Exhibit 99.7
RECONSTITUTED SERVICING AGREEMENT
THIS RECONSTITUTED SERVICING AGREEMENT (this "Agreement"), entered
into as of the 1st day of August, 2006, by and among XXXXXXXXX MORTGAGE HOME
LOANS, INC., a Delaware corporation ("Xxxxxxxxx" or the "Seller"), XXXXX FARGO
BANK, N.A., as servicer (the "Servicer") and XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5 (the "Trust"), and acknowledged by XXXXX FARGO BANK, N.A., as master
servicer (the "Master Servicer"), recites and provides as follows:
RECITALS
WHEREAS, the Seller has conveyed certain mortgage loans identified on
Schedule I hereto (the "Mortgage Loans") to Structured Asset Mortgage
Investments II, Inc., a Delaware corporation ("XXXX XX"), which in turn has
conveyed the Mortgage Loans to the Xxxxxxxxx Mortgage Securities Trust 2006-5
(the "Trust"), under a pooling and servicing agreement dated as of August 1,
2006 (the "Pooling and Servicing Agreement"), among LaSalle Bank National
Association, as Trustee (the "Trustee"), the Master Servicer, XXXX XX, as seller
(referred to herein as the "Depositor"), Wilmington Trust Company, as Delaware
trustee, Xxxxx Fargo Bank, N.A., as securities administrator and the Seller.
WHEREAS, the Mortgage Loans are currently being serviced by the
Servicer pursuant to an Amended and Restated Flow Servicing Agreement between
Citigroup Global Markets Realty Corp, ("Citigroup") and the Servicer dated as of
March 1, 2006 as amended by the First Amendment to Amended and Restated Flow
Servicing Agreement, dated August 1, 2006 and the Assignment and Conveyance
Agreement (06-W58), dated July 25, 2006 (collectively, the "Flow Servicing
Agreement"), a copy of which is attached hereto as Exhibit B;
WHEREAS, the Seller, Citigroup, and the Servicer entered into an
Assignment, Assumption and Recognition Agreement dated August 28, 2006 (the
"AAR"), pursuant to which, among other things, the Seller purchased the Mortgage
Loans from Citigroup and the Servicer agreed to service and administer the
Mortgage Loans in accordance with the terms of the Flow Servicing Agreement, as
modified by the AAR (collectively the "Servicing Agreement"), a copy of which is
attached hereto as Exhibit C;
WHEREAS, the Seller desires that the Servicer continue to service the
Mortgage Loans, and the Servicer has agreed to do so in accordance with the
Servicing Agreement as modified in the attached Exhibit A;
WHEREAS, the Master Servicer and any successor master servicer shall
be obligated, among other things, to supervise the servicing of the Mortgage
Loans on behalf of the Trustee, and shall have the right, under certain
circumstances, to terminate the rights and obligations of the Servicer upon the
occurrence and continuance of an Event of Default by the Servicer under this
Agreement;
WHEREAS, the Seller and the Servicer desire that the provisions of the
Servicing Agreement shall apply to the Mortgage Loans, but only to the extent
provided herein and that
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this Agreement shall constitute a "Reconstitution Agreement" as defined under
the Servicing Agreement which shall govern the Mortgage Loans for so long as
such Mortgage Loans remain subject to the provisions of the Pooling and
Servicing Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Seller and the Servicer hereby
agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
Agreement, including Exhibit A hereto, shall have the meanings ascribed to such
terms in the Servicing Agreement.
2. Servicing. The Servicer agrees, with respect to the Mortgage Loans,
to perform and observe the duties, responsibilities and obligations that are to
be performed and observed under the provisions of the Servicing Agreement,
except as otherwise provided herein and on Exhibit A hereto, and that the
provisions of the Servicing Agreement, as so modified, are and shall be a part
of this Agreement to the same extent as if set forth herein in full.
3. Servicer. From and after August 31, 2006, the Servicer shall and
does hereby recognize that the Seller will transfer the Mortgage Loans and
assign its rights under the Servicing Agreement to XXXX XX and that XXXX XX will
thereafter transfer the Mortgage Loans and assign its rights under the Servicing
Agreement and this Agreement to the Trust. The Servicer acknowledges and agrees
that from and after August 31, 2006 (i) the Trust will be the owner of the
Mortgage Loans, (ii) the Servicer shall look solely to the Trust for performance
of any obligations of the Seller insofar as they relate to the enforcement of
the representations, warranties and covenants with respect to the Mortgage
Loans, (iii) the Trust (including the Trustee and, with respect to the servicing
of the Mortgage Loans, the Master Servicer acting on the Trust's behalf) shall
have all the rights and remedies available to the Seller insofar as they relate
to the Mortgage Loans, under the Servicing Agreement, including, without
limitation, the enforcement of the document delivery requirements set forth in
Section 2.01 of the Servicing Agreement, and shall be entitled to enforce all of
the obligations of the Servicer thereunder insofar as they relate to the
Mortgage Loans, and (iv) all references to the Purchaser (insofar as they relate
to the rights, title and interest and, with respect to obligations of the
Purchaser, only insofar as they relate to the enforcement of the
representations, warranties and covenants of the Servicer) under the Servicing
Agreement insofar as they relate to the Mortgage Loans, shall be deemed to refer
to the Trust. Neither the Servicer nor the Seller shall further amend or agree
to amend, modify, waive, or otherwise alter any of the terms or provisions of
the Servicing Agreement which amendment, modification, waiver or other
alteration would in any way affect the Mortgage Loans or the Servicer's
performance under the Servicing Agreement with respect to the Mortgage Loans
without the prior written consent of the Trustee and the Master Servicer.
4. Notwithstanding any statement to the contrary in Section 3 above,
the Seller shall and does hereby acknowledge that the indemnification provisions
set forth in Sections 8.01 and 9.01(f) of the Servicing Agreement shall be
available to and for the benefit of
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the Seller, XXXX XX and the Trust (including the Trustee and the Master Servicer
acting on the Trust's behalf).
5. The Servicer hereby acknowledges that Xxxxx Fargo Bank, N.A. has
been appointed as the master servicer of the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and, therefore, has the right to enforce all
obligations of the Servicer under the Servicing Agreement. Such rights will
include, without limitation, the right to terminate the Servicer under the
Servicing Agreement upon the occurrence of an Event of Default thereunder, the
right to receive all remittances required to be made by the Servicer under the
Servicing Agreement, the right to receive all monthly reports and other data
required to be delivered by the Servicer under the Servicing Agreement, the
right to examine the books and records of the Servicer, indemnification rights
and the right to exercise certain rights of consent and approval relating to
actions taken by the Servicer. All assessments, reports and certifications
required to be delivered by the Servicer under this Agreement and the Servicing
Agreement shall include the Master Servicer as an addressee, and the Master
Servicer shall be entitled to rely on all such assessments, reports and
certifications.
6. Representations. The Servicer shall not be obligated or required to
make any further representations and warranties regarding the characteristics of
the Mortgage Loans in connection with the transactions contemplated by the
Pooling and Servicing Agreement and issuance of the Certificates pursuant
thereto. The Servicer does hereby make the representations made in Section 3.01
of the Servicing Agreement as of August 31, 2006.
7. Notices. All notices, consents, certificates and other
communications required to be delivered between or among the parties hereto
(including any third party beneficiary thereof) or required to be provided to
the Trustee shall be in writing, may be in the form of facsimile or electronic
transmission, and shall be deemed received or given when mailed first-class
mail, postage prepaid, addressed to each other party at its address specified
below or, if sent by facsimile or electronic mail, when facsimile or electronic
confirmation of receipt by the recipient is received by the sender of such
notice. Each party may designate to the other parties in writing, from time to
time, other addresses to which notices and communications hereunder shall be
sent. All notices and other written information required to be delivered to the
Master Servicer under this Agreement shall be delivered to the Master Servicer
at the following address:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx Xxxxxxxxxx, Xxxxxxxxx 0000-0
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Xxxxx Fargo Bank, N.A.
ABA# 000-000-000
Account Name: SAS Clearing
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Account No. 0000000000
FFC: 50941400, Xxxxxxxxx 2006-5
All notices and other written information required to be delivered to
the Trustee hereunder shall be delivered to the Trustee at the following
address:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx 2006-5
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices and other written information required to be delivered to
the Seller hereunder shall be delivered to it at the following address:
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxx (Xxxxxxxxx 2006-5)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
All notices and written information required to be delivered to the
Servicer hereunder shall be delivered to the Servicer at the following address:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2302-033
Fax: 000-000-0000
with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
8. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
CHOICE OF LAW RULES EXCEPT FOR SECTION 5-1401 OF THE GENERAL OBLIGATION LAW,
WHICH SHALL APPLY HERETO.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
but all of which counterparts shall together constitute but one and the same
instrument.
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10. Reconstitution. The Seller and the Servicer agree that this
Agreement is a "Reconstitution Agreement" and that the date hereof is the
"Reconstitution Date," each as defined in the Servicing Agreement.
11. REMIC Status. The Servicer is hereby notified, and the Servicer
hereby acknowledges such notice, that the Mortgage Loans will be held in a
securitization pursuant to which a REMIC election will be made.
12. Limitation of Liability. It is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed and delivered by LaSalle
Bank National Association ("LaSalle Bank"), not individually or personally but
solely as the Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) the representations, warranties, covenants,
undertakings and agreements herein made on the part of the Trustee are made and
intended not as personal representations, undertakings and agreements by LaSalle
Bank but are made and intended for the purpose of binding on the Trust, (c)
nothing herein contained shall be construed as creating any liability on LaSalle
Bank, individually or personally, to perform any covenant either expressly or
implied contained herein, all such liability, if any, being expressly waived by
the parties who are signatories to this Agreement and by any person claiming by,
through or under such parties and (d) under no circumstances shall LaSalle Bank
be personally liable for payment of any indemnity, indebtedness, fees or
expenses of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this
Agreement.
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Executed as of the day and year first above written.
XXXXXXXXX MORTGAGE HOME LOANS, INC.,
as Seller
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Xxxxxxx X. Xxxxx
Senior Vice President
XXXXX FARGO BANK, N.A.,
as Servicer
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXXXXXX MORTGAGE SECURITIES TRUST
2006-5
BY: LASALLE BANK NATIONAL
ASSOCIATION, not in its individual
capacity, but solely as Trustee on
behalf of the Trust
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Vice President
Acknowledged By:
XXXXX FARGO BANK, N.A.
as Master Servicer
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT A
Modifications to the Servicing Agreement
1. The definition of "Business Day" in Article I is hereby amended to
read as follows:
Business Day: Any day other than (a) a Saturday or Sunday or
(b) a day on which banking and savings and loan institutions
in the States of California, Delaware, New York, Maryland,
Minnesota, South Carolina or Iowa are authorized or obligated
by law or executive order to be closed.
2. The definition of "Qualified Substitute Mortgage Loan" in Article I
is hereby amended by the addition of the following language at the end of the
first sentence thereof:
and (xii) qualify as a Qualified Substitute Mortgage Loan
under the Pooling and Servicing Agreement.
3. The definition of "Remittance Date" in Article I is hereby amended
to read as follows:
The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately following) of any month.
4. A new definition of "Document Transfer Event" is hereby added to
Article I to read as follow:
Document Transfer Event. The day on which (i) Xxxxx Fargo
Bank, N.A. or any successor thereto is no longer the servicer
of any of the Mortgage Loans, (ii) the senior, unsecured
long-term debt rating of Xxxxx Fargo & Company, is less than
"BBB-" by Fitch Ratings or (iii) any Rating Agency requires
the Servicer to deliver the Retained Mortgage Files (as
defined in the Servicing Agreement) to the Custodian.
5. Section 4.01 (Servicer to Act as Servicer) is modified to add the
following at the end of the second paragraph:
"Further, with respect to any permitted modification, the
Servicer shall determine, in consultation with counsel, that
such a change would not be treated as a "significant
modification" that would cause a deemed exchange under Section
1001(a) of the Code or applicable temporary or final
regulations thereunder at any time when the Mortgage Loan is
held by a REMIC or grantor trust."
6. Section 4.04 (Establishment of and Deposits to Custodial Account)
is hereby amended by deleting the language "the Owner, and/or subsequent
purchasers of
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Mortgage Loans - P&I" at the end of the first sentence in the first paragraph
and replacing it with the phrase "Xxxxxxxxx Mortgage Securities Trust 2006-5."
7. Section 4.05 (Permitted Withdrawals From Custodial Account) is
hereby amended by deleting clause (vii) and replacing it with the following:
"(vii) to reimburse itself for any Monthly Advances, Servicing
Advances and REO expenses after liquidation of the Mortgaged
Property not otherwise reimbursed above;"
8. Section 4.06 (Establishment of and Deposits to Escrow Account) is
hereby amended by deleting the phrase "the Owner and/or subsequent purchasers of
residential Mortgage Loans and various Mortgagers - T&I" at the end of the first
sentence of the first paragraph, and replacing it with the phrase "Xxxxxxxxx
Mortgage Securities Trust 2006-5."
9. Section 4.16 (Title, Management and Disposition of REO Property) is
hereby amended by:
(i) deleting the first paragraph and replacing it with the
following:
"In the event that title to the Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be taken in the name of the Trust."
(ii) adding the following after the third paragraph:
"Not withstanding anything to the contrary herein, in the
event a REMIC election has been made with respect to a
Mortgage Loan, the REO Property shall be sold prior to the
close of the third calendar year beginning after the year in
which title has been taken to such REO Property."
10. A new Section 4.28 (Delivery of Retained File) is added to the
Flow Servicing Agreement to read as follows:
Within sixty (60) days of the occurrence of a Document
Transfer Event, the Servicer shall deliver to the Trustee or
any other party per written instructions from the Trustee, the
additional documents from its Retained Mortgage File (as
defined in the Servicing Agreement).
11. Section 6.04 (Annual Statements as to Compliance) is hereby
deleted in its entirety and replaced as follows:
"On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall deliver to the Owner and any Depositor, or if Xxxxx
Fargo Bank, N.A. is the Master Servicer, to the Master Servicer, a
statement of compliance addressed to the Owner and
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such Depositor or if Xxxxx Fargo Bank, N.A. is the Master Servicer, to
the Master Servicer, and signed by an authorized officer of the
Servicer, to the effect that (a) a review of the Servicer's activities
during the immediately preceding calendar year (or applicable portion
thereof) and of its performance under this Agreement and any
applicable Reconstitution Agreement during such period has been made
under such officer's supervision, and (b) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such
calendar year (or applicable portion thereof) or, if there has been a
failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and
the nature and the status thereof."
12. Section 6.05 (Annual Independent Public Accountant's Servicing
Report) is hereby deleted in its entirety.
13. Section 6.06 (Report on Assessment of Compliance and Attestation)
is hereby deleted in its entirety and replaced as follows:
On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall:
(i) deliver to the Owner and any Depositor or if Xxxxx Fargo
Bank, N.A. is the Master Servicer, to the Master Servicer, a report (in form and
substance reasonably satisfactory to the Owner and such Depositor and if Xxxxx
Fargo Bank, N.A. is the Master Servicer, to such Master Servicer) regarding the
Servicer's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Owner and such Depositor or if Xxxxx Fargo Bank, N.A. is the
Master Servicer, to the Master Servicer, and signed by an authorized officer of
the Servicer and shall address each of the "Applicable Servicing Criteria"
specified on Exhibit C hereto (or those Servicing Criteria otherwise mutually
agreed to by the Owner, the Servicer and any Person that will be responsible for
signing any Sarbanes Certification with respect to a Securitization Transaction
in response to evolving interpretations of Regulation AB);
(ii) deliver to the Owner and any Depositor or if Xxxxx Fargo
Bank, N.A. is the Master Servicer, to the Master Servicer, a report of a
registered public accounting firm reasonably acceptable to the Owner and such
Depositor or if Xxxxx Fargo Bank, N.A. is the Master Servicer, to such Master
Servicer, that attests to, and reports on, the assessment of compliance made by
the Servicer and delivered pursuant to the preceding paragraph. Such attestation
shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under
the Securities Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined
by the Servicer pursuant to Section 4.26(b) to be "participating in the
servicing function" within the
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meaning of Item 1122 of Regulation AB, to deliver to the Purchaser and any
Depositor an assessment of compliance and accountants' attestation as and when
provided in paragraphs (i) and (ii) of this Section 6.06; and
(iv) deliver, and cause each Subservicer and each Subcontractor
described in clause (iii) hereof to deliver to the Owner, any Depositor, any
Master Servicer and any other Person that will be responsible for signing the
certification (a "Sarbanes Certification") required by Rules 13a-14(d) and
15d-14(d) under the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of 2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification, signed by the appropriate officer of
the Servicer, in the form attached hereto as Exhibit D.
The Servicer acknowledges that the parties identified in clause (iv)
above may rely on the certification provided by the Servicer pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser nor any Depositor or Master Servicer will request delivery
of a certification under clause (iv) above unless a Depositor or Master Servicer
is required under the Exchange Act to file an annual report on Form 10-K with
respect to an issuing entity whose asset pool includes the Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(i) shall address each of the Servicing Criteria specified on
Exhibit C hereto delivered to the Owner concurrently with the execution of this
Agreement or, in the case of a Subservicer subsequently appointed as such, on or
prior to the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 6.06(iii) need not address any elements of the
Servicing Criteria other than those specified by the Servicer pursuant to
Section 4.26.
14. Section 6.07 (Remedies) is hereby deleted in its entirety and
replaced as follows:
a. Any failure by the Servicer, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required under
Article IX, Section 4.26, Section 6.04 or Section 6.06, or any breach by the
Servicer of a representation or warranty set forth in Section 9.01(e)(vi)(A), or
in a writing furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date
prior to the closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any breach by the
Servicer of a representation or warranty in a writing furnished pursuant to
Section 9.01(e)(vi)(B) to the extent made as of a date subsequent to such
closing date, shall, except as provided in sub-clause (ii) of this Section,
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Servicer under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Servicer or any
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Servicer as servicer under this Agreement and/or any
applicable Reconstitution Agreement without payment (notwithstanding anything in
this Agreement or any applicable Reconstitution Agreement to the contrary) of
any compensation to the Servicer (and, if the Servicer is servicing any of the
Mortgage Loans in a Securitization Transaction, appoint a successor servicer
reasonably acceptable to any Master Servicer for such Securitization
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Transaction); provided that to the extent that any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Servicer
as servicer, such provision shall be given effect.
b. Any failure by the Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification or accountants'
letter when and as required under Section 6.04 or Section 6.06, including any
failure by the Servicer to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten (10) calendar days after the date on which such
information, report, certification or accountants' letter was required to be
delivered shall constitute an Event of Default with respect to the Servicer
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Owner, any Master Servicer or any Depositor, as applicable, in its
sole discretion to terminate the rights and obligations of the Servicer under
this Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement to the contrary) of any compensation
to the Servicer; provided that to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides for
the survival of certain rights or obligations following termination of the
Servicer as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Company pursuant to this
subparagraph if a failure of the Company to identify a Subcontractor
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB was attributable solely to the role or functions of such
Subcontractor with respect to mortgage loans other than the Mortgage Loans.
c. The Servicer shall promptly reimburse the Owner (or any
designee of the Owner), any Master Servicer and any Depositor, as applicable,
for all reasonable expenses incurred by the Owner (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Servicer as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Owner or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
15. Article IX (Removal of Mortgage Loans From Agreement) is hereby
deleted in its entirety and replaced as follows:
Section 9.01 Removal of Mortgage Loans from Inclusion Under this
Agreement.
The Owner and the Servicer agree that with respect to some or all of
the Mortgage Loans, the Owner, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Servicer
as the servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." In the event that any Mortgage Loan
transferred pursuant to this Section 9.01 is rejected by the transferee, the
Servicer shall continue to service such rejected Mortgage Loan on behalf of the
Owner in accordance with the terms and provisions of this Agreement.
