EXHIBIT 99.3
EXECUTION COPY
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GSAA HOME EQUITY TRUST 2006-11
ASSET-BACKED CERTIFICATES
SERIES 2006-11
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
XXXXXXX XXXXX MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
AVELO MORTGAGE, L.L.C.
as Servicer
Dated as of
June 30, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated June 30,
2006 (this "Agreement"), among Xxxxxxx Sachs Mortgage Company ("Assignor"), GS
Mortgage Securities Corp. ("Assignee") and Avelo Mortgage, L.L.C. ( the
"Company").
For and in consideration of the mutual promises contained herein
and other good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Assignment, Assumption and Conveyance.
The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain Xxxxxxx Xxxxx
Residential Mortgage Conduit Program mortgage loans (the "Conduit Mortgage
Loans") and those certain First National Bank of Nevada mortgage loans (the
"FNBN Mortgage Loans") listed on the schedule (the "Mortgage Loan Schedule")
attached hereto as Exhibit A (together, the "Mortgage Loans"), and (b) solely
insofar as it relates to the Mortgage Loans, that certain Flow Servicing
Agreement, dated as of January 1, 2006 (the "Servicing Agreement"), by and
between the Assignor, as owner (the "Owner") and the Company. The Assignor
hereby agrees that it will (i) deliver possession of notes evidencing the
Mortgage Loans to, or at the direction of, the Assignee or its designee and
(ii) take in a timely manner all necessary steps under all applicable laws to
convey and to perfect the conveyance of the Mortgage Loans as required under
the Trust Agreement (as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Servicing Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement, (ii) any
rights and obligations of the Assignor pursuant to the Servicing Agreement
arising prior to the date hereof or (iii) the rights and obligations of the
Owner under the following sections of the Servicing Agreement: Section 6.02
(relating to the Owner's right to terminate the Company) and Section 5.01
(relating to the Owner's right to receive information from the Servicer).
The Assignee hereby assumes all of the Assignor's obligations
under the Mortgage Loans and the Servicing Agreement solely insofar as such
obligations relate to the Mortgage Loans, other than the obligations set forth
in clauses (ii) and (iii) of the preceding paragraph.
The parties hereto agree that with respect to the Mortgage Loans
being serviced under the Servicing Agreement the Servicing Fee Rate for the
Mortgage Loans shall be an amount equal to 0.25% of the aggregate principal
balance of the Mortgage Loans.
2. Recognition of the Company.
From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Servicing
Agreement (solely to the extent set forth herein) and this Agreement to
Deutsche Bank National Trust Company ("Deutsche Bank"), as trustee (including
its successors in interest and any successor trustees under the Trust
Agreement, the "Trustee"), of the GSAA Home Equity Trust 2006-11 (the "Trust")
created pursuant to a Master Servicing and Trust Agreement, dated as of June
1, 2006 (the "Trust Agreement"), among the Assignee, the Trustee, Deutsche
Bank, as a custodian, U.S. Bank National Association, as a custodian, JPMorgan
Chase Bank, National Association, as a custodian and Xxxxx Fargo Bank,
National Association, as master servicer (including its successors in interest
and any successor servicer under the Trust Agreement, the "Master Servicer")
and securities administrator (in such capacity, the "Securities
Administrator"). The Company hereby acknowledges and agrees that from and
after the date hereof (i) the Trust will be the owner of the Mortgage Loans
and the Company will be the servicer of the Mortgage Loans on or after the
applicable Transfer Date pursuant to the terms set forth in the Servicing
Agreement as modified hereby, (ii) the Company shall look solely to the Trust
(including the Trustee and the Master Servicer acting on the Trust's behalf)
for performance of any obligations of the Assignor under the Mortgage Loans
and the Servicing Agreement (solely insofar as it relates to the Mortgage
Loans) (except for such obligations of the Assignor retained by the Assignor
hereunder), (iii) the Trust (including the Trustee and the Master Servicer
acting on the Trust's behalf) shall have all the rights and remedies available
to the Assignor, insofar as they relate to the Mortgage Loans, under the
applicable purchase agreement pursuant to which the Owner purchased the
related Mortgage Loans from the related Seller and the Servicing Agreement,
including, without limitation, the enforcement of the document delivery
requirements set forth in Section 5(b) of the related purchase agreement, and
shall be entitled to enforce all of the obligations of the Company thereunder
insofar as they relate to the Mortgage Loans, including without limitation,
the remedies for breaches of representations and warranties set forth in
Article IX of the Servicing Agreement (except for the rights and remedies
retained by the Assignor hereunder), (iv) all references to the Owner under
the Servicing Agreement insofar as they relate to the Mortgage Loans shall be
deemed to refer to the Trust (except to the extent of the rights and
obligations retained by the Assignor hereunder) (including the Trustee and the
Servicer acting on the Trust's behalf) and (v) the Mortgage Loans will be part
of a REMIC, and the Company shall service the Mortgage Loans and any real
property acquired upon default thereof (including, without limitation, making
or permitting any modification, waiver or amendment of any term of any
Mortgage Loan) after the applicable Transfer Date in accordance with the
Servicing Agreement but in no event in a manner that would (A) cause the REMIC
to fail to qualify as a REMIC or (B) 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, the tax on contributions to a REMIC
set forth in Section 860G(d) of the Code, and the tax on "net income from
foreclosure property" as set forth in Section 860G(c) of the Code). Neither
the Company nor the Assignor shall 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 Company's performance under the Servicing
Agreement with respect to the Mortgage Loans without the prior written consent
of the Master Servicer.
