a company competent to make the same,
which company is acceptable to FNMA and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Cooperative
Loan;
(m) With respect to each Cooperative Loan, the related
cooperative corporation that owns title to the related cooperative apartment
building is a "cooperative housing corporation" within the meaning of Section
216 of the Internal Revenue Code, and is in material compliance with
applicable federal, state and local laws which, if not complied with, could
have a material adverse effect on the Mortgaged Property;
(n) With respect to each Cooperative Loan, there is no
prohibition against pledging the shares of the cooperative corporation or
assigning the Cooperative Lease;
(o) Leasehold Interests. With respect to any ground lease to
which a Mortgaged Property may be subject: (i) the Mortgagor is the owner of a
valid and subsisting leasehold interest under such ground lease: (ii) such
ground lease is in full force and effect, unmodified and not supplemented by
any writing or otherwise; (iii) all rent, additional rent and other charges
reserved therein have been fully paid to the extent payable as of the Closing
Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the
leasehold estate, subject to any sublease; (v) the Mortgagor is not in default
under any of the terms of such ground lease, and there are no circumstances
which, with the passage of time or the giving of notice, or both, would result
in a default under such ground lease; (vi) the lessor under such ground lease
is not in default under any of the terms or provisions of such ground lease on
the part of the lessor to be observed or performed; (vii) the lessor under
such ground lease has satisfied any repair or construction obligations due as
of the Closing Date pursuant to the terms of such ground lease; and (viii) the
execution, delivery and performance of the Mortgage do not require the consent
(other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default
under, such ground lease
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(p) Disbursements of Proceeds. The proceeds of the Mortgage
Loan have been fully disbursed, and there is no requirement for future
advances thereunder, and any and all requirements as to completion of any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and recording 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;
(q) Sole Owner. Countrywide is the sole owner and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Countrywide
has good and marketable title thereto, and has full right to transfer and sell
the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
lien, pledge, participation interests, charge, claim or security interest not
specifically set forth in the related Mortgage Loan Schedule and has full
right and authority subject to no interest or participation of, or agreement
with, any other party, to sell and assign each Mortgage Loan pursuant to the
terms of this Agreement;
(r) Title Insurance. Each Mortgage Loan is covered by an ALTA
lender's title insurance policy included in the related Servicing File,
acceptable to an Agency, issued by a title insurer acceptable to an Agency and
qualified to do business in the jurisdiction where the related Mortgaged
Property is located, insuring (subject to the exceptions contained in Section
3.02(j)(i), (ii) and (iii) above) Countrywide, its successors and assigns as
to the first priority lien of the Mortgage. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein.
Countrywide 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 full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
Countrywide, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(s) No Default. 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 Countrywide has not waived any default, breach, violation or
event of acceleration;
(t) 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 law could give rise to such lien) affecting
the related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(u) Origination and Collection Practices. The origination and
collection practices used by Countrywide with respect to each Mortgage Loan
and Mortgage have been in all respects legal, proper, prudent and customary in
the mortgage origination and servicing business. With respect to escrow
deposits and Escrow Payments, if any, all such payments are in the possession
of, or under the control of, Countrywide and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have not been made. No escrow deposits or Escrow Payments or other charges or
payments due Countrywide have been capitalized under any Mortgage or the
related Mortgage Note. All payments have been collected in compliance with
local, state and federal law and the terms of the related
20
Mortgage Note. With respect to Adjustable Rate Mortgage Loans, all Mortgage
Interest Rate adjustments have been made in strict compliance with local,
state and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited;
(v) No Condemnation or Damage. Each Mortgaged Property is free
of material damage and waste and there is no proceeding pending or, to the
best of Countrywide's knowledge, threatened for the total or partial
condemnation thereof;
(w) Customary and Enforceable Provisions. The Mortgage contains
customary and enforceable provisions such as to render the rights and remedies
of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby including (a) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (b)
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;
(x) Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage;
(y) Appraisal. Unless the Mortgage Loan was underwritten
pursuant to one of Countrywide's streamline documentation programs, the Credit
File contains an appraisal of the related Mortgaged Property signed prior to
the approval of the Mortgage Loan application by an appraiser who meets the
minimum requisite qualifications of an Agency for appraisers, duly appointed
by the originator, that had no interest, direct or indirect in the Mortgaged
Property, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan; the appraisal is in a form acceptable to an
Agency, with such riders as are acceptable to such Agency; furthermore, the
appraisal type for each Mortgage Loan is accurately reflected on the Mortgage
Loan Schedule;
(z) Trustee for Deed of Trust. In the event the Mortgage
constitutes 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 payable by
the Purchaser to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(aa) Private Mortgage Insurance. Each Mortgage Loan, with an
LTV at origination in excess of eighty percent (80%) is and will be subject to
a PMI Policy issued by an insurer acceptable to FNMA or FHLMC, in at least
such amounts as required by FHMA or FHLMC. All provisions of such PMI Policy
have been and are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. Any Mortgage subject
to any such PMI Policy obligates the Mortgagor thereunder to maintain such
insurance and to pay all premiums and charges in connection therewith or, in
the case of a lender paid mortgage insurance policy, the premiums and charges
are included in the Mortgage Interest Rate for the Mortgage Loan;
(bb) Lawfully Occupied. At origination, the Mortgaged Property
was lawfully occupied under applicable law. To the best of Countrywide's
knowledge, 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 certificates
21
of occupancy, have been made or obtained from the appropriate authorities. No
improvements violate local zoning laws;
(cc) Assignment of Mortgage. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;
(dd) Form of Mortgage Note and Mortgage. The Mortgage Note and
Mortgage are on forms acceptable to an Agency;
(ee) Predatory Lending Regulations; High Cost Loans. None of
the Mortgage Loans are classified as (a) "high cost" loans under the Home
Ownership and Equity Protection Act of 1994 or (b) "high cost," "threshold,"
"predatory" or "covered" loans or "High Cost Home Loans" under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology);
(ff) Consolidation of Future Advances. Any future advances made
to the Mortgagor 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. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Location and Type of Mortgaged Property. The Mortgaged
Property is located in the state identified in the Mortgage Loan Schedule and
consists of a single parcel (or more than one contiguous parcels) of real
property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development or a townhouse;
(hh) No Additional Collateral. 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 (j) above
(ii) Servicemembers Civil Relief Act. The Mortgagor has not
notified Countrywide, and Countrywide has no knowledge of any relief requested
or allowed to the Mortgagor under the Servicemembers Civil Relief Act or any
similar state law;
(jj) Payment Terms. The Mortgage Note is payable on the first
day of each month in equal monthly installments of principal and interest (or
interest, in the case of any Mortgage Loan for which monthly payments consist
of only interest for a period of time specified on the Mortgage Loan
Schedule), (provided that, the installments of interest are subject to change
due to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date with respect to an Adjustable Rate Mortgage, and interest is
calculated and payable in arrears) providing for full amortization by maturity
over a scheduled term of no more than 30 years. No Mortgage Loan converts,
pursuant to the terms of the related Mortgage Note, from having interest
accrue on the principal amount thereof based on an adjustable rate to having
interest accrue based on a fixed rate, and no Mortgage Loan has a shared
appreciation or other contingent interest feature, or permits negative
amortization. The Mortgage Interest Rate, Lifetime Rate Cap, each applicable
Periodic Rate Cap and each applicable Interest Adjustment
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Date for each Mortgage Loan are as set forth for such Mortgage Loan in the
Mortgage Loan Schedule;
(kk) Origination. At the time the Mortgage Loan was originated,
the originator was a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act or a
savings and loan association, a saving bank, a commercial bank or similar
banking institution which is supervised by a Federal or State authority.