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The Servicer shall cooperate with the Owner in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01; provided that no such Whole Loan Transfer, Agency Sale
or Securitization Transaction shall create a greater obligation or cost on the
part of the Servicer than otherwise set forth in this Agreement. In connection
therewith:
a. the Servicer shall make all representations and warranties
with respect to the Mortgage Loans as of the Closing Date and with respect to
the Servicer itself as of the closing date of each Whole Loan Transfer, Agency
Sale or Securitization Transaction;
b. the Servicer shall negotiate in good faith and execute any
seller/servicer agreements required by the shelf registrant to effectuate the
foregoing;
c. the Servicer shall make representations and warranties (1)
that the Servicer has serviced the Mortgage Loans in accordance with the terms
of this Agreement, provided accurate statements to the Owner pursuant to Section
5.02 of this Agreement, and otherwise complied with all covenants and
obligations hereunder and, (2) that the Servicer has taken no action nor omitted
to take any required action the omission of which would have the effect of
impairing any mortgage insurance or guarantee on the Mortgage Loans;
d. the Servicer shall:
(i) provide such additional representations, warranties,
covenants, opinions of counsel or certificates of 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 Whole Loan Transfers or
Agency Sales. The Owner shall pay all third party costs associated with the
preparation of such information;
(ii) execute any seller/servicer agreements required within
a reasonable period of time after receipt of such seller/servicer agreements
which time shall be sufficient for the Servicer and the Servicer's counsel to
review such seller/servicer agreements. Under this Agreement, the Servicer shall
retain a Servicing Fee for each Mortgage Loan at a Servicing Fee Rate; and
(iii) at any time as required by any Rating Agency, provide
such additional documents from the related Retained Mortgage File to the
Custodian as may be required by such Rating Agency.
a. in connection with any Securitization Transaction, the
Servicer shall (1) within five (5) Business Days following request by the Owner
or any Depositor, provide to the Owner and such Depositor (or, as applicable,
cause each Third-Party Originator and each Subservicer to provide), in writing
and in form and substance reasonably satisfactory to the Owner and such
Depositor, the information and materials specified in paragraphs (i), (ii),
(iii) and (vii) of this subsection (e), and (2) as promptly as practicable
following notice to or discovery by the Servicer, provide to the Owner and any
Depositor (in writing and in form and substance reasonably satisfactory to the
Owner and such Depositor) the information specified in paragraph (iv) of this
subsection (e).
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(i) If so requested by the Owner or any Depositor, the
Servicer shall provide such information regarding (1) the Servicer, as
originator of the Mortgage Loans (including as an acquirer of Mortgage Loans
from a Qualified Correspondent), or (2) each Third-Party Originator, and (3) as
applicable, each Subservicer, as is requested for the purpose of compliance with
Items 1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination
program and how long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of a similar type as the Mortgage
Loans; information regarding the size and composition of the originator's
origination portfolio; and information that may be material, in the good faith
judgment of the Owner or any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or underwriting
criteria for mortgage loans of similar type(s) as the Mortgage Loans and such
other information as the Owner or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Servicer, each
Third-Party Originator and each Subservicer; and
(D) a description of any affiliation or relationship
(of a type described in Item 1119 of Regulation AB) between the Servicer, each
Third-Party Originator, each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified to the Servicer by
the Owner or any Depositor in writing in advance of a Securitization
Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Owner or any Depositor, the
Servicer 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 Owner as
provided below) originated by (1) the Servicer, if the Servicer is an originator
of Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), and/or (2) each Third-Party Originator. Such Static Pool
Information shall be prepared by the Servicer (or Third-Party Originator) on the
basis of its reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Servicer (or Third-Party Originator) Static Pool
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Information with respect to more than one mortgage loan type, the Owner 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 Servicer, and need
not be customized for the Owner or any Depositor. Such Static Pool Information
for each vintage origination year or prior securitized pool, as applicable,
shall be presented in increments no less frequently than quarterly over the life
of the mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a date no
later than 135 days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included or incorporated
by reference. The Static Pool Information shall be provided in an electronic
format that provides a permanent record of the information provided, such as a
portable document format (pdf) file, or other such electronic format reasonably
required by the Owner or the Depositor, as applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Servicer 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
Servicer.
If so requested by the Owner or any Depositor, the Servicer shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Owner or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Servicer's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Owner or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be for
the benefit of such parties as the Owner or such Depositor shall designate,
which may include, by way of example, any sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may take the form
of a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Owner or such
Depositor.
(iii) If so requested by the Owner or any Depositor, the
Servicer shall provide such information regarding the Owner, as servicer of the
Mortgage Loans, and each Subservicer (each of the Servicer and each Subservicer,
for purposes of this paragraph, a "Servicer"), as is requested for the purpose
of compliance with Items 1108, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum:
(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,
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and procedures for, the servicing function it will perform under this Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer's portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Owner or any Depositor,
to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without limitation:
(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 Owner or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the
three-year period immediately preceding the related Securitization Transaction
to the Servicer's policies or procedures with respect to the servicing function
it will perform under this Agreement and any Reconstitution Agreements for
mortgage loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial
condition, to the extent that there is a material risk that an adverse financial
event or circumstance involving the Servicer could have a material adverse
effect on the performance by the Company of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Servicer
on the Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately preceding the
related Securitization Transaction, which may be limited to a statement by an
authorized officer of the Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage loans serviced by it during
such period, or, if such statement would not be accurate, information
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regarding the percentage and type of advances not made as required, and the
reasons for such failure to advance;
(F) a description of the Servicer's processes and
procedures designed to address any special or unique factors involved in
servicing loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts;
(H) information as to how the Servicer defines or
determines delinquencies and charge-offs, including the effect of any grace
period, re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience;
(I) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Servicer; and
(J) a description of any affiliation or relationship
between the Servicer and any of the following parties to a Securitization
Transaction, as such parties are identified to the Servicer by the Owner or any
Depositor in writing in advance of a Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(iv) For the purpose of satisfying the reporting obligation
under the Exchange Act with respect to any class of asset-backed securities, the
Servicer shall (or shall cause each Subservicer and Third-Party Originator to)
(1) provide prompt notice to the Owner, any Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings involving the
Servicer, any Subservicer or any Third-Party Originator, (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Servicer, any Subservicer or any Third-Party Originator
and any of the parties specified in Section 9.01(e)(i)(D) (and any other parties
identified in writing by the requesting party) with respect to such
Securitization Transaction, (C) any Event of Default under the terms of this
Agreement or any Reconstitution Agreement, (D) any merger, consolidation or sale
of substantially all of the assets of the Servicer, and (E) the Servicer's entry
into an agreement with a Subservicer to perform or assist in the performance of
any of the Servicer's obligations under this Agreement or any Reconstitution
Agreement and (2) provide to the Owner and any Depositor a description of such
proceedings, affiliations or relationships.
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(v) As a condition to the succession to the Servicer or any
Subservicer as servicer or Subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Servicer or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to the
Owner and any Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written notice to the
Owner and any Depositor of such succession or appointment and (y) in writing and
in form and substance reasonably satisfactory to the Owner and such Depositor,
all information reasonably requested by the Owner or any Depositor in order to
comply with is reporting obligation under Item 6.02 of Form 8-K with respect to
any class of asset-backed securities.
(vi) (a) The Servicer shall be deemed to represent to the
Owner, to any Master Servicer and to any Depositor, as of the date on which
information is first provided to the Owner, any Master Servicer or any Depositor
under this Section 9.01(e) that, except as disclosed in writing to the Owner,
such Master Servicer or such Depositor prior to such date: (1) the Servicer is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Servicer; (2) the Servicer has not been
terminated as servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing performance test or
trigger; (3) no material noncompliance with the applicable Servicing Criteria
with respect to other securitizations of residential mortgage loans involving
the Servicer as servicer has been disclosed or reported by the Servicer; (4) no
material changes to the Servicer's policies or procedures with respect to the
servicing function it will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (5) there are no aspects of the Servicer's financial
condition that could have a material adverse effect on the performance by the
Servicer of its servicing obligations under this Agreement or any Reconstitution
Agreement; (6) there are no material legal or governmental proceedings pending
(or known to be contemplated) against the Servicer, any Subservicer or any
Third-Party Originator; and (7) there are no affiliations, relationships or
transactions relating to the Servicer, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and any party thereto
identified by the related Depositor of a type described in Item 1119 of
Regulation AB.
(b) If so requested by the Owner, any Master Servicer
or any Depositor on any date following the date on which information is first
provided to the Owner, any Master Servicer or any Depositor under this Section
9.01(e), the Servicer shall, within five (5) Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in sub clause (A) above or, if any such representation and warranty is
not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
(vii) In addition to such information as the Servicer, as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, not later than ten (10) days prior to the deadline for the filing of
any distribution report on Form 10-D in respect of any Securitization
Transaction that includes any of the Mortgage Loans serviced by the Servicer or
any Subservicer, the Servicer or such Subservicer, as applicable, shall, to the
extent the Servicer
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or such Subservicer has knowledge, provide to the party responsible for filing
such report (including, if applicable, the Master Servicer) notice of the
occurrence of any of the following events along with all information, data, and
materials related thereto as may be required to be included in the related
distribution report on Form 10-D (as specified in the provisions of Regulation
AB referenced below):
(A) any material modifications, extensions or waivers
of pool asset terms, fees, penalties or payments during the distribution period
or that have cumulatively become material over time (Item 1121(a)(11) of
Regulation AB);
(B) material breaches of pool asset representations or
warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities
issuances backed by the same pool assets, any pool asset changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or selection of pool
assets (Item 1121(a)(14) of Regulation AB).
(viii) The Servicer shall provide to the Owner, any Master
Servicer and any Depositor, evidence of the authorization of the person signing
any certification or statement, copies or other evidence of Fidelity Bond
Insurance and Errors and Omission Insurance policy, financial information and
reports, and such other information related to the Servicer or any Subservicer
or the Servicer or such Subservicer's performance hereunder.
f. The Servicer shall indemnify the Owner, each affiliate of the
Owner, and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person (including, but not
limited to, any Master Servicer, if applicable) responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees, agents and affiliates of each of the foregoing
and of the Depositor (each, an "Indemnified Party"), and shall hold each of them
harmless from and against any claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:
(i) (a) any untrue statement of a material fact contained or
alleged to be contained in any information, report, data, certification,
accountants' letter or other material provided under Sections 4.26, 6.04, 6.06,
9.01(d) and (e) by or on behalf of the Servicer, or provided under Sections
4.26, 6.04, 6.06, 9.01(d) and (e) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in the Servicer
Information a material fact required to be stated in the Servicer Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be construed solely by
reference to the
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Servicer Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the Servicer
Information or any portion thereof is presented together with or separately from
such other information;
(ii) any breach by the Servicer of its obligations under
this Section 9.01(e), including particularly any failure by the Servicer, any
Subservicer, any Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other material when
and as required under Sections 4.26, 6.04, 6.06, 9.01(d) and (e), including any
failure by the Servicer to identify any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB;
(iii) any breach by the Servicer of a representation or
warranty set forth in Section 9.01(e)(vi)(A) or in a writing furnished pursuant
to Section 9.01(e)(vi)(B) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not cured
by such closing date, or any breach by the Servicer of a representation or
warranty in a writing furnished pursuant to Section 9.01(e)(vi)(B) to the extent
made as of a date subsequent to such closing date; or
(iv) the negligence, bad faith or willful misconduct of the
Servicer in connection with its performance under Sections 4.26, 6.04, 6.06 or
9.01(e).
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Servicer agrees
that it shall contribute to the amount paid or payable by such Indemnified Party
as a result of any claims, losses, damages or liabilities incurred by such
Indemnified Party in such proportion as is appropriate to reflect the relative
fault of such Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(f), the Servicer shall promptly reimburse the Owner, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Servicer,
any Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
g. The Owner and each Person who controls the Owner (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act)
shall indemnify the Servicer, each affiliate of the Servicer, each Person who
controls any of such parties or the Servicer (within the meaning of Section 15
of the Securities Act and Section 20 of the Exchange Act) and the respective
present and former directors, officers, employees and agents of each of the
foregoing and of the Servicer, and shall hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
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(i) any untrue statement of a material fact contained or
alleged to be contained in any offering materials related to a Securitization
Transaction, including without limitation the registration statement,
prospectus, prospectus supplement, any private placement memorandum, any free
writing prospectus, any AB informational and computational materials, any
offering circular, any computational materials, and any amendments or
supplements to the foregoing (collectively, the "Securitization Materials"); or
(ii) the omission or alleged omission to state in the
Securitization Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or omission
arising out of, resulting from, or based upon the Servicer Information.
This indemnification shall survive the termination of this Agreement
or the termination of any party to this Agreement.
h. the Servicer shall cooperate with the Owner in servicing the
Mortgage Loans in accordance with the usual and customary requirements of any
credit enhancement, risk management and other service providers and shall
otherwise cooperate with the Owner in connection with such third party service
providers and the provision of third party services relating to a Securitization
Transaction; provided, however, that such requirements are reasonably acceptable
to the Servicer and pose no greater risk, obligation or expense to the Servicer
than otherwise set forth in this Agreement. Any additional costs and/or expenses
will be paid by the requesting party.
The Owner and the Servicer acknowledge and agree that the purpose of
Section 9.01(e) is to facilitate compliance by the Owner and any Depositor with
the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Servicer acknowledges that investors in privately offered securities may require
that the Owner or any Depositor provide comparable disclosure in unregistered
offerings. References in this Agreement to compliance with Regulation AB also
apply to comparable disclosure in private offerings.
Neither the Owner nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Servicer acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Owner, any
Master Servicer or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Servicer shall cooperate
fully with the Owner and any Master
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Servicer to deliver to the Owner (including any of its assignees or designees),
any Master Servicer and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Owner, the Master Servicer or any Depositor to permit the
Owner, such Master Servicer or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Servicer, any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the servicing
of the Mortgage Loans, reasonably believed by the Purchaser or any Depositor to
be necessary in order to effect such compliance.
The Owner (including any of its assignees or designees) shall
cooperate with the Servicer by providing timely notice of requests for
information under this Article IX and by reasonably limiting such requests to
information necessary, in the Owner's reasonable judgment, to comply with
Regulation AB.
In the event the Owner has elected to have the Servicer hold record
title to the Mortgages, prior to the Reconstitution Date the Servicer shall
prepare an Assignment of Mortgage in blank for each Mortgage Loan that is a part
of a Whole Loan Transfer or Agency Sale or prepare an Assignment of Mortgage in
blank or to the trustee from the Servicer acceptable to the trustee for each
Mortgage Loan that is part of a Securitization Transaction. The Owner shall pay
all preparation and recording costs associated therewith if the Assignments of
Mortgage have been previously prepared and recorded in Owner's name. The
Servicer shall execute each Assignment of Mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
trustee upon the Servicer's receipt thereof. Additionally, the Servicer shall
prepare and execute, at the direction of the Owner, any note endorsements in
connection with any and all seller/servicer agreements. If required at any time
by a Rating Agency, the Owner or successor purchaser in connection with any
Whole Loan Transfer, Agency Sale or Securitization Transaction, the Servicer
shall deliver such additional document from its Retained Mortgage File within
ten (10) days to the Custodian, successor purchaser or other designee of the
Purchaser as said Rating Agency, Purchaser or successor purchaser may require.
All Mortgage Loans (i) not sold or transferred pursuant to Whole Loan
Transfers, Agency Sales or Securitization Transactions or (ii) that are subject
to a Securitization for which the related trust is terminated for any reason,
shall remain subject to this Agreement and shall continue to be serviced in
accordance with the terms of this Agreement and with respect thereto this
Agreement shall remain in full force and effect.
16. Section 12.01 (Successor to Servicer) is hereby amended by:
(i) replacing the words "Prior to" with the word "Upon" in the
first line of the first paragraph thereto;
(ii) adding the phrase ", in accordance with the Pooling and
Servicing Agreement," after the word "shall" in the second line of the first
paragraph thereto; and
(iii) adding the following sentence immediately after the first
sentence of the first paragraph:
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Any successor to the Servicer shall be subject to the approval of the
Master Servicer and each Rating Agency, as evidenced by a letter from
such Rating Agency delivered to the Trustee that the transfer of
servicing will not result in a qualification, withdrawal or downgrade
of the then-current rating of any of the Certificates.
(iv) adding the following paragraph after the third paragraph
thereof:
Except as otherwise provided in this Agreement, all reasonable costs
and expenses incurred in connection with any transfer of servicing due
to an Event of Default under Section 10.01, including, without
limitation, the costs and expenses of the Master Servicer or any other
Person in appointing a successor servicer, or of the Master Servicer
in assuming the responsibilities of the Servicer hereunder, or of
transferring the Mortgage Files and the other necessary data,
including the completion, correction or manipulation of such servicing
data as may be required to correct any errors or insufficiencies in
the servicing data, to the successor servicer shall be paid by the
terminated or resigning Servicer from its own funds without
reimbursement.
17. Section 12.13 (Third-Party Beneficiary) is deleted and replaced as
follows:
Section 12.13. Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to
this Agreement agree that it is appropriate, in furtherance of the
intent of such parties as set forth herein, that the Master Servicer,
on behalf of the Trust, receive the benefit of the provisions of this
Agreement as intended third party beneficiary of this Agreement to the
extent of such provisions. The Servicer shall have the same
obligations to the Master Servicer as if it were a party to this
Agreement, and the Master Servicer, on behalf of the Trust, shall have
the same rights and remedies to enforce the provisions of this
Agreement as if it were a party to this Agreement. The Servicer shall
only take direction from the Master Servicer (if direction by the
Master Servicer is required under this Agreement) unless otherwise
directed by this Agreement. Notwithstanding the foregoing, all rights
and obligations of the Master Servicer and the Trustee hereunder
(other than the right to indemnification and the indemnification
obligations) shall terminate upon termination of the Trust pursuant to
the Pooling and Servicing Agreement.
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EXHIBIT B
Flow Servicing Agreement
EXHIBIT C
Assignment, Assumption and Recognition Agreement
SCHEDULE I
Mortgage Loan Schedule
(delivered to the Trustee in electronic format)
Execution Copy
3/14/2006
CITIGROUP GLOBAL MARKETS REALTY CORP.
OWNER
AND
XXXXX FARGO BANK, N.A.
SERVICER
----------
AMENDED AND RESTATED FLOW SERVICING AGREEMENT
DATED AS OF MARCH 1, 2006
----------
FIXED AND ADJUSTABLE RATE
FIRST AND SECOND LIEN MORTGAGE LOANS
TABLE OF CONTENTS
ARTICLE I.................................................................. 1
DEFINITIONS................................................................ 1
ARTICLE II................................................................. 13
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND
RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS........................ 14
ARTICLE III................................................................ 16
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH......................... 16
ARTICLE IV................................................................. 19
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............................. 19
ARTICLE V.................................................................. 37
PAYMENTS TO OWNER.......................................................... 37
ARTICLE VI................................................................. 38
GENERAL SERVICING PROCEDURES............................................... 38
ARTICLE VII................................................................ 43
SERVICER TO COOPERATE...................................................... 43
ARTICLE VIII............................................................... 44
THE SERVICER............................................................... 44
ARTICLE IX................................................................. 47
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT................................... 47
ARTICLE X.................................................................. 57
DEFAULT.................................................................... 57
ARTICLE XI................................................................. 59
TERMINATION................................................................ 59
ARTICLE XII................................................................ 60
MISCELLANEOUS PROVISIONS................................................... 60
EXHIBITS
Exhibit A Form of Acknowledgement Agreement
Exhibit B Contents of each Custodial Mortgage File, Retained Mortgage File and
Servicing File
Exhibit C Servicing Criteria
Exhibit D Form of Sarbanes Certification
Exhibit E [Reserved]
Exhibit F Form of Assignment, Assumption and Recognition Agreement
Exhibit G Form of Opinion of Counsel
This is an Amended and Restated Flow Servicing Agreement for fixed rate and
adjustable rate residential first and second lien mortgage loans, dated and
effective as of March 1, 2006, and is executed between Citigroup Global Markets
Realty Corp., as owner (the "Owner"), and Xxxxx Fargo Bank, N.A., as servicer
(the "Servicer").
WITNESSETH
WHEREAS, the Owner owns certain fixed rate and adjustable rate mortgage
loans (the "Mortgage Loans");
WHEREAS, the Owner desires to have the Servicer service and administer the
Mortgage Loans and the Servicer desires to service and administer the Mortgage
Loans in accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan serviced in
accordance with all applicable federal, state and local laws and regulations,
the terms of the Mortgage Loan Documents, and those mortgage servicing practices
of prudent mortgage lending institutions which service mortgage loans of the
same type as the Mortgage Loans in the jurisdiction where the related Mortgaged
Property is located.
Acknowledgment Agreement: An acknowledgment agreement substantially in the
form of Exhibit A hereto, that makes specific reference to this Agreement, and
which is to be executed on or prior to each Servicing Date with respect to
servicing of Mortgage Loans by the Servicer.
Adjustment Date: As to each adjustable rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.
Agency: Xxxxxx Xxx, Xxxxxxx Mac or GNMA, or any of them as applicable.
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Agency Sale: Any sale or transfer of some or all of the Mortgage Loans by
the Owner to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Servicing Agreement and all exhibits hereto, amendments
hereof and supplements hereto.
Appraised Value: The value set forth on the related Mortgage Loan Schedule
and determined in accordance with the terms of the agreement pursuant to which
the related Mortgage Loan was purchased.
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 Owner, or if the related Mortgage has been recorded
in the name of MERS or its designee, such actions as are necessary to cause the
Owner to be shown as the owner of the related Mortgage on the records of MERS
for purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, as assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, as
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Balloon Loan: A Mortgage Loan for which the Monthly Payments will not fully
amortize the loan by the end of the term, at which time the balance of the
principal is due in a lump sum.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the parties
are located, are authorized or obligated by law or executive order to be closed.