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3. Modification of the Servicing Agreement. Only in so far as it
relates to the Mortgage Loans, the Servicer and the Assignor hereby amend the
Servicing Agreement as follows:
(a) The definition of "Servicing Fee Rate" set forth in
Article I shall be deleted in its entirety and replaced with the following:
"Servicing Fee Rate: With respect to each Mortgage Loan, 0.25% per
annum."
(b) Section 2.05 shall be amended as follows:
(i) "and" shall be deleted from the end of subsection
(vii);
(ii) subsection (viii) shall be amended by deleting
the "." at the end of subsection (viii) and replacing it
with "; and"
(iii) a new subsection (ix) shall be added to Section
2.05 immediately following subsection (viii) which shall
read as follows:
"(ix) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 3.04, the Servicer's right to reimburse itself
pursuant to this subclause (ix) 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, including amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest 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
Purchaser."
(c) the third paragraph of Section 2.18 shall be deleted and
replaced as follows:
"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, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property; provided however, that the Servicer agrees not to sell or dispose of
any such Mortgage Loan to a person who acquires such Mortgage Loan using a
purchase money mortgage. If a period longer than one year is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Servicer
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property, and provided further, that if the Servicer is unable to
sell such REO Property within three years of acquisition, the Servicer shall
obtain an extension from the Internal Revenue Service."
(d) the third paragraph of Section 3.01 shall be deleted and
replaced as follows:
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"With respect to any remittance received by the Owner after 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 the payment was due 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."
(e) Section 3.04 will be amended by adding a new paragraph as
follows:
"In the event that the Servicer determines that any such advances
are Nonrecoverable Advances, the Servicer shall provide the Owner with a
certificate signed by an officer of the Servicer evidencing such
determination. Notwithstanding the foregoing, the Servicer shall not be
permitted to make any advances from amounts held for future distribution, and
instead shall be required to make all advances from its own funds, unless the
Servicer, its parent, or their respective successors hereunder shall have a
long term credit rating of at least "A" by Fitch, Inc., or the equivalent
rating of another Rating Agency."
(f) a new section, Section 11.17, will be added immediately
following Section 11.16 which shall read as follows:
"Section 11.17 Third-Party Beneficiary. Xxxxx Fargo Bank, National
Association, as master servicer and securities administrator under the Master
Servicing and Trust Agreement, dated as of June 1, 2006, among GS Mortgage
Securities Corp., Deutsche Bank National Trust Company, as trustee and a
custodian, U.S. Bank National Association, as a custodian, JPMorgan Chase
Bank, National Association, as a custodian and Xxxxx Fargo Bank, National
Association, shall be considered a third-party beneficiary to this Agreement
entitled to all of the rights and benefits accruing to it as if it were a
direct party to this Agreement."