(ll) Loan-to-Value Ratio; Modifications; No Foreclosures. The
Loan-to-Value Ratio of each Mortgage Loan was no greater than 100% at the time
of its origination or refinancing, as applicable. No Mortgage Loan is subject
to a written foreclosure agreement or pending foreclosure proceedings;
(mm) Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with Countrywide's underwriting guidelines in
effect at the time of origination with exceptions thereto exercised in a
reasonable manner;
(nn) Adverse Selection. Countrywide used no adverse selection
procedures in selecting the Mortgage Loan from among the outstanding
first-lien residential mortgage loans owned by it which were available for
inclusion in the Mortgage Loan Package;
(oo) Environmental Matters. To the best of Countrywide's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
standards and there exists no violation of any local, state or federal
environmental law, rule or regulation. There is no pending action or
proceeding directly involving any Mortgaged Property of which Countrywide is
aware in which compliance with any environmental law, rule or regulation is an
issue. To the best of Countrywide's knowledge, nothing further remains to be
done to satisfy in full all requirements of each such law, rule or regulation
consisting a prerequisite to use and enjoyment of said property;
(pp) No Bankruptcy. 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 Closing Date, Countrywide has not received notice
that any Mortgagor is a debtor under any state or federal bankruptcy or
insolvency proceeding;
(qq) No Additional Payments. There is no obligation on the part
of Countrywide or any other party to make payments in addition to those made
by the Mortgagor;
(rr) Georgia Fair Lending Act. None of the Mortgage Loans is
subject to the Georgia Fair Lending Act, as amended;
(ss) No Credit Insurance Policies. No proceeds from any
Mortgage Loan were used to purchase single-premium credit insurance policies
as part of the origination of, or as a condition to closing, such Mortgage
Loan;
(tt) Prepayment Penalty Term. No Mortgage Loan will impose a
prepayment premium in violation of federal, state or local law or regulations;
and
23
(uu) Qualified Mortgage. Each Mortgage Loan is a "qualified
mortgage" within Section 860G(a)(3) of the Code.
Section 3.03 Remedies for Breach of Representations and
Warranties.
(a) Notice of Breach. 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 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
Collateral Documents or Credit File. Upon discovery by either Countrywide or
the Purchaser of a breach of any of the foregoing representations and
warranties that materially and adversely affects the value of one or more of
the related Mortgage Loans, the party discovering such breach shall give
prompt written notice to the other.
(b) Cure or Repurchase. Within ninety (90) days from the
earlier of either discovery by or notice to Countrywide of a breach of a
representation or warranty that materially and adversely affects the value of
a Mortgage Loan or the Mortgage Loans, Countrywide shall use its best efforts
to cure such breach in all material respects, and, if such breach cannot be
cured, Countrywide 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 Countrywide of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by Countrywide at the Repurchase Price.
(c) Substitution or Repurchase. If the breach shall involve a
representation or warranty set forth in Section 3.02, Countrywide may at the
discretion of the Purchaser, rather than repurchase the Mortgage Loan as
provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Loans. If Countrywide has no Qualified
Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any
repurchase of a Mortgage Loan(s) pursuant to the 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 the Purchaser on the next
scheduled Remittance Date, 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. At the time of repurchase or
substitution, the Purchaser and Countrywide shall arrange for the reassignment
of such Mortgage Loan and release of the related Collateral File to
Countrywide and the delivery to Countrywide of any documents held by the
Purchaser or its designee relating to such Mortgage Loan. In the event
Countrywide is authorized to substitute a Qualified Substitute Mortgage Loan
for a repurchased Mortgage Loan, Countrywide shall, simultaneously with such
reassignment, give written notice to the Purchaser that substitution has taken
place and identify the Qualified Substitute Mortgage Loan(s). In connection
with any such substitution, Countrywide shall be deemed to have made as to
such Qualified Substitute Mortgage Loan(s) the representations and warranties
except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution.
Countrywide shall effect such substitution by delivering to the Purchaser the
Collateral Documents for such Qualified Substitute Mortgage Loan(s).
Countrywide shall deposit in the Custodial Account the Monthly Payment less
the Servicing Fee due on such Qualified Substitute Mortgage Loan(s) in the
month following the date of such substitution. Monthly Payments due with
respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by Countrywide. For the month of substitution,
24
distributions to the Purchaser shall include the Monthly Payment due on any
substituted Mortgage Loan in the month of substitution, and Countrywide shall
thereafter be entitled to retain all amounts subsequently received by
Countrywide in respect of such substituted Mortgage Loan.
For any month in which Countrywide substitutes a Qualified
Substitute Mortgage Loan for a repurchased Mortgage Loan, Countrywide 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 substituted Mortgage Loans
(after application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by
Countrywide in the month of substitution pursuant to Section 5.01.
Accordingly, on the date of such substitution, Countrywide shall deposit from
its own funds into the Custodial Account an amount equal to the amount of such
shortfall. Notwithstanding the above, in no event shall Countrywide substitute
a loan that has been placed in a trust with respect to a securitization.
In addition to such cure and repurchase obligations,
Countrywide shall indemnify the Purchaser and hold it harmless against any
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 by any third party that is based on or
grounded upon, or resulting from, a breach of Countrywide representations and
warranties contained in this Agreements; provided however, indemnification
shall not be available for any economic losses of the Purchaser due to
reinvestment losses, loss of investment income or any other special, indirect
or consequential losses or damages.
Section 3.04 Accrual of Cause of Action.
Any cause of action against Countrywide relating to or arising
out of the breach of any representations and warranties made in Sections 3.01
or 3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by the Purchaser or notice thereof by Countrywide to the Purchaser, (ii)
failure by Countrywide to cure such breach or repurchase such Mortgage Loan as
specified above, and (iii) demand upon Countrywide by the Purchaser for
compliance with the relevant provisions of this Agreement.
Section 3.05 Representations and Warranties Respecting the
Purchaser.
The Purchaser represents, warrants and covenants to Countrywide
that, as of each Closing Date:
(a) Organization and Standing. The Purchaser is duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and is qualified to transact business in and is in good
standing under the laws of each state in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such qualification;
(b) Due Authority. The Purchaser has the full power and
authority to perform, and to enter into and consummate, all transactions
contemplated by this Agreement; the Purchaser has the full power and authority
to purchase and hold each Mortgage Loan;
25
(c) No Conflict. Neither the acquisition of the Mortgage Loans
by the Purchaser pursuant to this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Purchaser's
charter or by-laws or result in a material breach of any legal restriction or
any material agreement or instrument to which the Purchaser is now a party or
by which it is bound, or constitute a material default or result in an
acceleration under any of the foregoing, or result in the violation of any
material law, rule, regulation, order, judgment or decree to which the
Purchaser or its property is subject;
(d) No Pending Litigation. There is no action, suit,
proceeding, investigation or litigation pending or, to the Purchaser's
knowledge, threatened, which either in any one instance or in the aggregate,
if determined adversely to the Purchaser would adversely affect the purchase
of the Mortgage Loans by the Purchaser hereunder, or the Purchaser's ability
to perform its obligations under this Agreement; and
(e) 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 Purchaser of or compliance by the
Purchaser with this Agreement or the consummation of the transactions
contemplated by this Agreement (including, but not limited to, any approval
from HUD), or if required, such consent, approval, authorization or order has
been obtained prior to the related Closing Date.