Buydown Agreement: An agreement between the originator of a Mortgage Loan
and a Mortgagor, or an agreement among the originator, a Mortgagor and a seller
of a Mortgaged Property or a third party with respect to a Mortgage Loan which
provides for the application of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, or any other source, plus interest earned
thereon, in order to enable the Mortgagor to reduce the payments required to be
made from the Mortgagor's funds in the early years of a Mortgage Loan.
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Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant to a
Buydown Agreement, (i) the Mortgagor pays less than the full monthly payments
specified in the Mortgage Note for a specified period, and (ii) the difference
between the payments required under such Buydown Agreement and the Mortgage Note
is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in effect
with respect to a related Buydown Mortgage Loan.
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.
Combined Loan-to-Value Ratio or CLTV: As to any Second Lien Mortgage Loan
at any date of determination, the ratio on such date of the principal balance of
such Mortgage Loan, plus the principal balance of any Superior Lien, to the
Appraised Value of the related Mortgaged Property.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: The letter agreement to be executed between (i) the
Seller and the Owner relating to the Owned Mortgage Loans or (ii) the Servicer
and the Owner relating to the Purchased Mortgage Loans.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the Project comprises, including the
land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Servicer
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares and
a Proprietary Lease granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the Mortgagor, and allocated to a Cooperative Apartment.
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Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Assignment of Mortgage and other applicable Mortgage Loan
Documents.
Custodial Mortgage File: With respect to each Owned Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 1 through 5 of Exhibit
B attached hereto, which have been delivered to the Custodian as of the related
Servicing Date.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: With respect to each transaction contemplated hereby, the
date so specified in the related Acknowledgment Agreement.
Data File: The electronic data file prepared by the Seller and delivered to
the Owner pursuant to the related Master Mortgage Loan Purchase Agreement.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Servicer pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
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Exchange Act: The Securities and Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association or Xxxxxx Mae, or any
successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to
Section 4.12.
First Lien: With respect to each Mortgaged Property, the lien on the
mortgage, deed of trust or other instrument securing a mortgage note which
creates a first lien on the Mortgaged Property.
First Lien Mortgage Loan: A Mortgage Loan secured by a First Lien on the
Mortgage Property.
First Remittance Date: With respect to each Mortgage Loan, the 18th day (or
if such day is not a Business Day, the immediately preceding Business Day) of
the month following the month in which the related Cut-off Date occurs, or such
other day of the month as may be specified in the related Acknowledgement
Agreement.
Flow Servicing Rights Purchase and Sale Agreement: That certain agreement
between the Owner, as seller and the Servicer, as purchaser, pursuant to which
the Servicer purchases the servicing rights related to the Purchased Mortgage
Loans.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation or Xxxxxxx Mac, or
any successor thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period as set forth in the
related Mortgage Note.
Letter of Credit: With respect to a Pledged Asset Mortgage Loan, a guaranty
issued to the Servicer by the Pledge Holder for the Pledged Value Amount.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage Loan,
the ratio of the original loan amount of the Mortgage Loan at its origination
(unless otherwise indicated) to the Appraised Value of the Mortgaged Property.
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LPMI Policy: With respect to the Serviced-owned Mortgage Loans, a PMI
Policy for which the Seller pays all premiums from its own funds, without
reimbursement.
Master Mortgage Loan Purchase Agreement: The agreement, dated as of March
1, 2006, between the Seller and the Owner pursuant to which the Owner purchased
the Owned Mortgage Loans.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage or
Assignment of Mortgage has been registered with MERS on the MERS System
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: The eighteen digit Mortgage Identification Number.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Servicer pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan, or in the case of an Interest Only Mortgage Loan, payments of
(i) interest, or (ii) principal and interest, if applicable, on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note, or the Pledge
Agreement securing the Mortgage Note for a Cooperative Loan.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: Certain fixed rate and adjustable rate mortgage loans, which
mortgage loans are serviced by the Servicer pursuant to this Agreement.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
listed on Exhibit B attached hereto.
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Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: With respect to each transaction contemplated
hereby, a schedule of Mortgage Loans subject to this Agreement and annexed to
the related Acknowledgement Agreement.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the
Cooperative Apartment.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Servicer, and
delivered to the Owner as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Servicer, reasonably acceptable to the Owner.
Owned Mortgage Loan: An individual Mortgage Loan originally sold by the
Seller to the Owner, as to which the servicing rights are owned by the Servicer.
Owner: Citigroup Global Markets Realty Corp., or its successor in interest
or any successor to or designee or assignee of the Owner under this Agreement as
herein provided.
Periodic Interest Rate Cap: As to each adjustable rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Account: With respect to a Pledged Asset Mortgage Loan, an account
that is managed by the Pledge Holder to secure a Letter of Credit.
Pledge Account Maintenance Value: With respect to a Pledged Asset Mortgage
Loan, a minimum percentage of the pledged amount specified in the underwriting
guidelines of the Servicer. If the balance on the Pledge Account falls below the
maintenance value of the pledge amount, the Pledge Holder will require that more
funds be added to the Pledge Account, or decide to make a margin call.
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Pledge Account Set-Up Value: With respect to a Pledged Asset Mortgage Loan,
a minimum percentage of the pledged amount specified in the underwriting
guidelines of the Servicer placed in the Pledge Account to allow for market
fluctuations. The Pledge Holder determines the Pledge Account Set-Up Value.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledged Asset Mortgage Loan: A Mortgage Loan for which the Mortgagor has
pledged financial assets as partial collateral for the Mortgage Loan, in lieu of
a cash down payment.
Pledge Holder: With respect to a Pledged Asset Mortgage Loan, the entity
that holds the Pledge Account, manages the Pledge Account and provides the
Letter of Credit.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
Pledged Value Amount: With respect to a Pledged Asset Mortgage Loan, a
minimum of 20% of the lower of the purchase price or appraised value of a
Mortgaged Property.
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by an
electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy may be paid (i) by the Mortgagor or (ii) by the Servicer from
its own funds, without reimbursement, in the case of an LPMI Policy.
Prepayment Charge: With respect to any calendar month, any prepayment
premium, penalty or charge payable by a Mortgagor in connection with a Principal
Prepayment in full on a Mortgage Loan pursuant to the terms of the related
Mortgage Note (other than any Prepayment Charge Payment Amount).
Prepayment Charge Payment Amount: An amount in respect of a Prepayment
Charge or portion thereof waived other than as permitted in Section 4.27, paid
by the Servicer as required by Section 4.27.
Prepayment Interest Shortfall: As to any Remittance Date and each Mortgage
Loan subject to a Principal Prepayment received during the calendar month
preceding such Remittance Date, the amount, if any, by which one month's
interest at the related Mortgage Loan Remittance Rate on such Principal
Prepayment exceeds the amount of interest paid in connection with such Principal
Prepayment.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
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Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: With respect to the Owned Mortgage Loans, the
month preceding the month in which the related Remittance Date occurs. With
respect to the Purchased Mortgage Loans, either (A)(i) with respect to any
Principal Prepayment in full, the period that commences on and includes the 14th
day of the month immediately preceding the month in which such Remittance Date
occurs and ends on and includes the 13th day of the month in which such
Remittance Date occurs, and (ii) with respect to any partial Principal
Prepayment, the calendar month preceding the month in which the Remittance Date
occurs, or (B) the calendar month preceding the month in which the Remittance
Date occurs, as set forth in the related Commitment Letter .
Project: With respect to a Cooperative Loan, all real property owned by the
related Cooperative including the land, separate dwelling units and all common
areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchased Mortgage Loans: An individual Mortgage Loan, the servicing rights
to which have been purchased by the Servicer from the Owner pursuant to the Flow
Servicing Rights Purchase and Sale Agreement.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions were satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite and originate
mortgage loans from time to time, for sale to the Seller, in accordance with
underwriting guidelines designated by the Seller ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Seller within 180 days of origination; (iii) either (x)
the Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Seller in origination of mortgage loans of the same type as the
Mortgage Loans for the Seller's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Seller on a consistent basis for use by lenders in originating mortgage loans to
be purchased by the Seller; and (iv) the Seller employed, at the time such
Mortgage Loans were acquired by the Seller, pre-purchased or post-purchased
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchases
mortgage loans properly applied the underwriting criteria designated by the
Seller.
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable
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limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
Standard & Poor's Ratings Services or Prime-1 by Xxxxx'x Investors Service, Inc.
(or a comparable rating if another Rating Agency is specified by the Owner by
written notice to the Servicer) at the time any deposits are held on deposit
therein.
Qualified Insurer: A mortgage guaranty insurance Servicer duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Rating Agency or Agencies: Any nationally recognized statistical Rating
Agency, or its successors, including Standard & Poor's, a division of The
XxXxxx-Xxxx Companies, Xxxxx'x Investors Service, Inc. and Fitch Ratings.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Servicer and the Owner and/or certain third parties on the Reconstitution Date
or Dates with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Whole Loan Transfer or a Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of a Securitization Transaction, Agency Sale or Whole Loan
Transfer pursuant to Section 9.01 hereof. The Reconstitution Date shall be such
date which the Owner shall designate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the staff of
the Commission, or as may be provided by the Commission or its staff from time
to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
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Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately preceding) of any month, beginning with the
First Remittance Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Owner through foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase Price: With respect to the Mortgage Loans, the price as stated
in the Commitment Letter.
Retained Mortgage File: With respect to each Owned Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 6 through 11 of
Exhibit B attached hereto.
Sarbanes Certifying Party: A Person who files a Xxxxxxxx-Xxxxx
certification directly with the Securities and Exchange Commission pursuant to
the Xxxxxxxx-Xxxxx Act of 2002.
Second Lien: With respect to a Mortgaged Property, a lien of the mortgage,
deed of trust or other instrument securing a mortgage note which creates a
second lien on the Mortgaged Property.
Second Lien Mortgage Loan: A Mortgage Loan secured by the lien on the
Mortgaged Property, subject to one prior lien on such Mortgaged Property
securing financing obtained by the related Mortgagor.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (a) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (b) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Seller: Xxxxx Fargo Bank, N.A.
Seller/Servicer Information: As defined in Section 9.01(f)(i)(A).
Servicer: Xxxxx Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Servicer under this Agreement appointed as herein
provided.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable attorney's
fees and disbursements)
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incurred in the performance by the Servicer of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of any
REO Property and (d) compliance with the obligations under Section 4.08
(excluding the Servicer's obligation to pay the premiums on LPMI Policies on
Serviced-owned Mortgage Loans).
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Date: (i) With respect to each Owned Mortgage Loan, the Closing
Date, as defined in the Master Mortgage Loan Purchase Agreement and (ii) with
respect to each Purchased Mortgage Loan, the Reconstitution Date as defined in
the Agreement, dated as of September 15, 2005, between the Servicer and the
Owner.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Owner shall pay to the Servicer, which shall, for a period of one full
month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate and
(b) the outstanding principal balance of such Mortgage Loan. Such fee shall be
payable monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is received.
The obligation of the Owner to pay the Servicing Fee is limited to, and the
Servicing Fee is payable solely from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds, to the extent permitted by
Section 4.05) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: The percent per annum with respect to each Mortgage
Loan identified on the related Mortgage Loan Schedule attached to the related
Acknowledgment Agreement.
Servicing File: With respect to each Mortgage Loan, the file consisting of
the Mortgage Loan Documents listed as items 12 through 27 of Exhibit B attached
hereto plus copies of all Mortgage Loan Documents, contained in the Custodial
Mortgage File and the Retained Mortgage File, which are retained by the Company.
Servicing Officer: Any officer of the Servicer involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Servicer to the Owner upon
request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date, whether or not received, minus (ii) all
amounts previously distributed to the Owner with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
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Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the Stock
Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Servicer of a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Subsidy Account: An account maintained by the Servicer specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Seller program that allows a rate/term refinance of an existing
Owned Mortgage Loan with minimal documentation.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Owner to a third party, which sale or transfer is not a
Securitization Transaction or Agency Sale.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Possession of Mortgage Files; Maintenance of Servicing Files.
Pursuant to Section 2.03 below, the Servicer has delivered the Custodial
Mortgage File to the Custodian. From and after each Servicing Date, the contents
of each Retained Mortgage File shall be held in trust by the Servicer for the
benefit of the Owner as the owner thereof. The Servicer shall maintain a
Servicing File consisting of a copy of the contents of each of the Custodial
Mortgage File and the Retained Mortgage File. The possession of each Servicing
File and Retained Mortgage File held by the Servicer is at the will of the Owner
for the sole purpose of servicing the related Mortgage Loan, and such retention
and possession by the Servicer is in a custodial capacity only. The ownership of
each Mortgage Note, the related Mortgage and the related Custodial Mortgage
File, Retained Mortgage File and Servicing File are vested in the Owner, and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Servicer shall vest
immediately in the Owner and shall be retained and maintained by the Servicer,
in trust, at the will of the Owner and only in such custodial capacity. The
Servicer shall release its custody of the contents of any Servicing File and
Retained Mortgage File only in accordance with written instructions from the
Owner, unless such release is required as incidental to the Servicer's servicing
of the Mortgage Loans, in the case of the Servicing File, or is in connection
with a repurchase of any Mortgage Loan. All such costs associated with the
release, transfer and re-delivery of any Custodial Mortgage Files, Retained
Mortgage Files and Servicing Files between the parties shall be the
responsibility of the party in possession of such file or files.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Servicer agrees that it will cause the MERS System to indicate that such
Mortgage Loan has been assigned by the Seller, with respect to an Owner Mortgage
Loan, or assigned by the prior owner, with respect to any Purchased Mortgage
Loan, the Owner in accordance with this Agreement by including (or deleting, in
the case of a repurchased Mortgage Loan) in such computer files the information
required by the MERS System to identify the Owner as the beneficial owner of
such Mortgage Loan.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
All rights arising out of the Mortgage Loans, including, but not limited
to, all funds received on or in connection with the Mortgage Loans, shall be
received and held by the Servicer in trust for the benefit of the Owner as owner
of the Mortgage Loans, and the Servicer shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The Servicer shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any purchaser or its designee the related
Retained Mortgage File and Servicing File during the time the Owner retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.
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The Servicer shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Servicer shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Servicer shall be under no obligation to deal with any
Person with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Owner may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. 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. Such notification of a transfer shall
include a final loan schedule which shall be received by the Servicer no fewer
than five (5) Business Days before the last Business Day of the month. If such
notification is not received as specified above, the Servicer's duties to remit
and report as required by Section 5 shall begin with the next Due Period.
With respect to the Owned Mortgage Loans, upon request from the Owner, at
the Owner's expense, the Servicer shall deliver no later than fifteen (15)
Business Days after such request any Retained Mortgage File or document therein,
or copies thereof, to the Owner at the direction of the Owner. The Owner shall
return any Retained Mortgage File or document therein delivered pursuant to this
Section no later than ten (10) Business Days after receipt thereof. An extension
of this date may be requested from the Owner, which consent shall not be
unreasonably withheld. In the event that the Servicer fails to make delivery of
the requested Retained Mortgage File or document therein, or copies thereof, as
required under this Section 2.02, the Servicer shall repurchase, in accordance
with the related Commitment Letter, the related Mortgage Loan within thirty (30)
Business Days after receipt of a request to do so by the Owner.
Section 2.03 Custodial Agreement; Delivery of Documents.
The Servicer shall forward to the Custodian original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Servicer 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 sixty days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, which the Servicer is required to deliver at any time to the
Custodian in accordance with the terms of this Agreement or which the Servicer
is required to maintain in the Retained Mortgage File, the Servicer shall
deliver to the Custodian within 240 days of its submission for recordation, a
copy of such document and an Officer's Certificate, which shall (i) identify the
recorded document; (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay by the public recording office, (iii)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for
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recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Servicer will be required to deliver the
document to the Custodian by the date specified in (iv) above. An extension of
the date specified in (iv) above may be requested from the Owner, which consent
shall not be unreasonably withheld.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the
Servicer immediately shall deliver to the Custodian the new Stock Certificates,
together with the related Stock Powers in blank. Such new Stock Certificates
shall be subject to the related Pledge Instruments and shall be subject to all
of the terms, covenants and conditions of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Servicer Representations and Warranties.
The Servicer hereby represents and warrants to the Owner that, as of each
Servicing Date:
(a) Due Organization and Authority.
The Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and
has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Servicer, and in any event the Servicer is in
compliance with the laws of any such state to the extent necessary to
ensure the enforceability of the related Mortgage Loan and the
servicing of such Mortgage Loan in accordance with the terms of this
Agreement; the Servicer has the full power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by
the Servicer and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences
the valid, binding and enforceable obligation of the Servicer; and all
requisite action has been taken by the Servicer to make this Agreement
valid and binding upon the Servicer in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Servicer, who is in the
business of selling and
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servicing loans, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Servicer pursuant to this
Agreement are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the transactions
contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement will conflict with or result in
a breach of any of the terms, articles of incorporation or by-laws or
any legal restriction or any agreement or instrument to which the
Servicer is now a party or by which it is bound, or constitute a
default or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is
subject;
(d) Ability to Service.
The Servicer is an approved seller/servicer of conventional
residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the
sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Servicer is a HUD approved mortgagee and is in good
standing to sell mortgage loans to and service mortgage loans for
Xxxxxx Mae or Xxxxxxx Mac, and no event has occurred, including but
not limited to a change in insurance coverage, which would make the
Servicer unable to comply with Xxxxxx Mae or Xxxxxxx Mac eligibility
requirements or which would require notification to either Xxxxxx Mae
or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
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;
(f) Ability to Perform.
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. The Servicer is solvent;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Servicer which, either in any one instance or
in the aggregate, may result in any material adverse change in the
business, operations, financial condition,
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properties or assets of the Servicer, or in any material impairment of
the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the
part of the Servicer, or which would draw into question the validity
of this Agreement or of any action taken or to be contemplated herein,
or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Servicer of or compliance by the Servicer with
this Agreement as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the Servicing Date;
(i) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(j) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Servicer since the date of the
Servicer's most recent financial statements; and
(k) MERS.
The Servicer is a member of MERS in good standing.
Section 3.02 Repurchase of Purchased Mortgage Loans.
With respect to Purchased Mortgage Loans, the Servicer shall cooperate with
the Owner in facilitating the repurchase of any Purchased Mortgage Loan or Loans
by a seller. Upon receipt by the Servicer of notice from the Owner of a breach
by a seller or a representation or warranty contained in any agreement between
the Owner and seller, or a request by the Owner for a seller to repurchase any
Purchased Mortgage Loan or Loans, the Servicer shall, at the direction of the
Owner, use its best efforts to cure and correct any breach related to such
deficiencies of the related Purchased Mortgage Loan or Loans.
At the time of repurchase of the Purchased Mortgage Loan or Loans, the
Owner or the Custodian, as applicable, and the Servicer shall arrange for the
reassignment of the repurchased Purchased Mortgage Loan or Loans to the seller
according to the Owner's instructions and, with respect to any Purchased
Mortgage Loan that is a MERS Mortgage Loan, in accordance with
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Section 2.01, and the delivery of any documents held by the Servicer with
respect to the repurchased Purchased Mortgage Loan or Loans. The Servicer will
facilitate the remittance of repurchase funds between the seller and the Owner,
but shall not be required to advance funds for such repurchase and shall be
reimbursed for any expenses incurred due to such repurchase.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
The Servicer, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a Subservicer or a Subcontractor, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Servicer shall be responsible for any and
all acts of a Subservicer or a Subcontractor, and the Servicer's utilization of
a Subservicer or a Subcontractor shall in no way relieve the liability of the
Servicer under this Agreement.
Consistent with the terms of this Agreement, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the Owner,
provided, however, the Servicer shall not make any future advances with respect
to a Mortgage Loan. Unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Servicer, imminent, the
Servicer shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Interest Rate, defer or forgive the payment of
principal (except for actual payments of principal) or change the final maturity
date on such Mortgage Loan. The Servicer shall request written consent from the
Owner to permit such a modification and the Owner shall provide written consent
or notify the Servicer of its objection to such modification within three (3)
Business Days of its receipt of the Servicer's request. 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 5.03, the difference between (a) such month's principal
and one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Servicer shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 5.03. Without
limiting the generality of the foregoing, the 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
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powers of attorney and other documents necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under this
Agreement.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Owner's reliance on the Servicer.
The Servicer shall cause to be maintained for each Cooperative Loan a copy
of the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the Owner.
The Servicer is authorized and empowered by the Owner, pursuant to the
instructions of the Owner, in its own name, when the Servicer believes it
appropriate in its reasonable judgment to register any Mortgage Loan on the
MERS(R) System, or cause the removal from the registration of any Mortgage Loan
on the MERS(R) System, to execute and deliver, on behalf of the Owner, any and
all instruments of assignment and other comparable instruments with respect to
such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Owner and its successors and assigns.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Servicer shall take such action as (1) the Servicer would take under
similar circumstances with respect to a similar mortgage loan held for its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, (3) the Servicer shall determine prudently to be in the best interest
of Owner, and (4) is consistent with any related PMI Policy. In the event that
any payment due under any Mortgage Loan is not postponed pursuant to Section
4.01 and remains delinquent for a period of ninety (90) days or any other
default continues for a period of ninety (90) days beyond the expiration of any
grace or cure period, the 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 three (3) Business Days after 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 5.03, 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,
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restoration and/or foreclosure will increase the proceeds of liquidation of the
Mortgage Loan to Owner after reimbursement to itself for such expenses and (b)
that such expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 4.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Servicer has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Owner
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the Owner in
the event of liquidation, and will be advanced by the Servicer. Upon completion
of the inspection or review, the Servicer shall promptly provide the Owner with
a written report of the environmental inspection.