4. Representations and Warranties of the Company.
The Company warrants and represents to and covenants with, the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation;
(b) The Company has full power and authority to execute,
deliver and perform its obligations under this Agreement and has
full power and authority to perform its obligations under the
Servicing Agreement. The execution by the Company of this
Agreement is in the ordinary course of the Company's business and
will not conflict with, or result in a breach of, any of the
terms, conditions or provisions of the Company's
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charter or bylaws or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by
which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its
property is subject. The execution, delivery and performance by
the Company of this Agreement have been duly authorized by all
necessary corporate action on part of the Company. This Agreement
has been duly executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the Assignor and the
Assignee, will constitute the valid and legally binding obligation
of the Company, enforceable against the Company in accordance with
its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally,
and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity
is required to be obtained or made by the Company in connection
with the execution, delivery or performance by the Company of this
Agreement or the consummation by it of the transaction
contemplated hereby;
(d) The Company shall establish a Custodial Account and an
Escrow Account under the Servicing Agreement in favor of the Trust
with respect to the Mortgage Loans separate from the Custodial
Account and Escrow Account previously established under the
Servicing Agreement in favor of the Assignor;
(e) There is no action, suit, proceeding or investigation
pending or threatened against the Company, before any court,
administrative agency or other tribunal, which would draw into
question the validity of this Agreement or the Servicing
Agreement, or which, either in any one instance or in the
aggregate, is likely to result in any material adverse change in
the ability of the Company to perform its obligations under this
Agreement or the Servicing Agreement, and the Company is solvent;
(f) The Company has serviced the Mortgage Loans in
accordance with the Servicing Agreement and has provided accurate
"paid through" data (assuming the correctness of all "paid
through" data provided by the Assignor to the Company at the time
the Company began servicing the Mortgage Loans) with respect to
the Mortgage Loans to the Assignor;
(g) Except as reflected in the "paid through" data delivered
to the Assignor (assuming the correctness of all "paid through"
data provided by the Assignor to the Company at the time the
Company began servicing the Mortgage Loans), there is no payment
default existing under any Mortgage or any Mortgage Note (which
has been servicing transferred to the Company as of the date of
this Agreement) as of the Securitization Closing Date; and
(h) To the Company's knowledge, there is no non-payment
default existing under any Mortgage or Mortgage Note (which has
been servicing transferred to the Company as of the date of this
Agreement), or any event which, with the passage of time
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or with notice and the termination of any grace or cure period,
would constitute a non-payment default, breach, violation or event
which would permit acceleration as of the Securitization Closing
Date.
Pursuant to Section 9.01 of the Servicing Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Article IX
of the Servicing Agreement are true and correct as of the date hereof as if
such representations and warranties were made on the date hereof.
5. Representations and Warranties of the Assignor.
The Assignor warrants and represents to the Assignee and the Trust
as of date hereof that:
(a) Prior Assignments; Pledges. Except for the sale to the
Assignee, the Assignor has not assigned or pledged any Mortgage Note or
the related Mortgage or any interest or participation therein;
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the
Assignor has not released the related Mortgaged Property from the lien
of any Mortgage, in whole or in part, nor has the Assignor executed an
instrument that would effect any such release, cancellation,
subordination, or rescission. The Assignor has not released any
Mortgagor, in whole or in part, except in connection with an assumption
agreement or other agreement approved by the related federal insurer, to
the extent such approval was required;
(c) No Waiver. The Assignor has not waived the performance by any
Mortgagor of any action, if such Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the
Company waived any default resulting from any action or inaction by such
Mortgagor;
(d) Compliance with Applicable Laws. With respect to each Mortgage
Loan, any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit
opportunity, predatory and abusive lending or disclosure laws applicable
to such Mortgage Loan, including without limitation, any provisions
relating to prepayment charges, have been complied with;
(e) High Cost. With respect to the Mortgage Loans, no Mortgage
Loan is categorized as "High Cost" pursuant to the then-current Standard
& Poor's Glossary for File Format for LEVELS(R) Version 5.6(d), Appendix
E, as revised from time to time and in effect as of the Original
Purchase Date. Furthermore, none of the Mortgage Loans sold by the
Seller are classified as (a) a "high cost mortgage" loan under the Home
Ownership and Equity Protection Act of 1994 or (b) a "high cost home,"