(f) Securities. Without conceding that the Mortgage Loans are
securities, the Purchaser hereby makes the following representations,
warranties and agreements, which shall have been deemed to have been made as
of each Closing Date:
(i) the Purchaser understands that the Mortgage Loans have
not been registered under the 1933 Act or the securities laws
of any state;
(ii) 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;
(iii) the Purchaser has been furnished with all
information regarding he Mortgage Loans which it has requested
to date from Countrywide; and
(iv) 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 1933 Act or which would render the disposition of any
Mortgage Loan a violation of Section 5 of the 1933 Act or
26
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 3.06 Indemnification by the Purchaser.
The Purchaser shall indemnify Countrywide 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 Purchaser's representations
and warranties contained in Section 3.05 above.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicing LP to Act as Servicer.
Servicing LP shall service and administer Mortgage Loans sold
pursuant to this Agreement in accordance with the terms of the Servicing
Agreement and shall have full power and authority, acting alone, to do or
cause to be done any and all things, in connection with such servicing and
administration, that Servicing LP may deem necessary or desirable and
consistent with the terms of the Servicing Agreement. In servicing and
administering the Mortgage Loans, Servicing LP shall employ procedures in
accordance with the customary and usual standards of practice of prudent
mortgage servicers, and exercise the same care that it customarily employs and
exercises in servicing and administering mortgage loans for its own account.
ARTICLE V.
COVENANTS BY COUNTRYWIDE
Section 5.01 Indemnification by Countrywide; Third Party
Claims.
Countrywide shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
reasonable and necessary attorneys' 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 Countrywide to perform its obligations hereunder
including its obligations to service and administer the Mortgage Loans in
compliance with the terms of this Agreement. Notwithstanding the foregoing,
the Purchaser shall indemnify Countrywide 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 Countrywide may sustain in any way related to (a) actions or
inactions of Countrywide which were taken or omitted upon the instruction or
direction of the Purchaser, or (b) the failure of the Purchaser to perform its
obligations hereunder.
Countrywide and the Purchaser shall immediately notify the
other if a claim is made upon such party by a third party with respect to this
Agreement or the Mortgage Loans. Upon the prior written consent of the
Purchaser, which consent shall not be unreasonably withheld, Countrywide shall
assume the defense of any such claim and pay all expenses in connection
therewith, including attorneys' 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 Purchaser promptly shall reimburse Countrywide for
all costs, fees or expenses advanced by it pursuant to this paragraph except
when the claim in any way results from, relates to or arises
27
out of any liability, obligation, act or omission of Countrywide (other than
acts or omissions taken or omitted at the direction of the Purchaser),
including without limitation, Countrywide's indemnification obligation
hereunder, any repurchase obligation of Countrywide hereunder including
Sections 2.04, 2.05 and 3.03, or the failure of Countrywide to service and
administer the Mortgage Loans and otherwise perform its obligations hereunder
in strict compliance with the terms of this Agreement.
Section 5.02 [Reserved.]
Section 5.03 Merger or Consolidation of Countrywide.
Countrywide shall keep in full effect its existence, rights and
franchises as a corporation under the laws of the United States or under the
laws of one of the states thereof, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans, and to perform
its duties under this Agreement.
Notwithstanding anything to the contrary contained herein, any
Person into which Countrywide may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
Countrywide shall be a party, or any Person succeeding to the business of
Countrywide, shall be the successor of Countrywide hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that the successor or surviving Person
shall be an institution whose deposits are insured by FDIC or a company whose
business is the origination and servicing of mortgage loans, unless otherwise
consented to by the Purchaser, which consent shall not be unreasonably
withheld, and shall be qualified to service mortgage loans on behalf of an
Agency.
Section 5.04 Limitation on Liability of Countrywide and Others.
Neither Countrywide nor any of the officers, employees or
agents of Countrywide shall be under any liability to the Purchaser for any
action taken, or for refraining from taking any action, in good faith pursuant
to this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect Countrywide or any such person against any breach
of warranties or representations made herein, or the failure to perform its
obligations in compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement. Countrywide and any
officer, employee or agent of Countrywide 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. Notwithstanding anything to the
contrary contained in this Agreement, unless one or more Event of Default by
Countrywide shall occur and shall not have been remedied within the time
limits set forth in Section 7.1 of the Servicing Agreement, the Purchaser
shall not record or cause to be recorded an Assignment of Mortgage with the
recording office. To the extent the Purchaser records with the recording
office as permitted herein an Assignment of Mortgage which designates the
Purchaser as the holder of record of the Mortgage, the Purchaser agrees that
it shall (i) provide Countrywide with immediate notice of any action with
respect to the Mortgage or the related Mortgaged Property and ensure that the
proper department or person at Countrywide receives such notice; and (ii)
immediately complete, sign and return to Countrywide any document reasonably
requested by Countywide to comply with
28
its servicing obligations, including without limitation, any instrument
required to release the Mortgage upon payment in full of the obligation or
take any other action reasonably required by Countrywide. The Purchaser
further agrees that Countrywide shall have no liability for the Purchaser's
failure to comply with the subsections (i) or (ii) in the foregoing sentence.
Countrywide shall have no liability to the Purchaser and 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 expenses or
liability; provided, however, that Countrywide may, with the consent of the
Purchaser, undertake any such action which it may deem necessary or desirable
to protect the Purchaser's interests in the Mortgage Loans. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Purchaser will be
liable, and Countrywide shall be entitled to be reimbursed therefor from the
Purchaser upon written demand except when such expenses, costs and liabilities
are subject to Countrywide's indemnification under Section 5.01.
Section 5.05 No Transfer of Servicing.
Countrywide acknowledges that the Purchaser acts in reliance
upon Countrywide's independent status, the adequacy of its servicing
facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section, Countrywide shall not assign this
Agreement or the servicing rights hereunder, without the prior written
approval of the Purchaser, which consent may not be unreasonably withheld;
provided, however, that nothing in this Agreement shall limit the right of
Countrywide to assign the servicing rights hereunder to Servicing LP.
ARTICLE VI.
MISCELLANEOUS
Section 6.01 Notices.
All demands, notices and communications required to be provided
hereunder shall be in writing and shall be deemed to have been duly given if
mailed, by registered or certified mail, postage prepaid, and return receipt
requested, or, if by other means, when received by the other party at the
address as follows:
(i) to Countrywide:
Countrywide Home Loans, Inc.
0000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Executive Vice President
With copy to: General Counsel
(ii) the Purchaser:
To the address and contact set forth in the related Purchase
Confirmation
29
or such other address as may hereafter be furnished to the
other party by like notice. Any such demand, notice or communication hereunder
shall be deemed to have been received on the date delivered to or received at
the premises of the addressee (as evidenced, in the case of registered or
certified mail, by the date noted on the return receipt).
Section 6.02 Sale Treatment.
It is the express intention of the parties that the
transactions contemplated by this Agreement be, and be construed as, a sale of
the Mortgage Loans by Countrywide and not a pledge of the Mortgage Loans by
Countrywide to the Purchaser to secure a debt or other obligation of
Countrywide. Consequently, the sale of each Mortgage Loan shall be reflected
as a sale on Countrywide's business records, tax returns and financial
statements. Accordingly, Countrywide and the Purchaser shall each treat the
transaction for federal income tax purposes as a sale by Countrywide, and a
purchase by the Purchaser, of the Mortgage Loans.
Section 6.03 Exhibits.
The Exhibits to this Agreement and each Trade Confirmation and
Purchase Confirmation executed by Countrywide and the Purchaser are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
Section 6.04 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the
other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other Subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision;
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(g) reference to the Transaction Documents or any other
document referenced herein shall include all exhibits, schedules or other
supplements thereto.