After reviewing the environmental inspection report, the Owner shall
determine how the Servicer shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Owner directs the Servicer to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure, the Servicer shall be reimbursed for all
reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to
be reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Owner directs the Servicer not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Servicer shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall take special care in ascertaining and
estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received in
connection with a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A.,
in trust for the Owner and/or subsequent purchasers of
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Mortgage Loans, - P & I." The Custodial Account shall be established with a
Qualified Depository. The existence of the Custodial Account shall be evidenced
by an account certification and shall be provided on the respective Servicing
Date. The Custodial Account shall at all times be insured to the fullest extent
allowed by applicable law. Funds deposited in the Custodial Account may be drawn
on by the Servicer in accordance with Section 4.05.
The Servicer shall deposit in the Custodial Account within one (1) Business
Day of Servicer's receipt, and retain therein, the following collections
received by the Servicer and payments made by the Servicer after the Cut-off
Date, other than payments of principal and interest due on or before the Cut-off
Date, or received by the Servicer prior to the Cut-off Date but allocable to a
period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.02 hereof and Section 6 of the
Master Mortgage Loan Purchase Agreement;
(viii) with respect to each Principal Prepayment, the Prepayment Interest
Shortfall (to be paid by the Servicer out of its funds); provided,
however, that in no event shall the aggregate of deposits made by
the Servicer pursuant to this sub clause (viii) exceed the aggregate
amount of the Servicer's Servicing Fee for the related Due Period;
(ix) any amounts required to be deposited by the Servicer pursuant to
Section 4.11 in connection with the deductible clause in any blanket
hazard insurance policy;
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(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16; and
(xi) an amount from the Subsidy Account that when added to the
Mortgagor's payment will equal the full monthly amount due under the
related Mortgage Note.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Servicer into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Servicer and the Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Servicer's funds
made pursuant to Section 5.03, 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 Monthly
Payments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer
respecting which any such advance was made, it being understood
that, in the case of any such reimbursement, the Servicer's right
thereto shall be prior to the rights of Owner; except that, when the
Seller is required to repurchase an Owned Mortgage Loan pursuant to
the Master Mortgage Loan Purchase Agreement, the Servicer's right to
such reimbursement shall be subsequent to the payment of the Owner
of the Repurchase Price and all other amounts required to be paid to
the Purchaser with respect to such Owned Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for any
unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Servicer from the Mortgagor or otherwise relating
to the Mortgage Loan, it being understood that, in the case of any
such reimbursement, the Servicer's right thereto shall be prior to
the rights of Owner; except that, when the Seller is required to
repurchase an Owned Mortgage Loan pursuant to the Master Mortgage
Loan Purchase Agreement, the Servicer's right to such reimbursement
shall be subsequent to the payment of the Owner of the
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Repurchase Price and all other amounts required to be paid to the
Purchaser with respect to such Owned Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the case
of any such expenditure or withdrawal related to a particular REO
Property, the amount of such expenditure or withdrawal from the
Custodial Account shall be limited to amounts on deposit in the
Custodial Account with respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed
above;
(viii) to remove funds inadvertently placed in the Custodial Account by the
Servicer; and
(ix) to clear and terminate the Custodial Account upon the termination of
this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Servicer shall withdraw all funds from the Custodial
Account except for those amounts which, pursuant to Section 5.01, the Servicer
is not obligated to remit on such Remittance Date. The Servicer may use such
withdrawn funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Xxxxx Fargo Bank, N.A., in trust for the Owner and/or subsequent purchasers of
residential Mortgage Loans, and various Mortgagors - T & I." The Escrow Accounts
shall be established with a Qualified Depository, in a manner which shall
provide maximum available insurance thereunder. The existence of an Escrow
Account shall be evidenced by an account certification and shall be provided on
the Servicing Date. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 4.07.
The Servicer shall deposit in the Escrow Account or Accounts within one (1)
Business Day of Servicer's receipt, and retain therein:
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(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation Proceeds
which are to be applied to the restoration or repair of any Mortgaged
Property;
(iii) all payments on account of Buydown Funds; and
(iv) all Servicing Advances for Mortgagors whose Escrow Payment are
insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Servicer shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Servicer
only:
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to reimburse the Servicer for any Servicing Advances made by the
Servicer pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce the
principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Servicer, or any Mortgagor to the extent required by
law, any interest paid on the funds deposited in the Escrow Account;
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(vii) to remove funds inadvertently placed in the Escrow Account by the
Servicer;
(viii) to remit to Owner payments on account of Buydown Funds as
applicable; and
(ix) to clear and terminate the Escrow Account on the termination of this
Agreement.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account (excluding the payment of LPMI Policy
premiums, which are to be paid from the Servicer's own funds without
reimbursement) which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Servicer assumes full responsibility for the timely payment of all
such bills and shall effect timely payment of all such charges irrespective of
each Mortgagor's faithful performance in the payment of same, irrespective of
whether the Mortgage Loan provides for Escrow Payments or the making of the
Escrow Payments, and the Servicer shall make advances from its own funds to
effect such payments and such amounts shall not be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of the
Mortgage Loan so permit. The obligation of the Servicer to make such Servicing
Advances is mandatory, notwithstanding any other provision of this Agreement,
and, with respect to any Mortgage Loan or REO Property, shall continue through
the last Monthly Payment due prior to the payment in full of the Mortgage Loan,
or through the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including REO Disposition Proceeds, Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided that, notwithstanding
anything herein to the contrary, no Servicing Advance shall be required to be
made hereunder by the Servicer if such Servicing Advance would, if made,
constitute a nonrecoverable Servicing Advance. The determination by the Servicer
that it has made a nonrecoverable Servicing Advance or that any proposed
Servicing Advance, if made, would constitute a nonrecoverable Servicing Advance,
shall be evidenced by an Officers' Certificate delivered to the Purchaser.
Section 4.09 Protection of Accounts.
The Servicer may transfer the Custodial Account, Subsidy Account or the
Escrow Account to a different Qualified Depository from time to time, provided
that the Servicer shall give notice to the Owner of such transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to Fannie
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Mae or Xxxxxxx Mac against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged Property is
located, in an amount which is at least equal to the lesser of (i) 100% of the
insurable value, on a replacement cost basis, of the improvements on the related
Mortgaged Property, or (ii) the greater of (x) the outstanding principal balance
of the Mortgage Loan or (y) an amount such that the proceeds of such insurance
shall be sufficient to prevent the application to the Mortgagor or loss payee of
any coinsurance clause under the policy. In the event a hazard insurance policy
shall be in danger of being terminated, or in the event the insurer shall cease
to be acceptable to Xxxxxx Mae or Xxxxxxx Mac, the Servicer shall notify the
Owner and the related Mortgagor, and shall use its best efforts, as permitted by
applicable law, to obtain from another qualified insurer a replacement hazard
insurance policy substantially and materially similar in all respects to the
original policy. In no event, however, shall a Mortgage Loan be without a hazard
insurance policy acceptable to Xxxxxx Mae or Xxxxxxx Mac at any time, subject
only to Section 4.11 hereof.
If the related Mortgaged Property is located in an area identified by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Servicer shall cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier acceptable to Xxxxxx Mae or Xxxxxxx Mac in an
amount representing coverage equal to the lesser of (i) the minimum amount
required, under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Servicer determines in accordance with applicable law that a
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance or is covered in an amount less than the amount required by
the flood Disaster Protection Act of 1973, as amended, the Servicer shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the require flood insurance
coverage within forty-five (45) days after such notification, the Servicer shall
immediately force place the required flood insurance on the Mortgagor's behalf.
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 Xxxxxx Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.
In the event that the Owner or the Servicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Servicer shall communicate and consult with
the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Servicer shall
immediately force place the required coverage on the Mortgagor's behalf.
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All policies required hereunder shall name the Servicer as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Xxx and Xxxxxxx Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Servicer shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Servicer under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Servicer's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10. The Servicer shall prepare and make any claims on the blanket policy as
deemed necessary by the Servicer in accordance with Accepted Servicing
Practices. Any amounts collected by the Servicer under any such policy relating
to a Mortgage Loan shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to be deposited from the Servicer's funds, without
reimbursement therefor. Upon request of the Owner, the Servicer shall cause to
be delivered to such Owner a certificate of insurance and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to such Owner.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall maintain with responsible companies that are acceptable
to Xxxxxx Mae and Xxxxxxx Mac, at its own expense, a blanket Fidelity Bond and
an Errors and Omissions
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Insurance Policy, with broad coverage on all officers, employees or other
Persons acting in any capacity requiring such Persons to handle funds, money,
documents or papers relating to the Mortgage Loans ("Servicer Employees"). Any
such Fidelity Bond and Errors and Omissions Insurance Policy shall be in the
form of the Mortgage Banker's Blanket Bond and shall protect and insure the
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Servicer Employees. Such Fidelity Bond
and Errors and Omissions Insurance Policy also shall protect and insure the
Servicer against losses in connection with the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring such Fidelity Bond
and Errors and Omissions Insurance Policy shall diminish or relieve the Servicer
from its duties and obligations as set forth in this Agreement. The minimum
coverage under any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be at least equal to the amounts acceptable to Xxxxxx Mae or Xxxxxxx Mac.
Upon the request of any Owner, the Servicer shall cause to be delivered to such
Owner a certificate of insurance for such Fidelity Bond and Errors and Omissions
Insurance Policy and a statement from the surety and the insurer that such
Fidelity Bond and Errors and Omissions Insurance Policy shall in no event be
terminated or materially modified without thirty (30) days' prior written notice
to the Owner.
Section 4.13 Inspections.
If any Mortgage Loan is more than forty-five (45) days delinquent, the
Servicer shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Servicer shall keep a
record of each such inspection and, upon request, shall provide the Owner with
such information.
Section 4.14 Restoration of Mortgaged Property.
The Servicer need not obtain the approval of the Owner prior to releasing
any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $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:
(i) the Servicer shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Servicer shall take all steps necessary to preserve the priority
of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Servicer shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
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If the Owner is named as an additional loss payee, the Servicer is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Owner.
Section 4.15 Maintenance of PMI Policy; Claims.
Except for the Pledged Asset Mortgage Loans, for each Mortgage Loan with an
LTV in excess of 80% at the time of origination, the Servicer shall, without any
cost to the Owner maintain or cause the Mortgagor to maintain in full force and
effect a PMI Policy insuring a portion of the unpaid principal balance of the
Mortgage Loan as to payment defaults. If the Mortgage Loan is insured by a PMI
Policy for which the Mortgagor pays all premiums, the coverage will remain in
place until (i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise
terminated pursuant to the Homeowners Protection Act of 1998, 12 USC Section
4901, et seq. In the event that such PMI Policy shall be terminated other than
as required by law, the Servicer shall obtain from another Qualified Insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated PMI Policy. If the insurer shall cease to be a
Qualified Insurer, the Servicer shall, in accordance with Accepted Servicing
Practices, determine whether recoveries under the PMI Policy are jeopardized for
reasons related to the financial condition of such insurer, it being understood
that the Servicer shall in no event have any responsibility or liability for any
failure to recover under the PMI Policy for such reason. If the Servicer
determines that recoveries are so jeopardized, it shall notify the Owner and the
Mortgagor, if required, and obtain from another Qualified Insurer a replacement
insurance policy. The Servicer shall not take any action which would result in
noncoverage under any applicable PMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Servicer shall promptly notify the insurer under
the related PMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such PMI Policy and shall take all actions which
may be required by such insurer as a condition to the continuation of coverage
under such PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Servicer shall obtain a replacement
PMI Policy as provided above.
In the event that the Servicer's rights hereunder are terminated pursuant
to Section 10.01 the Servicer shall pay any premiums on each LPMI Policy (which
may include a one-time lump sum to the related LPMI provider to continue the
related LPMI Policy) until the applicable Mortgage Loans have been paid in full
or otherwise liquidated or another entity acceptable to the insurers of such
LPMI Policy undertakes to pay such LPMI premiums.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any PMI Policy in a timely fashion in accordance with the terms of such
PMI Policy and, in this regard, to take such action as shall be necessary to
permit recovery under any PMI Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Servicer under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
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Any premiums payable on LPMI Policies will be paid from the Servicer's own
funds without reimbursement.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Owner or the Owner's designee, 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.
The Servicer shall manage, conserve, protect and operate each REO Property
for the Owner solely for the purpose of its prompt disposition and sale. The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Servicer shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Servicer deems to
be in the best interest of the Owner.
The Servicer shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless (i) a REMIC election has
not been made with respect to the arrangement under which the Mortgage Loans and
the REO Property are held, and (ii) the Servicer determines that a longer period
is necessary for the orderly liquidation of such REO Property. If a period
longer than one year 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 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.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Servicer at
such price, and upon such terms and conditions, as the Servicer deems to be in
the best interests of the Owner. The proceeds of sale of the REO Property shall
be promptly deposited in the Custodial Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Servicer shall reimburse itself
for any related unreimbursed Servicing Advances, unpaid Servicing Fees and
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unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Owner.
The Servicer shall withdraw from the Custodial Account funds necessary for
the proper operation management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any managing agent of the Servicer, or the Servicer itself. The Servicer
shall make monthly distributions on each Remittance Date to the Owner of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in this Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the
Servicer shall furnish to the Owner on or before the Remittance Date each month
a statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Servicer's efforts in connection with
the sale of such REO Property and any rental of such REO Property incidental to
the sale thereof for the previous month. That statement shall be accompanied by
such other information as the Owner shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed in lieu of foreclosure, the Servicer
shall submit to the Owner a liquidation report with respect to such Mortgaged
Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Servicer shall report such foreclosure or abandonment as required pursuant
to Section 6050J of the Code. The Servicer shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
Section 4.20 Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Servicer shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. Upon the discovery by
the Servicer or the receipt of notice from the Owner that the Servicer has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the
32
Servicer shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss or deferral caused the Owner thereby.
Section 4.21 Confidentiality/Protection of Customer Information.
The Servicer shall keep confidential and shall not divulge to any party,
without the Owner's prior written consent, the price paid by the Owner for the
Mortgage Loans, except to the extent that it is reasonable and necessary for the
Servicer to do so in working with legal counsel, auditors, taxing authorities or
other governmental agencies. Each party agrees that it shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information shall maintain appropriate administrative, technical and physical
safeguards to protect the security, confidentiality and integrity of Customer
Information, including maintaining security measures designed to meet the
objectives of the Interagency Guidelines Establishing Standards for Safeguarding
Customer Information, 66 Fed. Reg. 8616 (the "Interagency Guidelines"). For
purposes of this Section, the term "Customer Information" shall have the meaning
assigned to it in the Interagency Guidelines.
Section 4.22 Credit Reporting.
For Each Mortgage Loan, the Servicer shall furnish on a monthly basis
complete information on the related borrower credit files to Equifax, Experian
and Trans Union Credit Information Servicer, in accordance with the Fair Credit
Reporting Act and its implementing regulations.
Section 4.23 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Servicer shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms of the Buydown Agreement). With respect to each Buydown Mortgage
Loan, the Servicer will distribute to the Owner on each Remittance Date an
amount of Buydown Funds equal to the amount that, when added to the amount
required to be paid on such date by the related Mortgagor, pursuant to and in
accordance with the related Buydown Agreement, equals the full Monthly Payment
that would otherwise be required to be paid on such Mortgage Loan by the related
Mortgagor under the terms of the related Mortgage Note (as if the Mortgage Loan
were not a Buydown Mortgage Loan and without regard to the related Buydown
Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Servicer or the
insurer under any related Primary Insurance Policy) the Servicer shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such
33
Buydown Mortgage Loan, distribute to the Owner all remaining Buydown Funds for
such Mortgage Loan then remaining in the Escrow Account. Pursuant to the terms
of each Buydown Agreement, any amounts distributed to the Owner in accordance
with the preceding sentence will be applied to reduce the outstanding principal
balance of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown
Mortgage Loan prepays such Mortgage Loan in its entirety during the related
Buydown Period, the Servicer shall be required to withdraw from the Escrow
Account any Buydown Funds remaining in the Escrow Account with respect to such
Buydown Mortgage Loan in accordance with the related Buydown Agreement. If a
principal prepayment by a Mortgagor on a Buydown Mortgage Loan during the
related Buydown Period, together with any Buydown Funds then remaining in the
Escrow Account related to such Buydown Mortgage Loan, would result in a
principal prepayment of the entire unpaid principal balance of the Buydown
Mortgage Loan, the Servicer shall distribute to the Owner on the Remittance Date
occurring in the month immediately succeeding the month in which such Principal
Prepayment is received, all Buydown Funds related to such Mortgage Loan so
remaining in the Escrow Account, together with any amounts required to be
deposited into the Custodial Account.
Section 4.24 Establishment of and Deposits to Subsidy Account.
The Servicer shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Owner, its successors or assigns, and/or subsequent
purchasers of residential Mortgage Loans, and various Mortgagors." The Subsidy
Account shall be an eligible deposit account established with a Qualified
Depository.
The Servicer shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in accordance
with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the termination
of this Agreement.
Notwithstanding anything to the contrary elsewhere in this Agreement, the
Servicer may employ the Escrow Account as the Subsidy Account to the extent that
the Servicer can separately identify any Subsidy Funds deposited therein.
Section 4.25 Subordination of Second Lien Mortgage Loans.
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The Servicer is authorized, without the prior approval of the Owner, to
consent to the refinancing of any Superior Lien on a Mortgaged Property,
provided, that the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing.
With respect to the Owned Mortgage Loans, where permitted by local law and
where the senior lienholder is required to notify a junior lienholder be named
as a party defendant in foreclosure proceedings in order to foreclose such
junior lienholder's equity of redemption, the Servicer shall file (or cause to
be filed) a request for notice of any action by a superior lienholder under a
related senior lien for the protection of the Owner's interest in the related
Second Lien Mortgage Loan. Any costs associated with such filing shall be a
Servicing Advance reimbursable pursuant to Section 4.05(iii).
With respect to Purchased Mortgage Loans, where permitted by local law and
where the senior lienholder is required to notify a junior lienholder be named
as a party defendant in foreclosure proceedings in order to foreclose such
junior lienholder's equity of redemption, the Servicer shall, at the reasonable
expense of the Owner, file (or cause to be filed) a request for notice of any
action by a superior lienholder under a related senior lien for the protection
of the Owner's interest in the related Second Lien Mortgage Loan.
If the Servicer is notified that any superior lienholder has accelerated or
intends to accelerate the obligations secured by the superior lien, or has
declared or intends to declare a default under the superior mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Servicer shall take whatever
actions are necessary to protect the interests of the Owner, and/or to preserve
the security of the related Mortgage Loan, subject to any requirements
applicable to real estate mortgage investment conduits pursuant to the Code. The
Servicer shall advance the funds necessary to cure the default or reinstate the
superior lien if the Servicer determines that such advance is in the best
interests of the Owner. The Servicer shall not make such an advance except to
the extent that it determines in its reasonable good faith judgment that such
advance will be recoverable from Liquidation Proceeds on the related Mortgage
Loan. The Servicer shall thereafter take such action as is necessary to recover
the amount so advanced.
Section 4.26 Use of Subservicers and Subcontractors.
The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer under this
Agreement or any Reconstitution Agreement unless the Servicer complies with the
provisions of paragraph (a) of this Section 4.26. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer under this Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions of
paragraph (b) of this Section 4.26.
(a) It shall not be necessary for the Servicer to seek the consent of the
Owner or any Depositor to the utilization of any Subservicer. The Servicer
shall cause any Subservicer used by the Servicer (or by any Subservicer)
for the benefit of the Owner and any
35
Depositor to comply with the provisions of this Section 4.26 and with
Sections 6.04, 6.06, 9.01(e)(iii), 9.01(e)(v), 9.01(e)(vi) and 9.01(f) of
this Agreement to the same extent as if such Subservicer were the Servicer,
and to provide the information required with respect to such Subservicer
under Section 9.01(e)(iv) of this Agreement. The Servicer shall be
responsible or obtaining from each Subservicer and delivering to the Owner
and any Depositor any servicer compliance statement required to be
delivered by such Subservicer under Section 6.04 and any assessment of
compliance and attestation required to be delivered by such Subservicer
under Section 6.06 and any certification required to be delivered to the
Person that will be responsible for signing the Sarbanes Certification
under Section 6.06 as and when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent of the
Owner or any Depositor to the utilization of any Subcontractor. The
Servicer shall promptly upon request provide to the Owner and any Depositor
(or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to
the Owner and such Depositor) of the role and function of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided
by each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 6.06 and 9.01(f) of this Agreement to
the same extent as if such Subcontractor were the Servicer. The Servicer shall
be responsible for obtaining from each Subcontractor and delivering to the Owner
and any Depositor any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 6.06, in each case as and when
required to be delivered.
Section 4.27 Prepayment Charge Waivers.
With respect to the Mortgage Loans and to the extent consistent with the
terms of this Agreement, the Servicer may waive (or permit a subservicer to
waive) a Prepayment Charge only under the following circumstances: (i) such
waiver is standard and customary in servicing similar Mortgage Loans and (ii)
such waiver relates to a default or a reasonably foreseeable default and would,
in the reasonable judgment of the Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan. If a Prepayment Charge or any portion thereof is waived for any reason
other than as permitted by meeting the standards described in clauses (i) and
(ii) above, then the Seller shall pay to the Owner the amount of such waived
Prepayment Charge or portion thereof. Such remedy amount payable by the Seller
shall accompany the Seller's next scheduled monthly remittance to the Owner
following the calendar month in which the related Principal Prepayment occurred.
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ARTICLE V
PAYMENTS TO OWNER
Section 5.01 Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Servicer is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but due on a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date, and minus (e) any amounts attributable to Buydown Funds being held in the
Custodial Account, which amounts shall be remitted on the Remittance Date next
succeeding the Due Period for such amounts.
With respect to any remittance received by the Owner after the second
Business Day following the Business Day on which such payment was due, the
Servicer shall pay to the Owner interest on any such late payment at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by the
Servicer on the date such late payment is made and shall cover the period
commencing with the day following such second Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the 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.
Section 5.02 Statements to Owner.
With respect to the Owned Mortgage Loans and the Purchased Mortgage Loans
that have the Principal Prepayment Period set forth in clause (B) of such
definition, not later than the tenth (10th) Business Day of each month, the
Servicer shall furnish to the Owner a monthly remittance advice, with a trial
balance report attached thereto, as to the remittance period ending on the last
day of the preceding month. With respect to the Purchased Mortgage Loans that
have the Principal Prepayment Period set forth in clause (A) of such definition
not later than the tenth (10th) Business Day of each month, the Servicer shall
furnish to the Owner a a preliminary monthly remittance advice, with
a trial balance report attached thereto, as to the remittance period ending on
the last day of the preceding month and a final monthly remittance advice, with
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a trial balance report attached thereto, as to the remittance period ending on
the last day of the preceding month two (2) Business Days following the 14th day
of the month.
Section 5.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent at
the close of business on the immediately preceding Determination Date or which
were deferred pursuant to Section 4.01. Any amounts held for future distribution
and so used shall be replaced by the 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 last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including REO Disposition Proceeds, Insurance Proceeds and Condemnation
Proceeds) with respect to the Mortgage Loan; provided, however, that such
obligation shall cease if the Servicer determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable by
the Servicer from Liquidation Proceeds, REO Disposition 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.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Servicer shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Servicer shall not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related PMI Policy, if
any.
If the Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Servicer shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes
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liable under the Mortgage Note and the original Mortgagor remains liable thereon
or (ii) in the event the Servicer is unable under applicable law to require that
the original Mortgagor remain liable under the Mortgage Note and the Servicer
has the prior consent of the primary mortgage guaranty insurer, a substitution
of liability agreement with the purchaser of the Mortgaged Property pursuant to
which the original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. If an assumption fee is collected by the Servicer for entering
into an assumption agreement the fee will be retained by the Servicer as
additional servicing compensation. In connection with any such assumption,
neither the Mortgage Interest Rate borne by the related Mortgage Note, the term
of the Mortgage Loan, the outstanding principal amount of the Mortgage Loan nor
any other material terms shall be changed without Owner's consent.
To the extent that any Mortgage Loan is assumable, the Servicer shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Servicer diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Retained Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the monthly
remittance advice as provided in Section 5.02, and may request the release of
any Mortgage Loan Documents.
With respect to each Owned Mortgage Loan, 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 repurchase the related Mortgage Loan at
the Repurchase Price by deposit thereof in the Custodial Account within two (2)
Business Days of receipt of such demand by the Owner. The Servicer shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
With respect to each Purchased Mortgage Loan, 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 deposit in the Custodial Account the
entire outstanding principal balance, plus all accrued interest on such Mortgage
Loan, on the day preceding the Remittance Date in the month following the date
of such release. The Servicer shall maintain the Fidelity Bond and Errors and
Omissions Insurance Policy as provided for in Section 4.12 insuring the Servicer
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.
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Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled
to withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Owner to
pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Servicer to the extent not required to be deposited in the Custodial
Account. The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
On or before March 1 of each calendar year, commencing in 2007, the
Servicer shall deliver to the Owner and any Depositor a statement of compliance
addressed to the Owner and such Depositor and signed by an authorized officer of
the Servicer, to the effect that (a) a review of the Servicer's activities
during the immediately preceding calendar year (or applicable portion thereof)
and of its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer's supervision, and
(b) to the best of such officers' knowledge, based on such review, the Servicer
has fulfilled all of its obligations under this Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
Except with respect to Securitization Transactions occurring on or after
January 1, 2006, on or before February 28, 2006, the Servicer, at its expense,
shall cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
each Owner to the effect that such firm has examined certain documents and
records relating to the servicing of the mortgage loans similar in nature and
that such firm is of the opinion that the provisions of this or similar
Agreements have been complied with, and that, on the basis of such examination
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial, and
(ii) such other exceptions as shall be set forth in such statement. By providing
Owner a copy of a Uniform Single Attestation Program Report from their
independent public accountant's on an annual basis, Servicer shall be considered
to have fulfilled its obligations under this Section 6.05.
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Section 6.06 Report on Assessment of Compliance and Attestation.
(a) With respect to any Mortgage Loans that are the subject of a
Securitization Transaction occurring on or after January 1, 2006, on or before
March 1 of each calendar year, commencing in 2007, the Servicer shall:
(i) deliver to the Owner and any Depositor a report (in form and
substance reasonably satisfactory to the Owner and such
Depositor) regarding the Servicer's assessment of compliance
with the Servicing Criteria during the immediately preceding
calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall
be addressed to the Owner and such Depositor and signed by an
authorized officer of the Servicer, and shall address each of
the Servicing Criteria set forth in an exhibit delivered by the
Servicer at the time of a Securitization Transaction, which
exhibit shall be substantially in the form of Exhibit C attached
hereto;
(ii) deliver to the Owner and any Depositor a report of a registered
public accounting firm reasonably acceptable to the Owner and
such Depositor that attests to, and reports on, the assessment
of compliance made by the Servicer and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined by the
Servicer pursuant to Section 4.26(b) to be "participating in the
servicing function" within the meaning of Item 1122 of
Regulation AB, to deliver to the Owner and any Depositor an
assessment of compliance and accountants' attestation as and
when provided in paragraphs (i) and (ii) of this Section 6.06;
and
(iv) deliver to the Owner, any Depositor and any other Person that
will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of 2002) on behalf of an asset-backed issuer with respect to
a Securitization Transaction a certification in the form
attached hereto as Exhibit D.
The Servicer acknowledges that the parties identified in clause (a)(iv)
above may rely on the certification provided by the Servicer pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
(b) Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(i) shall address each of the Servicing Criteria set forth in an
exhibit delivered to the Owner at the time of a Securitization Transaction or,
in the case of a Subservicer subsequently
41
appointed as such, on or prior to the date of such appointment, which exhibit
shall be substantially in the form of Exhibit C attached hereto. An assessment
of compliance provided by a Subcontractor pursuant to Section 6.06(iii) need not
address any elements of the Servicing Criteria other than those specified by the
Servicer pursuant to Section 4.26.
Section 6.07 Remedies.
(i) Any failure by the Servicer, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Sections 6.04, 6.05, or Section 6.06, or any breach by the Servicer of a
representation or warranty set forth in Section 9.01(e)(vi)(A), or in a writing
furnished pursuant to Section 9.01(e)(vi)(B) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Servicer of a
representation or warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section 6.07, immediately
and automatically, without notice or grace period, constitute an Event of
Default with respect to the Servicer under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Owner or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Servicer under this Agreement and/or any applicable Reconstitution Agreement
without payment (notwithstanding anything in this Agreement or any applicable
Reconstitution Agreement to the contrary) of any compensation to the Servicer;
provided that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer,
such provision shall be given effect.
(ii) Any failure by the Servicer, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when and
as required under Section 6.04 or Section 6.06, including any failure by the
Company to identify pursuant to Section 9.01(e)(vi)(B) any Subcontract
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, which continues unremedied for ten (10) calendar days after the
date on which such information, report, certification or accountants' letter was
required to be delivered shall constitute an Event of Default with respect to
the Servicer under this Agreement and any applicable Reconstitution Agreement,
and shall entitle the Owner or Depositor, as applicable, in its sole discretion
to terminate the rights and obligations of the Servicer under this Agreement
and/or any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the Servicer;
provided that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer,
such provision shall be given effect.
(iii) The Servicer shall promptly reimburse the Owner (or any designee of
the Purchaser, such as a master servicer) and any Depositor, as applicable, for
all reasonable expenses incurred by the Owner (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Servicer as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit
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whatever rights the Owner or any Depositor may have under other provisions of
this Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether in equity or at law, such as an action for damages, specific performance
or injunctive relief.
Section 6.08 Right to Examine Servicer Records.
The Owner, or its designee, shall have the right to examine and audit any
and all of the books, records, or other information of the Servicer, whether
held by the Servicer or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Owner shall pay its own expenses associated with such
examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Servicer shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860F(a) (2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE VII
SERVICER TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Servicer shall furnish to the Owner
such periodic, special, or other reports or information, and copies or originals
of any documents contained in the Servicing File for each Mortgage Loan provided
for herein. All other special reports or information not provided for herein as
shall be necessary, reasonable, or appropriate with respect to the Owner or any
regulatory agency will be provided at the Owner's expense. All such reports,
documents or information shall be provided by and in accordance with all
reasonable instructions and directions which the Owner may give.
The Servicer shall execute and deliver all such instruments and take all
such action as the Owner may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
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In connection with marketing the Mortgage Loans, the Owner may make
available to a prospective purchaser a Consolidated Statement of Operations of
the Servicer for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Servicer, upon request, also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Servicer (and are available upon request to
members or stockholders of the Servicer or to the public at large).
The Servicer also shall make available to Owner or prospective purchasers a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Servicer or the financial
statements of the Servicer, and to permit any prospective purchaser to inspect
the Servicer's servicing facilities for the purpose of satisfying such
prospective purchaser that the Servicer has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer shall indemnify the Owner and hold it harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Owner may sustain in any way related to the failure of the
Servicer to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Servicer immediately shall
notify the Owner if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Owner) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Owner in respect of
such claim. The Servicer shall follow any written instructions received from the
Owner in connection with such claim. The Owner promptly shall reimburse the
Servicer for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Servicer's repurchase
obligation pursuant to Section 3.02, indemnification obligation pursuant to this
Section 8.01, or the failure of the Servicer to service and administer the
Mortgage Loans in strict compliance with the terms of this Agreement.
Section 8.02 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and franchises
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or 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.
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Any person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall be the successor of the Servicer hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the successor or surviving Person shall be an institution which is
a Xxxxxx Xxx/Xxxxxxx Mac-approved Servicer in good standing. Furthermore, in the
event the Servicer transfers or otherwise disposes of all or substantially all
of its assets to an affiliate of the Servicer, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Owner for all of the
Servicer's obligations and liabilities hereunder.
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Section 8.03 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Servicer and any director, officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Servicer may, with the
consent of the Owner, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Servicer shall be entitled to reimbursement from the
Owner of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Servicer.
The Owner has entered into this Agreement with the Servicer and subsequent
purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Servicer, and the representations as to the adequacy of its
servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Servicer shall neither assign this Agreement or the servicing rights hereunder
or delegate its rights or duties hereunder (other than pursuant to Section 4.01)
or any portion hereof or sell or otherwise dispose of all of its property or
assets without the prior written consent of the Owner, which consent shall not
be unreasonably withheld.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Servicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder (other than pursuant
to Section 4.01) or any portion thereof or sell or otherwise dispose of all or
substantially all of its property or assets, without the prior written consent
of the Owner, then the Owner shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Servicer or any
third party.
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ARTICLE IX
REMOVAL OF MORTGAGE LOANS FROM AGREEMENT
Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement
The Owner and the Servicer agree that with respect to some or all of the
Mortgage Loans, the Owner, at its sole option, may effect Whole Loan Transfers,
Agency Sales or Securitization Transactions, retaining the Servicer as the
servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage Loans
transferred may cease to be serviced under this Agreement; provided, however,
that, in the event that any Mortgage Loan transferred pursuant to this Section
9.01 is rejected by the transferee, the Servicer shall continue to service such
rejected Mortgage Loan on behalf of the Owner in accordance with the terms and
provisions of this Agreement.
The Servicer shall cooperate with the Owner in connection with each Whole
Loan Transfer, Agency Sale or Securitization Transaction in accordance with this
Section 9.01. In connection therewith:
(a) the Servicer shall make all representations and warranties with
respect to the Mortgage Loans in Section 6(b) of the Master Mortgage
Loan Purchase Agreement as of the related Servicing Date and with
respect to the Servicer itself as of the closing date of each Whole
Loan Transfer, Agency Sale or Securitization Transaction;
(b) the Servicer shall negotiate in good faith and execute any
seller/servicer agreements, pooling and servicing agreement or
assignment, assumption and recognition agreement required to
effectuate the foregoing, provided such agreements create no greater
obligation or cost on the part of the Servicer than otherwise set
forth in this Agreement;
(c) [reserved];
(d) the Servicer shall:
(i) provide such additional representations, warranties, covenants,
opinions of counsel, 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 Whole Loan Transfers, Agency Sales or
Securitization Transactions. The Owner shall pay all third party
costs associated with the preparation of such information. The
Servicer shall execute any seller/servicer agreements required
within a reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient for the
Servicer and Servicer's counsel to review such seller/servicer
agreements. Under
47
this Agreement, the Servicer shall retain a Servicing Fee for
each Mortgage Loan at the Servicing Fee Rate; and
(ii) at any time as required by any Rating Agency, provide such
additional documents from the related Retained Mortgage File to
the Custodian as may be required by such Rating Agency within
fifteen (15) Business Days of receipt of such request.
(e) in connection with any Securitization Transaction, the Servicer, in
its capacity as Seller under the Master Mortgage Loan Purchase
Agreement, shall (1) within five (5) Business Days following request
by the Owner or any Depositor, provide to the Owner and such Depositor
(or, as applicable, cause each Third-Party Originator and each
Subservicer to provide), in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor, the
information and materials specified in paragraphs (i), (ii), (iii) and
(vii) of this subsection (e), and (2) as promptly as practicable
following notice to or discovery by the Servicer, provide to the Owner
and any Depositor (in writing and in form and substance reasonably
satisfactory to the Owner and such Depositor) the information
specified in paragraph (iv) of this subsection (e).
(i) If so requested by the Owner or any Depositor, the Servicer, in
its capacity as Seller under the Master Mortgage Loan Purchase
Agreement, shall provide such information regarding (1) the
Seller, as originator of the Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified Correspondent), or
(2) each Third-Party Originator, and (3) as applicable, the
Servicer, in its capacity as Servicer hereunder, shall provide
such information regarding each Subservicer, as is requested for
the purpose of compliance with Items 1103(a)(1), 1105, 1110,
1117 and 1119 of Regulation AB. Such information shall include,
at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and
how long the originator has been engaged in originating
residential mortgage loans, which description shall include
a discussion of the originator's experience in originating
mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Owner or any
Depositor, to an analysis of the performance of the Mortgage
Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s)
as the Mortgage Loans and such other information as the
Owner or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
48
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against
the Servicer, in its capacity as Seller under the Master
Mortgage Loan Purchase Agreement or in its capacity as
Servicer hereunder, each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or relationship between the
Servicer, in its capacity as Seller under the Master
Mortgage Loan Purchase Agreement or in its capacity as
Servicer hereunder, each Third-Party Originator, each
Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified
to the Servicer by the Owner or any Depositor in writing in
advance of a Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Owner or any Depositor, the Servicer, in
its capacity as Seller under the Master Mortgage Loan Purchase
Agreement, 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 Owner as provided below)
originated by (1) the Servicer, in its capacity as Seller under
the Master Mortgage Loan Purchase Agreement, if the Servicer, in
its capacity as Seller under the Master Mortgage Loan Purchase
Agreement, is an originator of Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (2) each Third-Party Originator. Such Static Pool
Information shall be prepared by the Servicer (or Third-Party
Originator) on the basis of its reasonable, good faith
interpretation of the requirements of Item 1105(a)(1)-(3) of
Regulation AB. To the extent that there is reasonably available
to the Servicer, in its capacity as Seller under the Master
Mortgage Loan Purchase Agreement, (or Third-Party Orignator)
Static Pool Information with respect to more than one mortgage
loan type, the Owner 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
Servicer, in its capacity as Seller under the Master Mortgage
Loan Purchase Agreement, and need not be customized for the
Owner or any
49
Depositor. Such Static Pool Information for each vintage
origination year or prior securitized pool, as applicable, shall
be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage
origination year or prior securitized pool. The most recent
periodic increment must be as of a date no later than 135 days
prior to the date of the prospectus or other offering document
in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent
record of the information provided, such as a portable document
format (pdf) file, or other such electronic format reasonably
required by the Owner or the Depositor, as applicable.
If so requested by the Owner or any Depositor, the Servicer, in
its capacity as Seller under the Master Mortgage Loan Purchase
Agreement, shall provide (or, as applicable, cause each
Third-Party Originator to provide), at the expense of the
requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement),
such agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Owner or Depositor, as
applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with
respect to the Servicer's (in its capacity as Seller under the
Master Mortgage Loan Purchase Agreement) or Third-Party
Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Owner or such Depositor shall
reasonably request. Such statements and letters shall be
addressed to and be for the benefit of such parties as the Owner
or such Depositor shall designate, which may include, by way of
example, any sponsor, any Depositor and any broker dealer acting
as underwriter, placement agent or initial purchaser with
respect to a Securitization Transaction. Any such statement or
letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance
by the addressees designated by the Owner or such Depositor.
(iii) If so requested by the Owner or any Depositor, the Servicer
shall provide such information regarding the Servicer, as
servicer of the Mortgage Loans, and each Subservicer (each of
the Servicer and each Subservicer, for purposes of this
paragraph, a "Servicer"), as is requested for the purpose of
compliance with Items 1108 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
50
detailed discussion of the Servicer's experience in, and
procedures for, the servicing function it will perform under
this Agreement and any Reconstitution Agreements;
information regarding the size, composition and growth of
the Servicer's portfolio of residential mortgage loans of a
type similar to the Mortgage Loans and information on
factors related to the Servicer that may be material, in the
good faith judgment of the Purchaser or any Depositor, to
any analysis of the servicing of the Mortgage Loans or the
related asset-backed securities, as applicable, including,
without limitation:
(1) whether any prior securitizations of mortgage loans of
a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early
amortization or other performance triggering event
because of servicing during the three-year period
immediately preceding the related Securitization
Transaction;
(2) the extent of outsourcing the Servicer utilizes;
(3) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria
with respect to other securitizations of residential
mortgage loans involving the Servicer as a servicer
during the three-year period immediately preceding the
related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in
a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing
performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization
Transaction to the Servicer's policies or procedures with
respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreements for mortgage
loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse
financial event or circumstance involving the Servicer could
have a material adverse
51
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 so requested by the Owner 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 Servicer
shall (or shall cause each Subservicer and Third-Party
Originator to) (a) notify the Owner and any Depositor in writing
of (1) any material litigation or governmental proceedings
pending against the Servicer, in its capacity as Seller under
the Master Mortgage Loan Purchase Agreement or in its capacity
as Servicer hereunder, 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 Servicer, in its capacity as Seller
under the Master Mortgage Loan Purchase Agreement or in its
capacity as Servicer hereunder, any Subservicer or any
Third-Party Originator and any of the parties specified in
Section 9.01(e)(i)(D) (and any other parties identified in
writing by the requesting party) with respect to such
Securitization Transaction, and (b) provide to the Owner and any
Depositor a description of such proceedings, affiliations or
relationships.
52
(v) As a condition to the succession to the Servicer or any
Subservicer as servicer or subservicer under this Agreement or
any Reconstitution Agreement by any Person (a) into which the
Servicer or such Subservicer may be merged or consolidated, or
(b) which may be appointed as a successor to the Servicer or any
Subservicer, the Servicer shall provide to the Owner and any
Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written
notice to the Owner and any Depositor of such succession or
appointment and (y) in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor, all
information reasonably requested by the Owner or any Depositor
in order to comply with is reporting obligation under Item 6.02
of Form 8-K with respect to any class of asset-backed
securities.