30
Section 6.05 Reproduction of Documents.
This Agreement and all documents relating thereto, including
(a) consents, waivers and modifications which may hereafter be executed, (b)
documents received by any party at the closing, and (c) financial statements,
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 6.06 Further Agreements.
Countrywide shall execute and deliver to the Purchaser and the
Purchaser shall be required to execute and deliver to Countrywide such
reasonable and appropriate additional documents, instruments or agreements as
may be necessary or appropriate to effectuate the purposes of this Agreement.
Section 6.07 Assignment of Mortgage Loans by the Purchaser;
Pass-Through Transfers.
(a) The Purchaser may, subject to the terms of this Agreement,
sell and transfer one or more of the Mortgage Loans; provided, however, that
the transferee will not be deemed to be the Purchaser hereunder unless such
transferee shall agree in writing to be bound by the terms of this Agreement
and an original counterpart of the document evidencing such agreement shall
have been executed by the Purchaser and the transferee and delivered to
Countrywide. Notwithstanding the foregoing, no transfer shall be effective if
such transfer would result in there being more than four (4) "Purchasers"
outstanding hereunder with respect to any Mortgage Loan Package. Any trust to
which Mortgage Loans may be transferred pursuant to Section 6.07(b) hereunder
shall constitute a single Purchaser for the purposes of the preceding
sentence.
(b) The Purchaser and Countrywide agree that with respect to
some or all of the Mortgage Loans, the Purchaser, at its sole option, but
subject to the limitations set forth in Section 6.07(a) hereof, may effect
Pass-Through Transfers, retaining Countrywide as the servicer thereof or
subservicer if a master servicer is employed, or as applicable the
"seller/servicer." On the related Reconstitution Date, the Mortgage Loans
transferred shall cease to be covered by this Agreement; provided, however,
that, in the event that any Mortgage Loan transferred pursuant to this Section
6.07 is rejected by the related transferee, Countrywide shall continue to
service such rejected Mortgage Loan on behalf of the Purchaser in accordance
with the terms and provisions of this Agreement. Countrywide shall cooperate
with the Purchaser in connection with each Pass-Through Transfer in accordance
with this Section 6.07. In connection therewith Countrywide shall:
(i) negotiate in good faith and execute any
seller/servicer agreement reasonably required to effectuate the
Pass-Through Transfer, provided such agreement creates no
greater obligation or cost on the part of Countrywide than
otherwise set forth in this Agreement, and provided further
that Countrywide shall
31
be entitled to a servicing fee under that agreement at a
rate per annum no less than the Servicing Fee Rate; and
(ii) provide as applicable:
(A) information pertaining to Countrywide of the type
and scope customarily included in offering documents for
residential mortgage-backed securities transactions
involving multiple loan originators;
(B) such opinions of counsel, letters from auditors,
and certificates of public officials or officers of
Countrywide as are reasonably believed necessary by the
trustee, any rating agency or the Purchaser, as the case
may be, in connection with such Pass-Through Transfer. The
Purchaser shall pay all third party costs associated with
the preparation of the information described in clause
(ii)(A) above and the delivery of any opinions, letters or
certificates described in this clause (ii)(B). Countrywide
shall not be required to execute any seller/servicer
agreement unless a draft of the agreement is provided to
Countrywide at least 10 days before the Reconstitution
Date; and
(C) certain additional information with respect to
the Mortgage Loans, including but not limited to (x)
payment history and (y) income verification, asset
verification and verification of employment.
(c) In connection with any Pass-Through Transfer, Countrywide
shall make all representations and warranties with respect to the Mortgage
Loans as of the Closing Date and with respect to Countrywide itself as of the
closing date of each whole loan transfer or Pass-Through Transfer.
(d) In connection with any Pass-Through Transfer, Countrywide
shall indemnify, defend and hold harmless the Purchaser from and against any
and all losses, claims, expenses, damages or liabilities to which the
Purchaser may be subject to as a result of (i) any inaccuracy or omission in
information provided to the Purchaser pursuant to Section 6.07(b)(ii)(C) and
(ii) any untrue statement of any material fact contained in any information
(such information, the "Countrywide Information") prepared and furnished to
the Purchaser by Countrywide for inclusion in any related offering document or
prospectus (collectively, "Offering Materials"), or arise out of, or are based
upon, any omission in the Countrywide Information necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and will reimburse the Purchaser for damages or expenses
reasonably incurred by it; provided, however, that Countrywide shall be liable
only insofar as such untrue statement or omission relates solely to the
Countrywide Information in the Offering Materials furnished to the Purchaser
by Countrywide specifically for inclusion in the Prospectus Supplement. The
Purchaser shall indemnify, defend and hold harmless Countrywide from and
against any and all losses, claims, expenses, damages or liabilities to which
Countrywide may be subject to as a result of any untrue statement of any
material fact contained in any Offering Materials, or arise out of, or are
based upon, any omission in any information included in the Offering Materials
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and will reimburse Countrywide for
damages or expenses reasonably incurred by it; provided, however, that
Purchaser shall be liable only insofar as such untrue statement or omission
does not relate to the Countrywide Information in the
32
Offering Materials furnished to the Purchaser by Countrywide specifically for
inclusion in the Prospectus Supplement; and.
(e) All Mortgage Loans not sold or transferred pursuant to
Pass-Through Transfers 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.
Section 6.08 Conflicts between Transaction Documents.
In the event of any conflict, inconsistency or ambiguity
between the terms and conditions of this Agreement, the Servicing Agreement,
and either the related Trade Confirmation or the related Purchase
Confirmation, the terms of the related Purchase Confirmation shall control. In
the event of any conflict, inconsistency or ambiguity between the terms and
conditions of the Trade Confirmation and the Purchase Confirmation, the terms
of the Purchase Confirmation shall control.
Section 6.09 Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York and the State of California applicable
to agreements entered into and wholly performed within that state.
Section 6.10 Severability Clause.
Any part, provision, representation or warranty of this
Agreement which is prohibited or which is held to be void or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to an amendment to this Agreement which places each party in the
same or as economic position as each party would have been in except for such
invalidity.
Section 6.11 Successors and Assigns.
This Agreement shall bind and inure to the benefit of and be
enforceable by Countrywide and the Purchaser and the respective permitted
successors and assigns of Countrywide and the Purchaser.
33
Section 6.12 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create
a partnership or joint venture between the parties hereto and the services of
Countrywide shall be rendered as an independent contractor and not as agent
for the Purchaser.
Section 6.13 Solicitation of Mortgagor.
From and after the Closing Date, Countrywide hereby agrees that
it will not take any action or permit or cause any action to be taken by any
of its agents or affiliates, or by any independent contractors or independent
mortgage brokerage companies on its behalf, to personally, by telephone or
mail, solicit the mortgagor under any Mortgage Loan for the purpose of
refinancing such Mortgage Loan; provided, that Countrywide may solicit any
mortgagor from whom it or its servicing affiliate has received a request for
verification of mortgage, a request for demand for payoff, a mortgagor
initiated written or verbal communication indicating a desire to prepay the
related Mortgage Loan, or the mortgagor initiates a title search, provided
further, it is understood and agreed that promotions undertaken by Countrywide
or any of its affiliates which (i) concern optional insurance products or
other additional projects or (ii) are directed to the general public at large,
including, without limitation, mass mailings based on commercially acquired
mailing lists, newspapers, radio and television advertisements shall not
constitute solicitation nor is Countrywide prohibited from responding to
unsolicited requests or inquiries made by a mortgagor or an agent of a
mortgagor. Notwithstanding the foregoing, the following solicitations, if
undertaken by Countrywide or any affiliate of Countrywide, shall not be
prohibited: (i) solicitations that are directed to the general public at
large, including, without limitation, mass mailings based on commercially
acquired mailing lists and newspaper, radio, television and other mass media
advertisements and (ii) borrower messages included on, and statement inserts
provided with, the monthly statements sent to mortgagors; provided, however,
that similar messages and inserts are sent to borrowers of other mortgage
loans serviced by Countrywide.
Section 6.14 Confidentiality.
Countrywide, the Purchaser and their agents shall keep
confidential and shall not divulge to any person, other than affiliates,
without the written consent of the other party, the terms of this agreement,
except (i) to the extent required by law or judicial order or to enforce its
rights or remedies under this agreement, the Servicing Agreement, or any
applicable agreements, (ii) to the extent such information enters into the
public domain other than through the wrongful act of Countrywide or the
Purchaser, as the case may be, (iii) as is necessary in working with legal
counsel, auditors, rating agencies, agents, taxing authorities or other
governmental agencies, or (iv) in order to disclose to any and all persons,
without limitation of any kind, the structure and tax aspects of this sale or
any transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to the Purchaser related to such sale, transaction
and tax aspects, all as contemplated by Section 1.6011-4T(b)(3) (or any
successor provision) of the Treasury Regulations promulgated under Section
6011 of the Internal Revenue Code of 1986.
Moreover, Countrywide understands and agrees that this
Agreement, the Servicing Agreement, any other agreements executed in
connection with the sale and servicing contemplated hereunder, any agreements
executed in connection with a securitization of the Mortgage Loans, and any
offering circulars or other disclosure documents produced in
34
connection with such securitization are confidential and proprietary to the
Purchaser, and Countrywide agrees to hold such documents confidential and not
to divulge such documents to anyone except (a) to the extent required by law
or judicial order or to enforce its rights or remedies under this letter
agreement or the Agreements, (b) to the extent such information enters into
the public domain other than through the wrongful act of Countrywide (c) as is
necessary in working with legal counsel, auditors, agents, taxing authorities
or other governmental agencies, or (d) in order to disclose to any and all
persons, without limitation of any kind, the structure and tax aspects of this
sale or such securitization and all materials of any kind (including opinions
or other tax analyses) that are provided to the Purchaser related to such
sale, securitization and tax aspects, all as contemplated by Section
1.6011-4T(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Internal Revenue Code of 1986. The
rights and obligations set forth in this paragraph shall survive the Closing
Date and shall not merge into the closing documents but shall be independently
enforceable by the parties hereto.
Section 6.15 Entire Agreement.
This Agreement and the related Trade Confirmation and Purchase
Confirmation constitute the entire understanding between the parties hereto
with respect to each Mortgage Loan Package and supersede all prior or
contemporaneous oral or written communications regarding same. Countrywide and
the Purchaser understand and agree that no employee, agent or other
representative of Countrywide or the Purchaser has any authority to bind such
party with regard to any statement, representation, warranty or other
expression unless said statement, representation, warranty or other expression
is specifically included within the express terms of this Agreement or the
related Trade Confirmation or Purchase Confirmation. Neither this Agreement
nor the related Trade Confirmation or Purchase Confirmation shall be modified,
amended or in any way altered except by an instrument in writing signed by
both parties.
(SIGNATURE PAGE TO FOLLOW)
35
IN WITNESS WHEREOF, Countrywide and the Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
COUNTRYWIDE HOME LOANS, INC.,
the Seller
By:
------------------------------------
Name:
Title:
XXXXXXX SACHS MORTGAGE COMPANY,
the Purchaser
By: Xxxxxxx Xxxxx Real Estate Funding Corp.,
its General Partner
By:
-------------------------------------
Name
Title:
EXHIBIT A
COLLATERAL DOCUMENTS
1. Mortgage Note: The original Mortgage Note (or, if acceptable to the
Purchaser, a lost note affidavit in a form acceptable to an Agency)
bearing all intervening endorsements, endorsed "Pay to the order of
_____________, without recourse" and signed in the name of the last
endorsee by an authorized officer thereof.
2. Assignment of Mortgage: Unless the Mortgage Loan is a MERS Mortgage
Loan, the original Assignment of Mortgage in blank.
3. Guarantee: The original of any guarantee executed in connection with
the Mortgage Note.
4. Mortgage: The original Mortgage with evidence of recording thereon or,
if such original Mortgage has not been returned to Countrywide on or
prior to the Closing Date by the public recording office where such
Mortgage has been delivered for recordation, a copy of such Mortgage
certified by Countrywide to be a true and complete copy of the
original Mortgage sent for recordation.
5. Modifications: Unless the Mortgage Loan is a MERS Mortgage Loan, the
originals of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon, if any.
6. Intervening Assignments: The originals of all intervening assignments
of Mortgage with evidence of recording thereon, provided that such
originals have been returned to Countrywide by the public recording
office where such intervening assignment of Mortgage has been
delivered for recordation.
7. Cooperative Loans: With respect to each Cooperative Loan: (i) an
original copy of the Cooperative Lease naming the Mortgagor, as
tenant, or an original copy of the assignment of the Cooperative Lease
to Mortgagor together with the original copy of all intervening
assignments showing a complete and unbroken chain of title from the
original tenant to Mortgagor and an original undated assignment, in
blank, of the Cooperative Lease executed by Mortgagor; (ii) the
original stock certificate in the name of the Mortgagor together with
an undated original stock power relating to such stock certificate
executed in blank by the Mortgagor; (iii) a fully executed original
recognition agreement in substantially the same form as a standard
"AZTECH" form and the original assignment thereof from Countrywide to
the Purchaser together with the original copy of all intervening
assignments showing a complete and unbroken chain of title from the
originator of the Mortgage Loan to the Purchaser; (iv) copies of the
UCC-1 financing statement naming the originator of the Cooperative
Loan, as secured party, with evidence of recording thereon and, if
applicable, the executed UCC-3 financing statements (Assignment) or
other appropriate UCC financing statements required by applicable
state law evidencing a complete and unbroken chain of title from the
originator of the
A-1
Cooperative Loan to Countrywide, with evidence of recording thereon,
(v) an executed UCC-3 financing statement (Assignment), or other
appropriate UCC financing statement required by applicable state law,
evidencing the assignment by Countrywide to the Purchaser of its
interest in the Cooperative Loan, with evidence of recording thereon
and (vi) a consent from the cooperative corporation in connection
with the Mortgagor's acquisition of the coop apartment
8. Power of Attorney: Original power of attorney, if applicable.
A-2
EXHIBIT B
FORM OF PURCHASE CONFIRMATION
[COUNTRYWIDE LETTERHEAD]
[DATE]
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxx
Re: Purchase Confirmation ($x.xmm) (Deal No. xxxx-xxx)
---------------------------------------------------------
Ladies and Gentlemen:
This purchase confirmation (the "Purchase Confirmation")
between Countrywide Home Loans, Inc. ("Countrywide") and Xxxxxxx Xxxxx
Mortgage Company ("Purchaser") sets forth our agreement pursuant to which
Purchaser is purchasing, and Countrywide is selling, on a servicing-retained
basis, those certain mortgage loans identified in Exhibit A hereto and more
particularly described herein (the "Mortgage Loans").