(vi) (A) The Servicer shall be deemed to represent to the Owner and
to any Depositor, as of the date on which information is first
provided to the Owner under this Section 9.01(e) that, except as
disclosed in writing to the Owner or such Depositor prior to
such date: (1) the Servicer is not aware and has not received
notice that any default, early amortization or other performance
triggering event has occurred as to any other securitization due
to any act or failure to act of the Servicer; (2) the Servicer
has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; (3) no
material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage
loans involving the Servicer as servicer has been disclosed or
reported by the Servicer; (4) no material changes to the
Servicer's policies or procedures with respect to the servicing
function it will perform under this Agreement and any
Reconstitution Agreement for mortgage loans of a type similar to
the Mortgage Loans have occurred during the three-year period
immediately preceding the related Securitization Transaction;
(5) there are no aspects of the Servicer's financial condition
that could have a material adverse effect on the performance by
the Servicer of its servicing obligations under this Agreement
or any Reconstitution Agreement; (6) there are no material legal
or governmental proceedings pending (or known to be
contemplated) against the Servicer (as Seller or Servicer), any
Subservicer or any Third-Party Originator; and (7) there are no
affiliations, relationships or transactions relating to the
Servicer (as Seller or Servicer), any Subservicer or any
Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(B) If so requested by the Owner or any Depositor on any date
following the date on which information is first provided to the
Owner or any Depositor under this Section 9.01(e), the Servicer
shall, within five (5) Business Days following such request,
confirm in writing the accuracy of
53
the representations and warranties set forth in sub clause (A)
above or, if any such representation and warranty is not
accurate as of the date of such request, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the
requesting party.
(vii) In addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any Depositor,
the Servicer shall provide such information reasonably available
to the Servicer regarding the performance or servicing of the
Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of Regulation AB.
(f) The Servicer, in its capacity as Seller under the Master Mortgage Loan
Purchase Agreement and in its capacity as Servicer hereunder, shall
indemnify the Owner, each affiliate of the Owner, and each of the
following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person responsible for the
preparation, execution or filing of any report required to be filed
with the Commission with respect to such Securitization Transaction,
or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Securitization
Transaction; each broker dealer acting as underwriter, placement agent
or initial purchaser, each Person who controls any of such parties or
the Depositor (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act); and the respective present and
former directors, officers, employees and agents 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:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification,
accountants' letter or other material provided under Sections
4.26, 6.04(ii), 6.06, 9.01(d) and (e) by or on behalf of the
Servicer, in its capacity as Seller under the Master Mortgage
Loan Purchase Agreement or in its capacity as Servicer
hereunder, or provided under Sections 4.26, 6.04(ii), 6.06,
9.01(d) and (e) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the
"Seller/Servicer Information"), or (B) the omission or alleged
omission to state in the Seller/Servicer Information a material
fact required to be stated in the Seller/Servicer Information or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the
Seller/Servicer Information and not to any other information
communicated in connection with a sale or purchase of
securities, without regard to whether the Seller/Servicer
Information or
54
any portion thereof is presented together with or separately
from such other information;
(ii) any failure by the Servicer, in its capacity as Seller under the
Master Mortgage Loan Purchase Agreement or in its capacity as
Servicer hereunder, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as
required under Sections 4.26, 6.04(ii), 6.06, 9.01(d) and (e),
including any failure by the Servicer to identify pursuant to
Section 4.26(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of
Regulation AB; or
(iii) any breach by the Servicer of a representation or warranty set
forth in Section 9.01(e)(vi)(A) or in a writing furnished
pursuant to Section 9.01(e)(vi)(B) and made as of a date prior
to the closing date of the related Securitization Transaction,
to the extent that such breach is not cured by such closing
date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section
9.01(e)(vi)(B) to the extent made as of a date subsequent to
such closing date.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(f), the Servicer shall promptly reimburse the
Owner, any Depositor, as applicable, and each Person responsible for
the preparation, execution or filing of any report required to be
filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to
such Securitization Transaction, for all costs reasonably incurred by
each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as
required by the Seller/Servicer, any Subservicer, any Subcontractor or
any Third-Party Originator.
(g) The Owner and each Person who controls the Owner (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange
Act) shall indemnify the Servicer, each affiliate of the Servicer,
each Person who controls any of such parties or the Servicer (within
the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) and the respective present and former directors,
officers, employees and agents of each of the foregoing and of the
Servicer, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any offering materials related to a
Securitization Transaction, including without limitation the
registration statement, prospectus, prospectus supplement, any
private placement memorandum, any
55
computational materials, and any amendments or supplements to the
foregoing (collectively, the "Securitization Materials") or (B)
the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or
alleged omission is other than a statement or omission arising
out of, resulting from, or based upon the Servicer Information.
The Owner and the Servicer acknowledge and agree that the purpose of
Section 9.01(e) is to facilitate compliance by the Owner and any Depositor with
the provisions of Regulation AB and related rules and regulations of the
Commission. Neither the Owner nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder. The Servicer acknowledges that interpretations of the requirements
of Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees to
comply with requests made by the Owner or any Depositor in good faith for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Securitization
Transaction, the Servicer shall cooperate fully with the Owner to deliver to the
Owner (including any of its assignees or designees) and any Depositor, any and
all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Owner or any Depositor to
permit the Owner or such Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to the Servicer (as Seller or
Servicer), any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans, reasonably believed by the Owner or any
Depositor to be necessary in order to effect such compliance.
In the event the Owner has elected to have the Servicer hold record title
to the Mortgages, prior to the Reconstitution Date the Servicer shall prepare an
Assignment of Mortgage in blank or to the trustee from the Servicer acceptable
to the trustee for each Mortgage Loan that is part of the Whole Loan Transfers,
Agency Sales or Securitization Transactions. The Owner shall pay all preparation
and recording costs associated therewith, if the Assignments of Mortgage have
not been previously prepared and recorded in the name of the Owner or its
designee. The Servicer shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them as
required by the trustee upon the Servicer's receipt thereof. Additionally, the
Servicer shall prepare and execute, at the direction of the Owner, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by a Rating Agency, Owner or successor owner in connection
with any Whole Loan Transfer, Agency Sale or Securitization Transaction, the
Servicer shall deliver such additional documents from its Retained Mortgage File
within fifteen (15) Business Days, upon receipt of request by the Owner, to the
Custodian, successor owner or other designee of the Owner as said Rating Agency,
Owner or successor owner may require.
56
All Mortgage Loans (i) not sold or transferred pursuant to Whole Loan
Transfers, Agency Sales or Securitization Transactions or (ii) that are subject
to a Securitization Transaction for which the related trust is terminated for
any reason, shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Servicer:
(i) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which
continues unremedied for a period of two (2) Business Days after the
date upon which written notice of such failure, requiring the same
to be remedied, shall have been given to the Servicer by the Owner;
or
(ii) failure by the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement or in the Custodial Agreement
which continues unremedied for a period of thirty (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 by the Custodian; provided the Servicer shall have additional
time to remedy such failure if reasonably requested by the Servicer,
and upon proof by the Servicer that it is diligently seeking to
remedy such failure; provided that such initial and additional cure
period shall not exceed sixty (60) days in the aggregate; or
(iii) failure by the Servicer to maintain its license to do business in
any jurisdiction where the Mortgaged Property is located if such
license is required; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including
bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Servicer and such decree or
order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(v) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Servicer or of or relating to all or substantially
all of its property; or
57
(vi) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of
any applicable insolvency, bankruptcy or reorganization statute,
make an assignment for the benefit of its creditors, voluntarily
suspend payment of its obligations or cease its normal business
operations for three Business Days; or
(vii) the Servicer ceases to meet the qualifications of a Xxxxxx
Mae/Xxxxxxx Mac servicer; or
(viii) 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 Section 8.04; or
(ix) failure by the Servicer to duly perform, within the required time
period, its obligations under Sections 6.04, 6.05, 6.06 or 9.01(c),
which failure continues unremedied for a period of fifteen (15) 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.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Owner may have at law or
equity to damages, including injunctive relief and specific performance, the
Owner, by notice in writing to the Servicer, may terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from any Owner, the Servicer
shall prepare, execute and deliver to the successor entity designated by the
Owner any and all documents and other instruments, place in such successor's
possession all Retained Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Servicer's sole
expense. The Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account, Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any
58
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Servicer and the Owner in writing.
59
Section 11.02 Termination Without Cause.
The Owner may terminate, at its sole option, any rights the Servicer may
have hereunder, without cause as provided in this Section 11.02. Any such notice
of termination shall be in writing and delivered to the Servicer by registered
mail as provided in Section 12.05.
The Servicer shall be entitled to receive, as such liquidated damages, upon
the transfer of the servicing rights, an amount equal to: (i) 2.75% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Owner to the Servicer with respect to all of the
Mortgage Loans for which a servicing fee rate of .25% is paid per annum, (ii)
3.25% of the aggregate outstanding principal amount of the Mortgage Loans as of
the termination date paid by the Owner to the Servicer with respect to all of
the Mortgage Loans for which a servicing fee rate of .375% is paid per annum,
and (iii) 3.75% of the aggregate outstanding principal amount of the Mortgage
Loans as of the termination date paid by the Owner to the Servicer with respect
to all of the Mortgage Loans for which a servicing fee rate of .44% or greater
is paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Servicer.
Prior to termination of the Servicer's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01(ii) or Section 11.02 the
Owner shall, (i) succeed to and assume all of the Servicer's responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a successor
having the characteristics set forth in Section 8.02 and which shall succeed to
all rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement prior to the termination of Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Servicer of the representations and warranties
made pursuant to Section 3.01 of this Agreement or the Seller of the
representations and warranties made in the Master Mortgage Loan Purchase
Agreement and the remedies available to the Owner under Section 3.02 and 8.01 of
this Agreement or under the Master Mortgage Loan Purchase Agreement, it being
understood and agreed that the provisions of Sections 3.01, 3.02 and 8.01 of
this Agreement and the representations and warranty and remedy sections of the
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Master Mortgage Loan Purchase Agreement shall be applicable to the Servicer and
the Seller, as applicable, notwithstanding any such sale, assignment,
resignation or termination of the Servicer, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Owner an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Servicer or termination
of this Agreement pursuant to Section 8.04, 10.01, 11.01 or 11.02 shall not
affect any claims that any Owner may have against the Servicer arising out of
the Servicer's actions or failure to act prior to any such termination or
resignation.
The Servicer shall deliver promptly to the successor servicer the funds in
the Custodial Account, Subsidy Account and Escrow Account and all Retained
Mortgage Files, Servicing Files and related documents and statements held by it
hereunder and the Servicer shall account for all funds and shall execute and
deliver such instruments and do such other things as may reasonably be required
to more fully and definitively vest in the successor all such rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify by mail the Owner of such appointment in accordance with the procedures
set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement signed
by the Servicer and the Owner.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Owner.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
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(i) if to the Servicer:
Xxxxx Fargo Bank, N.A.
1 Home Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
Fax: 515/000-0000
In each instance, with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to the Owner in
writing by the Servicer;
(ii) if to Owner:
Citigroup Global Markets Realty Corp.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
or such other address as may hereafter be furnished to the Servicer in
writing by the Owner;
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Servicer shall be rendered as an independent contractor and not as agent for the
Owner.
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Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Servicer and the Owner and
their respective successors and assigns.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Servicer's expense in the event recordation is either necessary
under applicable law or requested by the Owner at its sole option.
Section 12.10 Assignment by Owner.
The Owner shall have the right, without the consent of the Servicer to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Owner hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form attached as Exhibit F, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Owner with respect to such Mortgage Loans. All references to the Owner in this
Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Servicing Date, take any action to solicit
the refinancing of any Mortgage Loan. It is understood and agreed that neither
(1) promotions undertaken by either party or any affiliate which are directed to
the general public at large, including, without limitation, mass mailings based
upon commercially acquired mailing lists, newspaper, radio, television
advertisements nor (ii) serving the refinancing needs of a Mortgagor who,
without solicitation, contacts either party in connection with the refinance of
such Mortgage or Mortgage Loan, shall constitute solicitation under this
Section.
Section 12.12 Further Agreements.
The Owner and the Servicer each agree to execute and deliver to the other
such additional documents, instruments or agreements as may be necessary or
appropriate to effectuate the purposes of this Agreement.
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Section 12.13 Third Party Beneficiary.
For purposes of this Agreement, any master servicer shall be considered a
third party beneficiary to this Agreement entitled to all the rights and
benefits accruing to any master servicer herein as if it were a direct party to
this Agreement.
Section 12.14 Opinion of Counsel.
Upon execution of this Agreement, and upon reasonable request by the Owner,
on each Servicing Date, the Servicer shall provide an Opinion of Counsel in the
form attached hereto as Exhibit G.
[Intentionally Blank - Next Page Signature Page]
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IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
CITIGROUP GLOBAL MARKETS XXXXX FARGO BANK, N.A.
REALTY CORP.
OWNER SERVICER
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxx
--------------------------------- ------------------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxx Xxxxxx
Title: Authorized Agent Title: Assistant Vice President
65
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _________, known to me to be _________
of Xxxxx Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires __________________
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STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _____________________________________,
known to me to be the ______________________________ of Citigroup Global Markets
Realty Corp., the corporation that executed the within instrument and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
________________________________________
Notary Public
My Commission expires __________________
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EXHIBIT A
FORM OF ACKNOWLEDGMENT AGREEMENT
THIS ACKNOWLEDGMENT AGREEMENT, dated as of _____________, (the "Closing
Date"), between @, ("Owner"), and @, ("Servicer"), (together, the "Parties").
WITNESSETH:
WHEREAS, Owner has purchased certain mortgage loans [ON A SERVICING
RELEASED BASIS] [ON A SERVICING RETAINED BASIS] identified on Schedule I
attached hereto, (the "Mortgage Loans").
WHEREAS, the Owner desires to retain Servicer to service and provide
management and disposition services for the Mortgage Loans on behalf of the
Owner pursuant to the terms of that certain Amended and Restated Flow Servicing
Agreement by and between the Owner and the Servicer dated as March 1, 2006 (the
"Servicing Agreement");
NOW THEREFORE, for and in consideration of the mutual premises set forth
herein and other good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Unless otherwise amended by this Acknowledgment Agreement, all
provisions of the Servicing Agreement shall apply to the servicing of the
Mortgage Loans.
2. The Servicing Fee Rate with respect to the Mortgage Loans shall be @%.
3. The Cut-off Date with respect to the Mortgage Loans shall be _________,
20__.
4. Capitalized terms not otherwise defined herein shall have the meanings
assigned under the Servicing Agreement.
5. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, without regard to principals of conflicts of law
other than Section 5-1401 of the New York General Obligations Law which shall
govern.
6. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
[SIGNATURES APPEAR ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Acknowledgment
Agreement to be duly executed on their behalf by the undersigned, duly
authorized, as of the day and year first above written.
@.
OWNER
By:
------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.
SERVICER
By:
------------------------------------
Name:
Title:
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SCHEDULE I
EXHIBIT B
With respect to each Mortgage Loan, the Retained Mortgage File and
Custodial Mortgage 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 the Servicer in the Retained Mortgage File or Servicing
File or delivered to the Custodian pursuant to Sections 2.01 and 2.03 of the
Amended and Restated Flow Servicing Agreement to which this Exhibit is attached
(the "Agreement"):
WITH RESPECT TO EACH CUSTODIAL MORTGAGE FILE:
1. (a) The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of __________ without recourse" and signed
in the name of the Servicer by an authorized officer (in the event
that the Mortgage Loan was acquired by the Servicer in a merger, the
signature must be in the following form: "[Servicer], successor by
merger to [name of predecessor]"; and in the event that the Mortgage
Loan was acquired or originated by the Servicer while doing business
under another name, the signature must be in the following form:
"[Servicer], formerly known as [previous name]"); or
(b) If applicable, a certified copy of the Mortgage Note (endorsed as
provided above) together with a lost note affidavit, providing
indemnification to the holder thereof for any losses incurred due to
the fact that the original Mortgage Note is missing.
2. The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
3. The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording (except for the insertion of
the name of the assignee and recording information). The Assignment of
Mortgage must be duly recorded only if recordation is either necessary
under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located
or on direction of the Owner. If the Assignment of Mortgage is to be
recorded, the Mortgage shall be assigned to the Owner. If the
Assignment of Mortgage is not to be recorded, the Assignment of
Mortgage shall be delivered in blank. If the Mortgage Loan was
acquired by the Servicer in a merger, the Assignment of Mortgage must
be made by "[Servicer], successor by merger to [name of predecessor]."
If the Mortgage Loan was acquired or originated by the Servicer while
doing business under another name, the Assignment of Mortgage must be
by "[Servicer], 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. If the related Mortgage has been recorded in the name of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its
designee, no Assignment of Mortgage will be required to be prepared or
delivered and instead, the Servicer shall take all actions as are
necessary to cause the Owner to be shown as the owner of the related
Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by
MERS.
4. The original of any guarantee executed in connection with the Mortgage
Note.
5. Original or certified copy of power of attorney, if applicable.
WITH RESPECT TO EACH RETAINED MORTGAGE FILE:
6. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for recordation.
If in connection with any Mortgage Loan, the Servicer cannot deliver
or cause to be delivered the original Mortgage with evidence of
recording thereon on or prior to the Servicing Date because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or
because such public recording office retains the original recorded
Mortgage, the Servicer shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of the Company stating that such Mortgage has been
dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Servicer; 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 will be promptly delivered to the Custodian upon receipt
thereof by the Servicer.
For each MERS Mortgage Loan, the original Mortgage, noting the
presence of the MIN for that Mortgage Loan and either language
indicating that the Mortgage Loan was originated in the name of MERS,
or if the Mortgage Loan was not originated in the name of MERS, the
original Mortgage and the assignment to MERS, with evidence of
recording thereon. Further, with respect to MERS Mortgage Loans, (a)
the Mortgage names MERS as the Mortgagee and (b) the requirements set
forth in the Electronic Tracking Agreement have been satisfied, with a
conformed recorded copy to follow as soon as the same is received by
the Servicer.
7. For any Mortgage Loan not recorded in the name of MERS, originals or
certified true copies of documents sent for recordation of all
intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Servicer shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Company stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that the 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 tht issued the title policy
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Servicer; 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 will be promptly delivered to the
Custodian upon receipt thereof by the Servicer.
8. The electronic form of PMI Policy as identified by certificate number.
9. The original mortgagee policy of title insurance or other evidence of
title such as a copy of the title commitment or copy of the
preliminary title commitment.
10. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
11. For each Cooperative Loan, the original or a seller certified true
copy of the following:
The original Pledge Agreement entered into by the Mortgagor with
respect to such Cooperative Loan;
UCC-3 assignment in blank (or equivalent instrument), sufficient under
the laws of the jurisdiction where the related Cooperative Apartment
is located to reflect of record the sale and assignment of the
Cooperative Loan to the Owner;
Original assignment of Pledge Agreement in blank showing a complete
chain of assignment from the originator of the related Cooperative
Loan to the Servicer;
Original Form UCC-1 and any continuation statements with evidence of
filing thereon with respect to such Cooperative Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Original Proprietary Lease;
Original Assignment of Proprietary Lease, in blank, and all
intervening assignments thereof;
Original recognition agreement of the interests of the mortgagee with
respect to the Cooperative Loan by the Cooperative, the stock of which
was pledged by the related Mortgagor to the originator of such
Cooperative Loan; and
Originals of any assumption, consolidation or modification agreements
relating to any of the items specified above.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Servicer or in the
possession of the Servicer's agent(s):
12. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
13. Residential loan application.
14. Mortgage Loan closing statement.
15. Verification of employment and income, unless originated under the
Servicer's Limited Documentation program, Xxxxxx Mae Timesaver Plus.
16. Verification of acceptable evidence of source and amount of down
payment, including any related asset verification, if applicable.
17. Credit report on the Mortgagor.
18. Residential appraisal report, including the related completion
certificate, if applicable.
19. Photograph of the Mortgaged Property.
20. Survey of the Mortgage property, if required by the title company or
applicable law.
21. 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.
22. All required disclosure statements.
23. If available, termite report, structural engineer's report, water
potability and septic certification.
24. Sales contract, if applicable.
25. Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage
Loan.
26. Amortization schedule, if available.
27. Payment history for any Mortgage Loan that has been closed for more
than 90 days.
28. Original power of attorney, if applicable.
In the event an Officer's Certificate of the Servicer is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Servicer shall deliver to the Custodian, within 240
days of the Servicing Date, an Officer's Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation, and
(iv) specify the date the applicable recorded document will be delivered to the
Custodian. The Servicer shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested from the Purchaser, which
consent shall not be unreasonably withheld.
EXHIBIT C
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
APPLICABLE INAPPLICABLE
SERVICING SERVICING
REG AB REFERENCE SERVICING CRITERIA CRITERIA CRITERIA
---------------- ------------------------------------------------------------------------------------- ---------- ------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any performance or other triggers X
and events of default in accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third parties, policies and X
procedures are instituted to monitor the third party's performance and compliance
with such servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a back-up servicer for the X
mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the party X
participating in the servicing function throughout the reporting period in the amount
of coverage required by and otherwise in accordance with the terms of the transaction
agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate custodial bank accounts X
and related bank clearing accounts no more than two business days following receipt,
or such other number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor or to an investor are X
made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or distributions, X
and any interest or other fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve accounts or accounts X
established as a form of overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured depository institution as X
set forth in the transaction agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign financial institution means
a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of
the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed securities X
related bank accounts, including custodial accounts and related bank clearing
accounts. These reconciliations are (A) mathematically accurate; (B) prepared within
30 calendar days after the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved by someone other
than the person who prepared the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the Commission, are maintained X
in accordance with the transaction agreements and applicable Commission requirements.
Specifically, such reports (A)
are prepared in accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated in accordance with the
terms specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of mortgage loans
serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance with timeframes, X
distribution priority and other terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two business days to the X
Servicer's investor records, or such other number of days specified in the
transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree with cancelled checks, X
or other form of payment, or custodial bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as required by the transaction X
agreements or related mortgage loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as required by the transaction X
agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, reviewed and X
approved in accordance with any conditions or requirements in the transaction
agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in accordance with the X
related mortgage loan documents are posted to the Servicer's obligor records
maintained no more than two business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to principal, interest or
other items (e.g., escrow) in accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with the Servicer's records X
with respect to an obligor's unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's mortgage loans (e.g., X
loan modifications or re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds X
in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or other requirements
established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during the period a mortgage X
loan is delinquent in accordance with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage loans with variable X
rates are computed based on the related mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such X
funds are analyzed, in accordance with the obligor's mortgage loan documents, on at
least an annual basis, or such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C) such funds are returned to
the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number of days specified in
the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or insurance payments) are made on X
or before the related penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such support has been received by
the servicer at least 30 calendar days prior to these dates, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be made on behalf of an X
obligor are paid from the Servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two business days to the X
obligor's records maintained by the servicer, or such other number of days specified
in the transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in X
accordance with the transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item 1114(a)(1) through (3) X
or Item 1115 of Regulation AB, is maintained as set forth in the transaction
agreements.
EXHIBIT D
FORM OF SARBANES CERTIFICATION
Re: The [_] agreement dated as of [_], 200[_] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Owner], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Servicer during 200[_] that were delivered by the
Servicer to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Servicer Servicing
Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicer Servicing
Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the Servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the Compliance Statement, the Servicing Assessment or the Attestation
Report, the Servicer has fulfilled its obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by each Subservicer and
Subcontractor pursuant to the Agreement have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT E
[RESERVED]
EXHIBIT F
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
___________________, 20__ between _________________, a _________________
corporation having an office at _________________ ("Assignor") and
_________________, having an office at _________________ ("Assignee"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of the
right, title and interest of Assignor, as Owner, in, to and under that certain
Master Mortgage Loan Purchase Agreement and the Servicing Agreement, (the
"Servicing Agreement"), each dated as of _________________, by and between
_________________ (the "Owner"), and _________________ (the "Servicer"), and the
Mortgage Loans delivered thereunder by the Servicer to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Servicer, the Owner and _________________
(the "Custodian").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Servicer with
respect to the Servicing Agreement or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Servicing Agreement, the
Custodial Agreement or the Mortgage Loans, including without limitation the
transfer of the servicing obligations under the Servicing Agreement. The
Assignor has no knowledge of, and has not received notice of, any waivers under
or amendments or other modifications of, or assignments of rights or obligations
under, the Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the Securities Act of 1933
(the "33 Act") or which would render
the disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Servicer pursuant to Section 12.10 of the Servicing Agreement
that:
a. The Assignee agrees to be bound, as Owner, by all of the terms,
covenants and conditions of the Servicing Agreement, the Mortgage Loans and the
Custodial Agreement, and from and after the date hereof;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The Assignee is acquiring the Mortgage Loans for investment for its
own account only and not for any other person. In this connection, neither the
Assignee nor any person authorized to act therefor has offered to sell the
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of US Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
d. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
e. The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Servicer;
f. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Servicing Agreements is:
______________________________________
______________________________________
______________________________________
Attention: ___________________________
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Servicing Agreement is:
______________________________________
______________________________________
______________________________________
Attention: ___________________________
4. From and after the date hereof, the Servicer shall note the transfer of
the Mortgage Loans to the Assignee in its books and records, the Servicer shall
recognize the Assignee as the owner of the Mortgage Loans and the Servicer shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Servicing Agreement, the terms of which are incorporated herein by reference. It
is the intention of the Assignor, the Servicer and the Assignee that the
Servicing Agreement shall be binding upon and inure to the benefit of the
Servicer and the Assignee and their respective successors and assigns.
[Signatures Follow]
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption and
Recognition Agreement to be executed by their duly authorized officers as of the
date first above written.
------------------------------------ ---------------------------------------
Assignor Assignee
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Its: Its:
-------------------------------- -----------------------------------
Tax Payer Identification No.: Tax Payer Identification No.:
------------------------------------- ---------------------------------------
EXHIBIT G
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Xxxxx Fargo Bank, N.A.
Mortgage Loan [Series/Pool] @
Dear Sir/Madam:
I am @ of Xxxxx Fargo Bank, N.A. and have acted as counsel to Xxxxx Fargo Bank,
N.A. (the "Servicer"), with respect to certain matters in connection with the
servicing by the Servicer of the mortgage loans (the "Mortgage Loans") pursuant
to that certain Flow Servicing Agreement by and between the Servicer and
Citigroup Global Markets Realty Corp. (the "Owner"), dated as of March 1, 2006,
(the "Servicing Agreement"). Capitalized terms not otherwise defined herein have
the meanings set forth in the Servicing Agreement.
I have examined the following documents:
1. the Servicing Agreement;
2. the Commitment Letter; and
3. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion (collectively with the Servicing
Agreement and Commitment Letter, the "Agreements").
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Servicer contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that:
1. The Servicer is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Servicer has the power to engage in the transactions contemplated by
the Agreements and all requisite power, authority and legal right to
execute and deliver the Agreements and to perform and observe the terms and
conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Servicer, signed
(a) the Agreements, by and between the Servicer and the Owner, and (b) any
other document delivered prior hereto or on the date hereof in connection
with the servicing of the Mortgage Loans in accordance with the Agreements
was, at the respective times of such signing and delivery, and is, as of
the date hereof, duly elected or appointed, qualified and acting as such
officer or attorney-in-fact, and the signatures of such persons appearing
on such documents are their genuine signatures.
4. Each of the Agreements has been duly authorized, executed and delivered by
the Servicer and is a legal, valid and binding agreement enforceable in
accordance with its terms, subject to the effect of insolvency,
liquidation, conservatorship and other similar laws administered by the
Federal Deposit Insurance Corporation affecting the enforcement of contract
obligations of insured banks and subject to the application of the rules of
equity, including those respecting the availability of specific
performance, none of which will materially interfere with the realization
of the benefits provided thereunder.
5. The Servicer has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in order
to complete the transactions contemplated by the Agreements and in order to
execute the endorsements to the Mortgage Notes and the assignments of the
Mortgages, and the original or facsimile signature of the officer at the
Servicer executing the Agreements and the assignments of the Mortgages
represents the legal and valid signature of said officer of the Servicer.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with the
Agreements or the consummation of the transactions contemplated by the
Agreements; or (ii) any required consent, approval, authorization or order
has been obtained by the Servicer.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements, will conflict with or results
in or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Servicer, the terms of any
indenture or other agreement or instrument to which the Servicer is a party
or by which it is bound or to which it is subject, or violates any statute
or order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Servicer is subject
or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Servicer which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or assets of the Servicer or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as
now conducted or in any material liability on the part of the Servicer or
which would draw into question the validity of the Agreements, or of any
action taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair materially the
ability of the Servicer to perform under the terms of the Agreements.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested to
the legal department of the Servicer or an employee of the Servicer
responsible for the receipt of process a present intention to initiate such
proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
@
@
@/@
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
August 28, 2006
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (the "AAR
Agreement"), dated August 28, 2006 is among Citigroup Global Markets Realty
Corp., having an office at 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000
("Assignor"), Xxxxxxxxx Mortgage Home Loans Inc., having an office at 000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx 00000 ("Assignee") and Xxxxx
Fargo Bank, N.A., having an office at 1 Home Campus, Des Moines, Iowa 50328 (the
"Servicer"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. Assignment. The Assignor hereby grants, transfers and assigns to
Assignee (a) all of the right, title and interest of Assignor in and to the
mortgage loans (the "Mortgage Loans") listed on Exhibit A hereto, which (i) were
purchased by Assignor, as Purchaser, from the Servicer, as the Seller, pursuant
to that certain Assignment and Conveyance Agreement (06-W58), dated as of July
25, 2006, and that certain Amended and Restated Master Mortgage Loan Purchase
Agreement, dated as of March 1, 2006, by and between Assignor and the Servicer,
as the Seller, (collectively, the "Purchase Agreement"), and (ii) are being
serviced by the Servicer on behalf of Assignor, as Owner, pursuant to that
certain Assignment and Conveyance Agreement (06-W58), dated as of July 25, 2006,
and that certain Amended and Restated Flow Servicing Agreement, as amended by
the First Amendment to the Amended and Restated Flow Servicing Agreement, dated
August 1, 2006 (collectively, the "Servicing Agreement" and together with the
Purchase Agreement, the "Agreements"), dated as of March 1, 2006, by and between
Assignor and the Servicer, and (b) with respect to the Mortgage Loans, all of
its right, title and interest in, to and under the Agreements. Capitalized terms
used herein but not defined shall have the meanings ascribed to them in the
Agreements.
2. Representations and Warranties of the Assignor. The Assignor
warrants and represents to, and covenants with, the Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Servicer with
respect to the Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Agreements or the Mortgage
Loans, including without limitation the transfer of the servicing obligations
under the Servicing Agreement. The Assignor has no knowledge of, and has not
received notice of, any waivers
under or amendments or other modifications of, or assignments of rights or
obligations under, the Agreements or the Mortgage Loans;
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the Securities Act
of 1933 (the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration pursuant
thereto;
e. The representations and warranties set forth in Section 6 of
the Purchase Agreement, as amended in this AAR Agreement are true and correct
for the period from, but not including, the related Closing Date as defined in
the Purchase Agreement, to and including the date hereof (the "Holding Period"),
and are incorporated herein by reference;
f. The information set forth on Exhibit A is complete, true and
correct as of the date hereof;
g. Attached hereto as Exhibit B are true and correct copies of
the Purchase Agreement and the Servicing Agreement, which Agreements are in full
force and effect as of the date hereof;
h. The Assignor has received from the Servicer, as Seller, and
has delivered to the Assignee, each Custodial Mortgage File, as defined in the
Agreements;
i. No Mortgaged Property is used for commercial purposes or is a
mixed-use property;
j. No Adjustable Rate Mortgage Loan contains a provision
permitting or requiring conversion to a fixed interest rate Mortgage Loan;
k. No Mortgage Loan is a Pledged Asset Mortgage Loan;
l. All of the Mortgage Loans are Owned Mortgage Loans; and
m. There is no pending action or proceeding directly involving
any Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Assignor's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation constituting a prerequisite to use and enjoyment of said
property;
3. Remedies. In the event that the Assignee, the Assignor or the
Company discovers a breach of a representation or warranty contained in this AAR
Agreement with respect to a Mortgage Loan which materially and adversely affects
the value of such Mortgage Loan or
-2-
the interest of the Assignee therein, the party discovering such breach shall
give prompt written notice to the other parties hereto, and the Assignor shall
have ninety (90) days following the discovery or receipt of notice of such
breach in which to cure such breach or repurchase the affected Mortgage Loan. If
the Assignor is unable to cure such breach within such ninety (90) day period,
then the Assignor shall within thirty (30) days repurchase each affected
Mortgage Loan at the Repurchase Price (as defined below). For purposes of making
certain representations and warranties contemplated in this section, each
reference in Section 6 of the Purchase Agreement (i) to the "Cut-off Date" shall
be deemed to be a reference to August 1, 2006, and (ii) to the "Mortgage Loan
Schedule" shall be deemed to be a reference to Exhibit A attached hereto.
Notwithstanding the foregoing, any notice of a breach of Section 2(m)
above shall be given by the party discovering such breach to the other no later
than twenty (20) Business Days following such discovery. To the extent the
Assignee or the Company discovers a breach of Section 2(m) above and fails to
provide such notice to the Assignor within twenty (20) Business Days following
discovery of such breach to the address and in the manner set forth in Section
16 of this AAR Agreement, the Assignor shall have no obligation to cure such
breach or repurchase such Mortgage Loan. In addition, if the Assignor, Assignee
or the Company discovers a breach of Section 2(m) above, the Assignee covenants
and agrees that it shall direct the Company to refrain from any foreclosure
action or proceeding with respect to the related Mortgage Loan, and the Company
agrees that it shall not foreclose on such Mortgage Loan. Furthermore, the
Servicer's obligation to make Monthly Advances on such Mortgage Loan shall
terminate as of the date of receiving such directive from the Assignee.
The "Repurchase Price" with respect to any affected Mortgage Loan
repurchased by the Assignor shall be an amount equal to (A) the Stated Principal
Balance of such affected Mortgage Loan as of the date of such repurchase, plus
(B) accrued and unpaid interest at the Mortgage Loan Remittance Rate on such
affected Mortgage Loan to but not including the date of such repurchase, less
amounts received in respect of such repurchased Mortgage Loan. The Repurchase
Price shall be paid by the Assignor by wire transfer to the Assignee to an
account designated by the Assignee.
Contemporaneously with the Assignor's repurchase of an affected
Mortgage Loan (each, a "Repurchased Mortgage Loan") from the Assignee as set
forth above, the Assignee shall reconvey such Repurchased Mortgage Loan to the
Assignor by delivering to the Assignor or the Assignor's designee, the mortgage
note endorsed in blank, the mortgage, the assignment of mortgage in blank and
such other documents delivered to the Assignee in connection with the Assignee's
purchase thereof, and by executing a mutually acceptable assignment and
assumption agreement, conveying the Assignee's rights to such Repurchased
Mortgage Loan and any related rights under the Agreements to which such Mortgage
Loan is subject and under this AAR Agreement. In the event of a repurchase, the
Servicer shall service for the Assignor such Repurchased Mortgage Loan in
accordance with the terms of the Servicing Agreement from the date of the
repurchase.
4. Representations and Warranties of the Assignee. The Assignee
warrants and represent to, and covenants with, the Assignor and the Servicer
pursuant to Section 12.10 of the Servicing Agreement that:
-3-
a. The Assignee agrees to be bound, as Owner, by all of the
terms, covenants and conditions of the Agreements and the Mortgage Loans, from
and after the date hereof;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this connection,
neither the Assignee nor any person authorized to act therefor has offered to
sell the Mortgage Loans by means of any general advertising or general
solicitation within the meaning of Rule 502(c) of US Securities and Exchange
Commission Regulation D, promulgated under the 1933 Act;
d. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
e. The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor or the Servicer;
f. The Assignee has executed and delivered to the Servicer on or
prior to the date hereof the Servicing Control Agreement in the form attached
hereto as Exhibit C;
5. Recognition of Assignee. From and after the date hereof, the
Servicer shall note the transfer of the Mortgage Loans to the Assignee in its
books and records, the Servicer shall recognize the Assignee as the owner of the
Mortgage Loans and the Servicer shall service the Mortgage Loans for the benefit
of the Assignee pursuant to the Servicing Agreement, as amended herein, the
terms of which are incorporated herein by reference. It is the intention of the
Assignor, the Servicer and the Assignee that the Agreements shall be binding
upon and inure to the benefit of the Servicer and the Assignee and their
respective successors and assigns.
6. Representations and Warranties of the Servicer.
a. The Servicer makes the representations and warranties set
forth in Section 3.01 of the Servicing Agreement as of the date hereof.
b. The Servicer has executed and delivered to the Assignee on or
prior to the date hereof the Servicing Control Agreement in the form attached
hereto as Exhibit C.
7. The Servicer, as Seller, and the Assignee hereby agree that the
Purchase Agreement is amended as follows:
a. Section 5(d) entitled "Delivery of Mortgage Loan Documents" is
amended to add the following paragraph:
-4-
"If the original or a copy of any document submitted for recordation
to the appropriate public recording office is not so delivered to the
Custodian or the Servicer to be included in the Retained Mortgage File
within 240 days following the related Closing Date, and if the Seller
does not cure such failure within thirty (30) days after receipt of
written notification of such failure from the Purchaser, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased
by the Seller at a price and in the manner specified in Section 4
hereof."
b. Section 6(b) (Representations, Warranties and Agreements of
Seller) is hereby amended as follows:
(1) Section 6(b)(xix) (No Mechanic's Liens) is modified by
deleting "(q)" and replacing it with "(xvii)."
(2) Section 6(b)(xlii) (Due on Sale) is modified to delete
the following:
"provided that, with respect to Mortgage Notes which bear an
adjustable rate of interest, such provision shall not be enforceable
if the Mortgagor causes to be submitted to the Seller to evaluate the
intended transferee as if a new Mortgage Loan were being made to such
transferee, and the Seller reasonably determines that the security
will not be impaired by such Mortgage Loan assumption and that the
risk of breach of any covenant or agreement in such Mortgage is
acceptable to the Purchaser."
(3) Section 6(b)(xliii) (Credit Reporting) is modified to
delete the word "Seller" in the third line and replace it with the word
"Company."
8. The Servicer and the Assignee agree that the Servicing Agreement is
amended as follows:
a. Article I (Definitions) is modified as follows:
(1) The defined term "Appraised Value" is modified to read
as follows:
"Appraised Value: With respect to any Mortgage Loan, the lesser of (i)
the value set forth on the appraisal made in connection with the
origination of the related Mortgage Loan as the value of the related
Mortgaged Property, or (ii) the purchase price paid for the Mortgaged
Property; provided, however, that in the case of a refinanced Mortgage
Loan, such value shall be based solely on the appraisal made in
connection with the origination of such Mortgage Loan."
-5-
(2) The defined term "Repurchase Price" is modified to read
as follows:
"Repurchase Price: A price equal to (i) the Stated Principal Balance
of the Mortgage Loan plus (ii) interest on such Stated Principal
Balance at the Mortgage Loan Remittance Rate from the date on which
interest has last been paid and distributed to the Owner 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 are
being held in the Custodial Account for distribution on the next
scheduled Remittance Date."
(3) The defined term "Servicing Advances" is modified to
delete the phrase "on Serviced-owned Mortgage Loans" at the end of the
definition and replace it with the phrase "on Owned Mortgage Loans.".
b. Section 2.01 (Possession of Mortgage Files; Maintenance of
Servicing Files) is modified by adding the following phrase at the end of the
last sentence:
"unless such release, transfer or delivery is in connection with a
repurchase of the Mortgage Loan, in which case the costs shall be paid
by the Servicer."
c. Section 4.01 (Company to Act as Servicer) is hereby amended by
deleting the words "three (3)" in the second paragraph and replacing them with
"five (5)".
d. Section 4.01 (Company to Act as Servicer) is hereby amended by
adding the phrase "In the event that no default exists or is imminent" at the
beginning of the third sentence in the second paragraph.
e. Section 4.02 (Liquidation of Mortgage Loans) is hereby amended
by deleting from the second sentence of the first paragraph "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 three (3) Business Days after receiving such notice."
f. Section 4.04 (Establishment of and Deposits to Custodial
Account) is hereby amended by deleting from the first sentence of the second
paragraph the phrase "The Servicer shall deposit in the Custodial Account within
one (1) Business Day of Servicer's receipt," and replacing it with "The Servicer
shall deposit in the Custodial Account within two (2) Business Days of
Servicer's receipt."
g. Section 4.06 (Establishment of and Deposits to Escrow Account)
is hereby amended by deleting from the first sentence of the second paragraph
the phrase "The Servicer shall deposit in the Custodial Account within one (1)
Business Day of Servicer's receipt." and replacing it with "The Servicer shall
deposit in the Custodial Account within two (2) Business Days of Servicer's
receipt."
-6-
h. Section 4.10 (Maintenance of Hazard Insurance) is modified in
the first paragraph by deleting the phrase "Flood Emergency Management Agency"
and replacing it with the phrase " Federal Emergency Management Agency."
i. Section 4.16 (Title, Management and Disposition of REO
Property) is modified as follows:
(1) by adding the following sentence after the first
sentence of the fifth paragraph:
"Notwithstanding any other provision in this Section 4.16, no REO
Property shall be marketed for less than the Appraised Value of the
related Mortgaged Property without the prior consent of the Purchaser,
and no REO Property shall be sold for less than ninety percent (90%)
of its Appraised Value without the prior written consent of the
Owner."