The purchase, sale and servicing of the Mortgage Loans as
contemplated herein shall be governed by that certain Master Mortgage Loan
Purchase Agreement dated as of July 1, 2004, between Countrywide and Purchaser
(as amended herein and otherwise, the "Agreement"). By executing this Purchase
Confirmation, each of Countrywide and Purchaser again makes, with respect to
itself and each Mortgage Loan, as applicable, all of the covenants,
representations and warranties made by each such party in the Agreement,
except as the same may be amended by this Purchase Confirmation.
All exhibits hereto are incorporated herein in their entirety.
In the event there exists any inconsistency between the Agreement and this
Purchase Confirmation, the latter shall be controlling notwithstanding
anything contained in the Agreement to the contrary. All capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned
to such terms in the Agreement.
1. Assignment and Conveyance of Mortgage Loans. Upon
Purchaser's payment of the Purchase Proceeds in accordance with Section 2.08
of the Agreement, Countrywide shall sell, transfer, assign and convey to
Purchaser, without recourse, but subject to the terms of the Purchase
Confirmation and the Agreement, all of the right, title and interest of
Countrywide in and to the Mortgage Loans, excluding the servicing rights
relating thereto. Each Mortgage Loan shall be serviced by Countrywide pursuant
to the terms of the Agreement.
2. Defined Terms. As used in the Agreement, the following
defined terms shall have meanings set forth below with respect to the related
Mortgage Loan Package.
B-1
a. Closing Date: [DATE].
b. Cut-off Date: [DATE].
c. Cut-off Date Balance:
[d. Index: On each Interest Adjustment Date, the
applicable index rate shall be a rate per annum equal to [the weekly
average yield on U.S. Treasury securities adjusted to a constant
maturity of one year, as published by the Board of Governors of the
Federal Reserve System in Statistical Release No. H.15] [the average
of interbank offered rates for six-month U.S. dollar denominated
deposits in the London market (LIBOR), as published [in the Wall
Street Journal] [by Xxxxxx Mae] [the 11th District Cost of Funds as
made available by the Federal Home Loan Bank] [the weekly average
yield on certificates of deposit adjusted to a constant maturity of
six months as published by the Board of Governors of the Federal
Reserve System in Statistical Release No. H.15 or a similar
publication.]]
e. Missing Credit Documents: As set forth in Exhibit [C]
hereto.
Notwithstanding anything contained in Section 2.04 of the Agreement to
the contrary, Countrywide's obligation to repurchase from the
Purchaser the Mortgage Loan related to a Missing Credit Document shall
occur only in the event of a default by a Mortgagor or any material
impairment of the Mortgaged Property directly arising a breach of
Countrywide's obligation to deliver the Missing Credit Document within
the time specified in Section 2.04 of the Agreement.
f. Pending Mortgage Loans: As set forth in Exhibit [C]
hereto.]
g. Purchase Proceeds: With respect to [the Mortgage
Loans] [each Mortgage Loan], and as set forth in Exhibit [A] and
Exhibit [B] hereto, the sum of (a) the product of (i) the Cut-off Date
Balance of [such Mortgage Loan] [such Mortgage Loans], and (ii) the
purchase price percentage set forth in Exhibit [A] hereto for such
[Mortgage Loan] [Mortgage Loans], and (b) accrued interest from the
Cut-off Date through the day prior to the Closing Date, inclusive.
h. Servicing Fee Rate: [0.25%] [0.375%] [With respect to
the period prior to the initial Interest Adjustment Date, [0.25]% and,
thereafter, [0.375]%].
3. Description of Mortgage Loans. Each Mortgage Loan complies
with the specifications set forth below in all material respects.
a. Loan Type: Each Mortgage Loan is a [Adjustable Rate]
[Balloon] [Fixed Rate] Mortgage Loan.
x. Xxxx Position: Each Mortgage Loan is secured by a
perfected [first] [second] lien Mortgage.
c. Underwriting Criteria: Each Mortgage Loan [was
underwritten generally in accordance with Countrywide's credit
underwriting guidelines in effect at the time such Mortgage Loan was
originated] [conforms to the Xxxxxx Mae or Xxxxxxx
B-2
Mac mortgage eligibility criteria (as such criteria applies to
Countrywide) and is eligible for sale to, and securitization by, Xxxxxx
Mae or Xxxxxxx Mac] [at the time of origination was underwritten to
guidelines which are consistent with an institutional investor-quality
mortgage loan].
Kindly acknowledge your agreement to the terms of this Purchase
Confirmation by signing in the appropriate space below and returning this
Purchase Confirmation to the undersigned. Telecopy signatures shall be deemed
valid and binding to the same extent as the original.
Sincerely, Agreed to and Accepted by:
COUNTRYWIDE HOME LOANS, INC. XXXXXXX SACHS MORTGAGE COMPANY
By:___________________________
By: Name:
--------------------------------------- Title:
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
B-3
EXHIBIT 4
AMENDMENT REG AB
EXECUTION VERSION
AMENDMENT REG AB TO THE MASTER MORTGAGE LOAN PURCHASEAND SERVICING AGREEMENT
This is Amendment Reg AB ("Amendment Reg AB"), dated as of
January 1, 2006 by and between Xxxxxxx Sachs Mortgage Company (the
"Purchaser"), and Countrywide Home Loans, Inc. (the "Company") to that certain
Master Mortgage Loan Purchase Agreement dated as of July 1, 2004 by and
between the Company and the Purchaser and that certain Servicing Agreement
dated as of July 1, 2004 by and between Countrywide Home Loans Servicing, LP
and the Purchaser (as amended, modified or supplemented, the "Existing
Agreement").
W I T N E S S E T H
WHEREAS, the Company and the Purchaser have agreed, subject to
the terms and conditions of this Amendment Reg AB that the Existing Agreement
be amended to reflect agreed upon revisions to the terms of the Existing
Agreement.
Accordingly, the Company and the Purchaser hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Agreement is hereby amended as follows:
1. Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Existing Agreement. The Existing Agreement is hereby
amended by adding the following definitions in their proper alphabetical
order:
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2(g)(i)(A)(1).
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Exchange Act. The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were either (x) 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 or (y)
individually re-underwritten by the Company to the Designated Guidelines at
the time such Mortgage Loans were acquired by the Company; (ii) 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 (iii) 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 either
Persons from which it purchased mortgage loans properly applied the
underwriting criteria designated by the Company or the Mortgage Loans
purchased by the Company substantially comply with the Designated Guidelines.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: An agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties in connection with
a Reconstitution with respect to any or all of the Mortgage Loans serviced
under the Agreement.
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.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction subject to Regulation AB
involving either (1) a sale or other transfer of some or all of the Mortgage
Loans directly or indirectly to an issuing entity in connection with an
issuance of publicly offered, rated mortgage-backed securities or (2) an
issuance of publicly offered, rated 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.
Servicer: As defined in Section 2(c)(iii).
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Static Pool Information: Static pool information as described in Item
1105.
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
2
performed by the Company under this Agreement or any Reconstitution Agreement
that are identified in Item 1122(d) of Regulation AB; provided, however, that
the term "Subservicer" shall not include any master servicer, or any special
servicer engaged at the request of a Depositor, Purchaser or investor in a
Securitization Transaction (unless such master servicer or special servicer
has sole contractual privity with the Company), nor any "back-up servicer" or
trustee performing servicing functions on behalf of a Securitization
Transaction.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
2. The Purchaser and the Company agree that the Existing Agreement is hereby
amended by adding the following provisions:
(a) Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose
of Article 2 of this Agreement is to facilitate compliance by the Purchaser
and any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Because Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act and there are market uncertainties with respect to the
disclosure that investors in privately offered securities may request, the
parties agree over time to negotiate in good faith with respect to the
provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder. 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, and agrees to
negotiate in good faith with the Purchaser or any Depositor with regard to any
reasonable requests 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 to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary to permit the Purchaser or such
Depositor 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
necessary in order to effect such compliance.
The Purchaser agrees that it will cooperate with the Company and
provide sufficient and timely notice of any information requirements
pertaining to a Securitization Transaction. The Purchaser will make all
reasonable efforts to contain requests for information, reports or any
3
other materials to items required for compliance with Regulation AB, and shall
not request information which is not required for such compliance.
(b) Additional Representations and Warranties of the Company.
(i) The Company shall be deemed to represent to the Purchaser
and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 2(c) that,
except as disclosed in writing to the Purchaser or such Depositor
prior to such date: (i) 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; (ii) 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; (iii) 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;
(iv) 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; (v)
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; (vi) 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 (vii) 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.
(ii) If so requested by the Purchaser or any Depositor on any
date following the date on which information is first provided to the
Purchaser or any Depositor under Section 2(c), the Company shall,
within ten Business Days following such request, confirm in writing
the accuracy of the representations and warranties set forth in
paragraph (i) of this Section or, if any such representation and
warranty is not accurate as of the date of such request, provide
reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.
(c) Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall
(1) within ten 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
reasonably required for compliance with Regulation AB, the information and
materials specified in paragraphs (i), (ii), (iii) and (vi) of this Section
2(c), and (2) as promptly as practicable following notice to or discovery by
the Company, provide to the Purchaser and any
4
Depositor (as required by Regulation AB) the information specified in
paragraph (iv) of this Section.
(i) If so requested by the Purchaser or any Depositor, the
Company shall provide such information regarding (x) the Company, as
originator of the Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), or (y) as
applicable, each Third-Party Originator, and (z) as applicable, each
Subservicer, as is requested for the purpose of compliance with Items
1103(a)(1), 1105 (subject to paragraph (ii) below), 1110, 1117 and
1119 of Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) to the extent material, 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; if material, information
regarding the size and composition of the originator's
origination portfolio; and information that may be material 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 brief description of any material legal or
governmental proceedings pending (or known to be contemplated
by a governmental authority) against the Company, each
Third-Party Originator, if applicable, and each Subservicer;
and
(D) a description of any affiliation or relationship
between the Company, each Third-Party Originator, if
applicable, 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
within eight days in advance of such Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
5
(ii) If so requested by the Purchaser or any Depositor, and
required by Regulation AB, 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 (a) the Company, if the Company is an
originator of Mortgage Loans (including as an acquirer of Mortgage
Loans from a Qualified Correspondent, if applicable), and/or (b) as
applicable, each Third-Party Originator. Such Static Pool Information
shall be prepared by the Company (or, if applicable, the Third-Party
Originator) on the basis of its reasonable, good faith interpretation
of the requirements of Item 1105(a)(1)-(3) of Regulation AB. To the
extent that there is reasonably available to the Company (or
Third-Party Originator, as applicable) 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 agreeable to
the Company, the Purchaser and the Depositor.
Promptly following notice or discovery of a material error, as
determined in the Company's judgment, 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) during the applicable offering period for
the securities, 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), industry standard procedures letters of certified
public accountants 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, if applicable, 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
shall be limited to any Sponsor, any Depositor, any broker dealer
acting as underwriter, placement agent or initial purchaser with
respect to a Securitization Transaction or any other party that is
reasonably and customarily entitled to receive such
6
statements and letters in a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally
applicable document accompanied by a reliance letter authorizing
reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If reasonably 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 reasonably requested for the purpose of compliance
with Items 1108 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 reasonable
determination 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 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;
7
(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; and
(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.
(iv) If reasonably requested by the Purchaser or any Depositor
for the purpose of satisfying its reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the
Company shall (or shall cause each Subservicer and, if applicable, any
Third-Party Originator to) (a) notify the Purchaser and any Depositor
in writing of (1) any material litigation or governmental proceedings
pending against the Company, any Subservicer or any Third-Party
Originator and (2) 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 clause (D) of paragraph (i) of this Section 2(c)
(and any other parties identified in writing by the requesting party)
with respect to such Securitization Transaction, and (b) 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
applicable Reconstitution Agreement related thereto 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
8
15 calendar days prior to the effective date of such succession or
appointment, (x) written notice to the Purchaser and any Depositor
of such succession or appointment and (y) in writing, all
information reasonably requested by the Purchaser or any Depositor
in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to any class of asset-backed securities.
(vi) In addition to such information as the Company, as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, if reasonably requested by the Purchaser or any Depositor,
the Company shall provide such information, regarding the servicing of
the Mortgage Loans as is reasonably required to facilitate preparation
of distribution reports in accordance with Item 1121 of Regulation AB.
(d) Servicer Compliance Statement.
On or before March 5 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, to the effect that (i) a review of the
Company's servicing activities during the immediately preceding calendar year
(or applicable portion thereof) and of its performance under the servicing
provisions of this Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer's supervision, and (ii) to
the best of such officers' knowledge, based on such review, the Company has
fulfilled all of its servicing 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.
(e) Report on Assessment of Compliance and Attestation.
(i) On or before March 5 of each calendar year, commencing in
2007, the Company shall:
(A) deliver to the Purchaser and any Depositor a report
regarding the Company's assessment of compliance with the
Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange
Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, and shall address each of
the applicable Servicing Criteria specified on a certification
substantially in the form of Exhibit A hereto delivered to the
Purchaser concurrently with the execution of this Agreement;
(B) deliver to the Purchaser and any Depositor a report
of a registered public accounting firm 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;
9
(C) cause each Subservicer and each Subcontractor
pursuant to Section 2(f)(ii) that "participates in the
servicing function" within the meaning of Item 1122 of
Regulation AB (each, a "Participating Entity"), 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 2(e); and
(D) deliver to the Purchaser, Depositor or 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 in the form attached hereto as Exhibit A;
provided that such certification delivered by the Company may
not be filed as an exhibit to, or included in, any filing with
the Commission, unless required by applicable law.
The Company acknowledges that the party identified in clause (i)(D)
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.
(ii) Each assessment of compliance provided by a Subservicer
pursuant to Section 2(e)(i)(A) shall address each of the applicable
Servicing Criteria specified on a certification substantially in the
form of Exhibit A 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 Participating
Entity pursuant to Section 2(e)(i)(C) need not address any elements of
the Servicing Criteria other than those specified by the Company
pursuant to Section 2(f).
(f) 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 as servicer under
this Agreement or any related Reconstitution Agreement unless the Company
complies with the provisions of paragraph (i) of this Subsection (f). 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 as
servicer under this Agreement or any related Reconstitution Agreement unless
the Company complies with the provisions of paragraph (ii) of this Subsection
(f).
(i) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subservicer. If required by Regulation AB, 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 and with Sections 2(b), 2(c)(iii), 2(c)(v),
2(d), and 2(e) of this Agreement to the same extent as if such
Subservicer were the Company, and to provide
10
the information required with respect to such Subservicer under
Section 2(c)(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 2(d), any assessment of
compliance and attestation required to be delivered by such
Subservicer under Section 2(e) and any certification required to be
delivered to the Person that will be responsible for signing the
Sarbanes Certification under Section 2(e) as and when required to be
delivered.
(ii) It shall not be necessary for the Company to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. If required by Regulation AB, the Company shall
promptly upon request provide to the Purchaser and any Depositor (or
any designee of the Depositor, such as a master servicer or
administrator) a written description of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying
(A) the identity of each such Subcontractor, (B) which (if any) of
such Subcontractors are Participating Entities, and (C) which elements
of the Servicing Criteria will be addressed in assessments of
compliance provided by each Participating Entity identified pursuant
to clause (B) of this paragraph.