(2) by adding the following as the last paragraph:
"The Owner shall have the option to manage and operate the REO
Property provided the Owner gives written notice of its intention to
do so within thirty (30) days after such REO Property is acquired in
foreclosure or by deed in lieu of foreclosure. The election by the
Owner to manage the REO Property shall not constitute a termination of
any rights of the Owner pursuant to Section 11.02."
j. Section 5.01 (Remittances) is modified, in the second
paragraph, as follows:
(1) delete the phrase "the second Business Day following" in
the first and second line; and
(2) delete the word "second" in the seventh line.
k. Section 5.02 (Statements to Purchaser) is hereby amended by
replacing the language with the following:
"Not later than the tenth (10th) calendar day of each month (or if
such tenth (10th) day is not a Business Day, the first Business Day
immediately preceding such tenth (10th) day), the Servicer shall
furnish reports in the electronic format attached hereto as Exhibit D
of the AAR Agreement, or such other format mutually agreed to by the
Servicer and the Owner or any master servicer, with a listing of the
outstanding Mortgage Loans to include, among other things, the
Mortgage Loan number, the scheduled balance, the scheduled
paid-through dates, the Mortgage Interest Rate and principal and
interest payment, and shall furnish to the Owner a Monthly Remittance
Advice, with a trial balance report attached
-7-
thereto as to the period ending on the last day of the preceding
month."
l. Section 6.02 (Satisfaction of Mortgages and Release of
Retained Mortgage Files) is hereby amended by adding to first sentence of the
second paragraph after the words "serviced by the Mortgage" "(other than as a
result of a modification of the Mortgage pursuant to this Agreement or a
liquidation of the Mortgaged Property pursuant to the terms of this Agreement)."
m. Section 7.01 (Provision of Information) is modified to add the
following at the end of the first paragraph:
"In addition, during the term of this Agreement, the Servicer shall
provide to the any regulatory authority having jurisdiction over the
Owner or supervising the Owner or any of Owner's assigns (including
beneficial owners of securities issued in Securitization Transactions
backed by the Mortgage Loans) and the examiners and supervisory agents
of the regulatory authorities, access to the documentation required by
applicable regulations of such authorities with respect to the
Mortgage Loans. Such access shall be afforded without charge, but only
upon reasonable and prior written request and during normal business
hours at the offices designated by the Servicer."
n. Section 8.03 (Limitation on Liability of Servicer and Others)
is modified to add the following at the end of the last sentence:
", unless any such costs result from a breach of the Servicer's
representations and warranties made herein or its failure to perform
its obligations in strict compliance with this Agreement."
o. Section 10.01 (Events of Default) is hereby amended by adding
the phrase ", except as otherwise provided in Section 6.07," following the words
"thirty (30) days," in Section 10.01(ii).
p. Section 11.01 (Termination) is modified by adding the
following sentence to the end of the paragraph:
"The representations and warranties and indemnification provisions
contained herein shall survive the termination of this Agreement."
q. Exhibit B (Contents of Each Custodial Mortgage File, Retained
Mortgage File and Servicing File) is hereby amended by the following:
(1) in number 9, adding the phrase "(or in the case of any
Mortgage Loan secured by a Mortgaged Property located in a jurisdiction where
such policies are generally not available, an opinion of counsel of the type
customarily rendered in such
-8-
jurisdiction in lieu of title insurance)" after the words "title insurance" in
the first line and deleting "other evidence of title such as a copy of the title
commitment or copy of the preliminary title commitment."
9. Costs. Each party will pay any commissions, fees and expenses,
including attorney's fees, it has incurred and the Assignor shall pay the fees
of its attorneys and the reasonable fees of the attorneys of the Assignee in
connection with the negotiations for, documenting of and closing of the
transactions contemplated by this AAR Agreement.
10. Governing Law. This AAR Agreement shall be construed in accordance
with the laws of the State of New York, without regard to conflicts of law
principles (other than Sections 5-1401 and 5-1402 of the General Obligations
Law, which shall govern), and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
11. Waiver. No term or provision of this AAR Agreement may be waived
or modified unless such waiver or modification is in writing and signed by the
party against whom such waiver or modification is sought to be enforced.
12. Successors and Assigns. This AAR Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. Any entity into
which Assignor, Assignee or Servicer may be merged or consolidated shall,
without the requirement for any further writing, be deemed Assignor, Assignee or
Servicer, respectively, hereunder.
13. Counterparts. This AAR Agreement may be executed simultaneously in
any number of counterparts. Each counterpart shall be deemed to be an original
and all such counterparts shall constitute one and the same instrument.
14. Waiver of Jury Trial. To the fullest extent permitted under
applicable law, each party hereto hereby irrevocably waives all right to a trial
by jury in any action, proceeding or counterclaim arising out of or relating to
this AAR Agreement.
15. The contact information for the Assignee's document custodian is:
La Salle Bank, National Association
0000 Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, Operations Manager
Telephone: 000-000-0000
Fax: 000-000-0000
Email: Xxxxx.xxxxxxxx@xxxxxxx.xxx
16. Notices. All demands, notices and communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address as follows:
a. if to the Assignor:
-9-
Citigroup Global Markets Realty Corp.
000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx
b. if to the Assignee:
Xxxxxxxxx Mortgage Home Loans Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
c. if to the Company:
Xxxxx Fargo Bank, N.A.
1 Home Campus
MAC X0000-000
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxx
and
Xxxxx Fargo Bank, N.A.
1 Home Campus
MAC X2401-06T
Xxx Xxxxxx, Xxxx 00000
Attention: General Counsel
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); provided that any notice to the Assignor
pursuant to the second paragraph of Section 3 shall be given certified mail
addressed to Xxxxx Xxxxxxx, Mortgage Finance, Surveillance Department Citigroup
Global Markets Inc., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
[Signatures Follow]
-10-
IN WITNESS WHEREOF, the parties have caused this AAR Agreement to be executed by
their duly authorized officers as of the date first above written.
CITIGROUP GLOBAL MARKETS REALTY CORP. XXXXXXXXX MORTGAGE HOME LOANS INC.
Assignor Assignee
By: /s/ Xxx Xxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- ------------------------------------
Name: Xxx Xxxxx Name: Xxxxxxx X. Xxxxx
Its: Its: Senior Vice President
--------------------------------
XXXXX FARGO BANK, N.A.
Servicer
By: /s/ Xxxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxxx X. Xxxx
-------------------------------
Its: Assistant Vice President
--------------------------------
Xxxxx Fargo Home Mortgage
-11-
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(delivered to the Assignee in an electronic format)
A-1
EXHIBIT B
PURCHASE AGREEMENT AND SERVICING AGREEMENT
B-1
EXHIBIT C
SERVICING CONTROL AGREEMENT
Xxxxxxxxx Mortgage Home Loans, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xx, Xxx Xxxxxx 00000
_______________, 2006
[SERVICER]
[ADDRESS]
Re: Servicing Control Agreement
Gentlemen:
__________ ("Servicer") is servicing certain mortgage loans (the
"Mortgage Loans") for Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx") pursuant
to that certain [servicing agreement (the "Servicing Agreement") [dated
________, 200_] between the Servicer and Xxxxxxxxx]. Xxxxxxxxx obtains financing
from various lenders (each, as further defined below, a "Lender" and
individually and collectively, the "Lenders"), secured by the Mortgage Loans and
related assets, including proceeds thereof (collectively, the "Collateral").
This letter agreement confirms the agreement among the Servicer, Xxxxxxxxx and
the Lenders as to the matters set forth herein.
Servicer may be notified from time to time of the identity of Lenders
by delivery to Servicer of a Lender Notice in the form of Annex 1 attached
hereto, and upon delivery of such Lender Notice to Servicer the lender
identified in such Lender Notice shall be a Lender hereunder entitled to all of
the rights and benefits hereof, until such time as a Lender Termination Notice
in the form of Annex 2 executed by the Lender shall have been delivered to
Servicer with respect to such Lender. Servicer agrees to acknowledge receipt of
each Lender Notice and Lender Termination Notice by executing such Lender Notice
or Lender Termination Notice, as applicable, and delivering it to the applicable
Lender, with a copy to Xxxxxxxxx.
Servicer acknowledges that the Collateral may include Xxxxxxxxx'x
right, title and interest in, to and under the Servicing Agreement, and that
upon an event of default under the applicable financing arrangements, the
applicable Lender shall be entitled to exercise and enforce Xxxxxxxxx'x rights
under the Servicing Agreement, including termination thereof to the extent
provided in the Servicing Agreement. Xxxxxxxxx agrees to pay all termination
fees or other amounts due to Servicer in connection with any termination of the
Servicing Agreement and transfer of the servicing by Lender.
Servicer further agrees that, unless otherwise agreed in writing by
Xxxxxxxxx and all of the Lenders, Servicer shall remit all amounts collected on
account of the Mortgage Loans,
C-1
after deduction of amounts which Servicer is entitled to retain in accordance
with the Servicing Agreement, solely to the following account(s):
(a) with respect to Mortgage Loans that are master serviced by
Xxxxx Fargo as master servicer, to the account specified by such master servicer
for such purposes; and
(b) in all other cases, to the following account:
ABA # 000000000
LaSalle CHGO/CTR/BNF:/LaSalle Trust
Account No. 0000000
Attn: Xxxx Xxxxx
(000) 000-0000
The provisions of the letter agreement shall apply to each Mortgage
Loan from the time Servicer commences servicing of such Mortgage Loan pursuant
to the Servicing Agreement until Servicer has received a Loan Termination Notice
in the form of Annex 3 attached hereto executed by the Lender relating to such
Mortgage Loan.
Xxxxxxxxx shall indemnify and hold the Servicer harmless for any and
all claims asserted against it for any actions taken in good faith by the
Servicer in accordance with this agreement.
Notices or other communications hereunder shall be given or made in
writing (including without limitation by email, telex or telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or in the applicable Lender Notice; or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice, upon
receipt.
No provision of this letter agreement may be modified, amended or
revoked without the prior written consent of Xxxxxxxxx and each Lender.
This letter agreement shall not be assignable by any party without the
prior written consent of the other parties, shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns, and
shall be governed by and construed in accordance with the internal laws of the
State of New York without reference to principles of conflicts of laws.
C-2
Please acknowledge acceptance and agreement to the foregoing by
signing and returning the enclosed copy of this letter.
Very truly yours,
XXXXXXXXX MORTGAGE HOME LOANS,
INC.
By
-------------------------------------
Name
-----------------------------------
Title
----------------------------------
Address for Notices:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xx, Xxx Xxxxxx 00000
Attention: Xen Stanhope
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Attention: Xxxx Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
ACCEPTED AND AGREED TO:
[SERVICER]
By
----------------------------------
Name:
Title:
Address for Notices:
Attention:
Telecopier:
Telephone:
X-0
XXXXX 0
XXXXXX XXXXXX
Xxxxxxxxx:
You are hereby notified that the undersigned is a Lender as defined
in, and subject to the rights and benefits of, the Servicing Control Agreement
between Xxxxxxxxx Mortgage Home Loans, Inc. and the Servicer identified below.
Please acknowledge receipt of this Lender Notice by executing a copy
hereof as provided below and delivering it to Lender, with a copy to Xxxxxxxxx.
XXXXXXXXX MORTGAGE HOME
LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER]
By:
------------------------------------
Name:
Title:
Address for Notices:
________________________________________
________________________________________
________________________________________
Attention:
Telecopier:
Telephone:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
---------------------------------
Name:
Title:
X-0
XXXXX 0
XXXXXX XXXXXXXXXXX NOTICE
To: [SERVICER]
Re: Letter Agreement dated ___________, 2006 between _____________
("Servicer"), Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx")
and the Lenders from time to time party thereto (the "Servicing
Control Agreement")
Gentlemen:
You are hereby notified that the undersigned Lender is no longer a
Lender as defined in the above referenced Servicing Control Agreement.
Please acknowledge receipt of this Lender Termination Notice by
executing a copy hereof as provided below and delivering it to the undersigned,
with a copy to Xxxxxxxxx.
XXXXXXXXX MORTGAGE HOME LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER]
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
---------------------------------
Name:
Title:
X-0
XXXXX 0
XXXX XXXXXXXXXXX NOTICE
To: [SERVICER]
Re: Letter Agreement dated ___________, 2006 between _____________
("Servicer"), Xxxxxxxxx Mortgage Home Loans, Inc. ("Xxxxxxxxx")
and the Lenders from time to time party thereto (the "Servicing
Control Agreement")
Gentlemen:
You are hereby instructed, effective on _____________ (the "Servicing
Transfer Date"), to service the Mortgage Loans listed on Exhibit A attached
hereto to _______________.
From and after the Servicing Transfer Date, the Mortgage Loans listed
on Exhibit A shall no longer be subject to the provisions of the Servicing
Control Agreement.
XXXXXXXXX MORTGAGE HOME LOANS, INC.
By:
------------------------------------
Name:
Title:
[LENDER 1]
By:
------------------------------------
Name:
Title:
[LENDER 2]
By:
------------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED:
[SERVICER]
By:
---------------------------------
Name:
Title:
C-6
EXHIBIT D
REPORTING FORMATS
Standard File Layout - Master Servicing
Column Name Description Decimal Format Comment Max Size
---------------------- ---------------------------------------------------- ------- ------------------------- --------
SER_INVESTOR_NBR A value assigned by the Servicer to define a group Text up to 10 digits 20
of loans.
LOAN_NBR A unique identifier assigned to each loan by the Text up to 10 digits 10
investor.
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer. Text up to 10 digits 10
This may be different than the LOAN_NBR.
BORROWER_NAME The borrower name as received in the file. It is Maximum length of 30 30
not separated by first and last name. (Last, First)
SCHED_PAY_AMT Scheduled monthly principal and scheduled interest 2 No commas(,) or dollar 11
payment that a borrower is expected to pay, P&I signs ($)
constant.
NOTE_INT_RATE The loan interest rate as reported by the Servicer. 4 Max length of 6 6
NET_INT_RATE The loan gross interest rate less the service fee 4 Max length of 6 6
rate as reported by the Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as reported by 4 Max length of 6 6
the Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as reported by 2 No commas(,) or dollar 11
the Servicer. signs ($)
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6 6
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6 6
forecasted rate.
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar 11
beginning of the processing cycle. signs ($)
ACTL_END_PRIN_BAL The borrower's actual principal balance at the end 2 No commas(,) or dollar 11
of the processing cycle. signs ($)
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that the MM/DD/YYYY 10
borrower's next payment is due to the Servicer, as
reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_1 The curtailment interest on the first curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_2 The curtailment interest on the second curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar 11
signs ($)
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_AMT_3 The curtailment interest on the third curtailment 2 No commas(,) or dollar 11
amount, if applicable. signs ($)
PIF_AMT The loan "paid in full" amount as reported by the 2 No commas(,) or dollar 11
Servicer. signs ($)
PIF_DATE The paid in full date as reported by the Servicer. MM/DD/YYYY 10
ACTION_CODE The standard FNMA numeric code used to indicate the Action Code Key: 2
default/delinquent status of a particular loan. 15=Bankruptcy,
30=Foreclosure, , 60=PIF,
63=Substitution,
65=Repurchase,70=REO
INT_ADJ_AMT The amount of the interest adjustment as reported by 2 No commas(,) or dollar 11
the Servicer. signs ($)
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar 11
applicable. signs ($)
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar 11
signs ($)
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or dollar 11
applicable. signs ($)
D-1
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due at 2 No commas(,) or dollar 11
the beginning of the cycle date to be passed through signs ($)
to investors.
SCHED_END_PRIN_BAL The scheduled principal balance due to investors at 2 No commas(,) or dollar 11
the end of a processing cycle. signs ($)
SCHED_PRIN_AMT The scheduled principal amount as reported by the 2 No commas(,) or dollar 11
Servicer for the current cycle -- only applicable signs ($)
for Scheduled/Scheduled Loans.
SCHED_NET_INT The scheduled gross interest amount less the service 2 No commas(,) or dollar 11
fee amount for the current cycle as reported by the signs ($)
Servicer -- only applicable for Scheduled/Scheduled
Loans.
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or dollar 11
Servicer for the current reporting cycle -- only signs ($)
applicable for Actual/Actual Loans.
ACTL_NET_INT The actual gross interest amount less the service 2 No commas(,) or dollar 11
fee amount for the current reporting cycle as signs ($)
reported by the Servicer -- only applicable for
Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower prepays 2 No commas(,) or dollar 11
on his loan as reported by the Servicer. signs ($)
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan waived by 2 No commas(,) or dollar 11
the servicer. signs ($)
MOD_DATE The Effective Payment Date of the Modification for MM/DD/YYYY 10
the loan.
MOD_TYPE The Modification Type. Varchar - value can be 30
alpha or numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or dollar 11
advances made by Servicer. signs ($)
D-2
EXHIBIT : CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND ALL
CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE REMITTANCE
REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING PASSED UNTIL
THE FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT ALL FUNDS PENDING
LOSS APPROVAL AND /OR RESOLUTION OF ANY DISPUTED ITEMS.
The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed. For documentation, an Amortization Schedule from date of
default through liquidation breaking out the net interest and
servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees
advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax,
interest, penalty. Advances prior to default require evidence of
servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments
* REO repairs > $1500 require explanation
* REO repairs > $3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and
WFB's approved Servicing Officer certification
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
D-3
CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney
Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part
A/Initial proceeds and line (18b) for Part
B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
D-4
EXHIBIT 3A: CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address: _____________________
----------------- ------------- ----------------
|Servicer Loan No.| |Servicer Name| |Servicer Address|
| | | | | |
----------------- ------------- ----------------
XXXXX FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name: __________________________________________________________
Property Address: _________________________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES___ NO___
If "Yes", provide deficiency or cramdown amount ___________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of
Mortgage Loan $_______________ (1)
(2) Interest accrued at Net Rate _______________ (2)
(3) Accrued Servicing Fees _______________ (3)
(4) Attorney's Fees _______________ (4)
(5) Taxes (see page 2) _______________ (5)
(6) Property Maintenance _______________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) _______________ (7)
(8) Utility Expenses _______________ (8)
(9) Appraisal/BPO _______________ (9)
(10) Property Inspections _______________ (10)
(11) FC Costs/Other Legal Expenses _______________ (11)
(12) Other (itemize) _______________ (12)
Cash for Keys_________________________ _______________ (12)
HOA/Condo Fees________________________ _______________ (12)
______________________________________ _______________ (12)
TOTAL EXPENSES $_______________ (13)
CREDITS:
(14) Escrow Balance $_______________ (14)
(15) HIP Refund _______________ (15)
(16) Rental Receipts _______________ (16)
(17) Hazard Loss Proceeds _______________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance _______________ (18a)
HUD Part A
_______________ (18b)
HUD Part B
(19) Pool Insurance Proceeds _______________ (19)
(20) Proceeds from Sale of Acquired Property _______________ (20)
(21) Other (itemize) _______________ (21)
D-5
___________________________________________ _______________ (21)
TOTAL CREDITS $_______________ (22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_______________ (23)
D-6
ESCROW DISBURSEMENT DETAIL
TYPE PERIOD OF BASE
(TAX /INS.) DATE PAID COVERAGE TOTAL PAID AMOUNT PENALTIES INTEREST
----------- --------- --------- ---------- ------ --------- --------
D-7
EXHIBIT : STANDARD FILE LAYOUT - DELINQUENCY REPORTING
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
--------------------------- -------------------------------------------------- ------- --------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the
Servicer. This may be different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the
originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by an
external servicer to identify a group of loans in
their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment is due MM/DD/YYYY
to the servicer at the end of processing cycle, as
reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. MM/DD/YYYY
Either by Dismissal, Discharged and/or a Motion
For Relief Was Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan
Such As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer MM/DD/YYYY
with instructions to begin foreclosure
proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected MM/DD/YYYY
to occur.
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure 2 No commas(,)
sale. or dollar
signs ($)
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
EVICTION_COMPLETED_DATE The date the court revokes legal possession of the MM/DD/YYYY
property from the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by MM/DD/YYYY
the Servicer.
REO_CLOSING_DATE The date the REO sale of the property is scheduled MM/DD/YYYY
to close.
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
D-8
PROP_CONDITION_CODE A code that indicates the condition of the
property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs 2
are completed pursuant to a broker's price opinion
or appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why
the loan is in default for this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With MM/DD/YYYY
Mortgage Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim MM/DD/YYYY
Payment
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By MM/DD/YYYY
The Pool Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
o BAP- Borrower Assistance Program
o CO- Charge Off
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o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
NOTE: Xxxxx Fargo Bank will accept alternative Loss Mitigation Types to those
above, provided that they are consistent with industry standards. If Loss
Mitigation Types other than those above are used, the Servicer must supply Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
D-10
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
DELINQUENCY
CODE DELINQUENCY DESCRIPTION
----------- -----------------------------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
D-11
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
STATUS CODE STATUS DESCRIPTION
----------- ------------------------------------------
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
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