The Company shall cause any such Participating Entity used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Section 2(e) of this Agreement to
the same extent as if such Participating Entity were the Company. The Company
shall be responsible for obtaining from each Participating Entity and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Participating Entity under
Section 2(e), in each case as and when required to be delivered.
(g) Indemnification; Remedies.
(i) The Company shall indemnify the Purchaser, the Depositor
and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for the 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 Person who controls any of such parties (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 and employees of each of the foregoing and of the Depositor,
and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that
any of them may sustain arising out of or based upon:
(A)(1) any untrue statement of a material fact contained
or alleged to be contained in any written information, written
report, certification or other material provided under this
Amendment Reg AB by or on behalf of the Company, or provided
under this Amendment Reg AB by or on behalf of any Subservicer,
11
Participating Entity or, if applicable, Third-Party Originator
(collectively, the "Company Information"), or (2) 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
misleading; provided, by way of clarification, that clause (2)
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;
(B) any failure by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver
any information, report, certification, accountants' letter or
other material when and as required under this Agreement,
including any failure by the Company to identify pursuant to
Section 2(f)(ii) any Participating Entity; or
(C) any breach by the Company of a representation or
warranty set forth in Section 2(b)(i) or in a writing furnished
pursuant to Section 2(b)(ii) and made as of a date prior to the
closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or
any breach by the Company of a representation or warranty in a
writing furnished pursuant to Section 2(b)(ii) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause (i)(B)
of this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the 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 Participating Entity or any Third-Party
Originator.
(ii) (A) Any failure by the Company, any Subservicer, any
Participating Entity or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other
material when and as required under this Amendment Reg AB , which
continues unremedied for three Business Days after receipt by the
Company and the applicable Subservicer, Subcontractor, or Third-Party
Originator of written notice of such failure from the Purchaser or
Depositor shall, except as provided in clause (B) of this paragraph,
constitute an Event of Default with respect to the Company under this
Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser or 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 related thereto without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement related
thereto to the contrary) of any
12
compensation to the Company; provided, however it is understood that
the Company shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by the
Company under this Agreement and/or any applicable Reconstitution
Agreement prior to the date of such termination. Notwithstanding
anything to the contrary set forth herein, 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.
(B) Any failure by the Company, any Subservicer or any
Participating Entity to deliver any information, report,
certification or accountants' letter required under Regulation
AB when and as required under Section 2(d) or 2(e), including
any failure by the Company to identify a Participating Entity,
which continues unremedied for nine calendar days after receipt
by the Company and the applicable Subservicer, Subcontractor,
or Third-Party Originator of written notice of such failure
from the Purchaser or Depositor 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 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 to the contrary) of any compensation
to the Company; provided, however it is understood that the
Company shall remain entitled to receive reimbursement for all
unreimbursed Monthly Advances and Servicing Advances made by
the Company under this Agreement and/or any applicable
Reconstitution Agreement prior to the date of such termination.
Notwithstanding anything to the contrary set forth herein, 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.
(C) The Company shall promptly reimburse the Purchaser (or any
affected designee of the Purchaser, such as a 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 Mortgage Loans to a successor servicer.
The provisions of this paragraph shall not limit whatever rights the
Company, 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.
3. Notwithstanding any other provision of this Amendment Reg AB, the Company
shall seek the consent of the Purchaser for the utilization of all
Subservicers and Participating Entities, when required by and in accordance
with the terms of the Existing Agreement.
4. The Existing Agreement is hereby amended by adding the Exhibit attached
hereto as Exhibit A to the end thereto. References in this Amendment Reg AB to
"this Agreement" or
13
words of similar import (including indirect references to the Agreement) shall
be deemed to be references to the Existing Agreement as amended by this
Amendment Reg AB. Except as expressly amended and modified by this Amendment
Reg AB, the Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms. In the event of a conflict between
this Amendment Reg AB and any other document or agreement, including without
limitation the Existing Agreement, this Amendment Reg AB shall control.
5. This Amendment Reg AB may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement. This Amendment Reg AB
will become effective as of the date first mentioned above. This Amendment Reg
AB shall bind and inure to the benefit of and be enforceable by the Company
and the Purchaser and the respective permitted successors and assigns of the
Company and the successors and assigns of the Purchaser.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and year first above written.
XXXXXXX SACHS MORTGAGE COMPANY
Purchaser
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
COUNTRYWIDE HOME LOANS, INC.
Company
By: ___________________________________
Name: ___________________________________
Title: ___________________________________
Signature page to Amendment Reg AB
A-2
EXHIBIT A
FORM OF ANNUAL CERTIFICATION
Re: The [_________________] agreement dated as of [______], 200[___] (the
"Agreement"), among [IDENTIFY PARTIES]
I, ________________________________, the _______________________ of
Countrywide Home Loans, Inc., certify to [the Depositor][or] [Master
Servicer], and [its] officers, with the knowledge and intent that they will
rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company'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 Company during 200[ ] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
(2) Based on my knowledge, the Company 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 Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company 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 Company as 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 Company has
fulfilled its obligations under the Agreement in all material
respects; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or 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.
A-1
Date: _________________________
By: _______________________________
Name
Title:
A-2
EXHIBIT B
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name of
Subservicer] shall address, at a minimum, the applicable criteria identified
below as "Applicable Servicing Criteria":
---------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------
General Servicing Considerations
---------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
---------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
1122(d)(1)(ii) servicing activities.
---------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
---------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
---------------------------------------------------------------------------------------------
Cash Collection and Administration
---------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days following
receipt, or such other number of days specified in the
1122(d)(2)(i) transaction agreements.
---------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor
1122(d)(2)(ii) or to an investor are made only by authorized personnel.
---------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
1122(d)(2)(iii) as specified in the transaction agreements.
---------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set
1122(d)(2)(iv) forth in the transaction agreements.
---------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
---------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access.
---------------------------------------------------------------------------------------------
B-1
---------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by someone
other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
---------------------------------------------------------------------------------------------
Investor Remittances and Reporting
---------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated
in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by
its rules and regulations; and (D) agree with investors' or
the trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
1122(d)(3)(i) Servicer.
---------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements.
---------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
---------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment,
1122(d)(3)(iv) or custodial bank statements.
---------------------------------------------------------------------------------------------
Pool Asset Administration
---------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
1122(d)(4)(i) loan documents.
---------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
---------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool
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
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number
of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage loan
1122(d)(4)(iv) documents.
---------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
---------------------------------------------------------------------------------------------
B-2
---------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
---------------------------------------------------------------------------------------------
Reference Criteria
---------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
1122(d)(4)(vi) asset documents.
---------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
---------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on
at least a monthly basis, or such other period specified in
the transaction agreements, and describe the entity's
activities in monitoring delinquent mortgage loans
including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed
1122(d)(4)(viii) temporary (e.g., illness or unemployment).
---------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for
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
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
1122(d)(4)(x) number of days specified in the transaction agreements.
---------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such
support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of
1122(d)(4)(xi) days specified in the transaction agreements.
---------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late
1122(d)(4)(xii) payment was due to the obligor's error or omission.
---------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
---------------------------------------------------------------------------------------------
B-3
---------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
---------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
---------------------------------------------------------------------------------------------
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: ____________________________________________
By: ____________________________________________
Name: ____________________________________________
Title: ____________________________________________
B-4