"covered," "high-cost," "high-risk home," or "predatory" loan under any
other applicable state, federal or local law;
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(f) Georgia Fair Lending Act. No Mortgage Loan is secured by a
property in the state of Georgia and originated between October 1, 2002
and March 7, 2003;
(g) Qualified Mortgage Loan. Each Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Internal Revenue Code of 1986,
as amended; and
(h) Credit Reporting. The Assignor will cause to be fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on Mortgagor credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the credit
repositories), on a monthly basis; and
(i) Prepayment Premiums. To the Assignor's knowledge, with respect
to any Mortgage Loan that contains a provision permitting imposition of
a Prepayment Premium prior to maturity: (a) the Mortgage Loan provides
some benefit to the borrower (e.g., a rate or fee reduction) in exchange
for accepting such premium; (b) the Mortgage Loan's originator had a
written policy of offering the borrower or requiring third-party brokers
to offer the borrower the option of obtaining a Mortgage Loan that did
not require payment of such a premium; (c) the Prepayment Premium was
adequately disclosed to the borrower pursuant to applicable state and
federal law; (d) no subprime mortgage loan originated on or after
October 1, 2002 will provide for prepayment premiums for a term in
excess of three (3) years and any subprime mortgage loans originated
prior to such date, and any non-subprime mortgage loans, will not
provide for Prepayment Premiums for a term in excess of five (5) years;
in each case unless the Mortgage Loan was modified to reduce the
prepayment period to no more than three (3) years from the date of the
note and the borrower was notified in writing of such reduction in
prepayment period; and (e) such Prepayment Premium shall not be imposed
in any instance where the Mortgage Loan is accelerated or paid off in
connection with the workout of a delinquent mortgage or due to the
borrower's default, notwithstanding that the terms of the Mortgage Loan
or state or federal law might permit the imposition of such Prepayment
Premium.
6. Remedies for Breach of Representations and Warranties of the
Assignor.
With respect to the Conduit Mortgage Loans, the Assignor hereby
acknowledges and agrees that in the event of any breach of the representations
and warranties made by the Assignor set forth in Section 5 hereof or in
Section 2 of the Representations and Warranties Agreement, dated as of June
30, 2006, between the Assignor and Assignee (the "Representations and
Warranties Agreement") that materially and adversely affects the value of the
Mortgage Loans or the interest of the Assignee or the Trust therein, within
sixty (60) days of the earlier of either discovery by or notice to the
Assignor of such breach of a representation or warranty, it shall cure,
purchase, cause the purchase of, or substitute for the applicable Mortgage
Loan in the same manner and subject to the conditions set forth in Section 3
of the Representations and Warranties Agreement.
With respect to the FNBN Mortgage Loans, the Assignor hereby
acknowledges and agrees that in the event of any breach of representations and
warranties made by the Assignor set forth in Section 5 hereof or in Sections 6
and 7 of the Assignment, Assumption and
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Recognition Agreement, dated as of June 30, 2006, between the Assignor, the
Assignee and First National Bank of Nevada (the "FNBN Assignment Agreement"),
the Assignor shall repurchase such affected FNBN Mortgage Loans as set forth
in the FNBN Assignment Agreement and in the related Servicing Agreement.
7. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws
of the State of New York, without regard to conflicts of law principles,
and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.
(b) No term or provision of this Agreement may be waived or
modified unless such waiver or modification is in writing and signed by
the party against whom such waiver or modification is sought to be
enforced, with the prior written consent of the Trustee.
(c) This Agreement shall inure to the benefit of (i) the
successors and assigns of the parties hereto and (ii) the Trust
(including the Trustee and the Master Servicer acting on the Trust's
behalf). Any entity into which the Assignor, Assignee or the Company may
be merged or consolidated shall, without the requirement for any further
writing, be deemed Assignor, Assignee or the Company, respectively,
hereunder.
(d) Each of this Agreement and the Servicing Agreement shall
survive the conveyance of the Mortgage Loans to the Trust and the
assignment of the purchase agreements and the Servicing Agreement (to
the extent assigned hereunder) by the Assignor to the Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or
amend the terms of the purchase agreements and the Servicing Agreement.
(e) This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all
such counterparts shall constitute one and the same instrument.
(f) In the event that any provision of this Agreement conflicts
with any provision of the purchase agreements or the Servicing Agreement
with respect to the Mortgage Loans, the terms of this Agreement shall
control.
(g) Capitalized terms used in this Agreement (including the
exhibits hereto) but not defined in this Agreement shall have the
meanings given to such terms in the purchase agreements or the Servicing
Agreement, as applicable.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Vice President
XXXXXXX XXXXX MORTGAGE COMPANY
By: XXXXXXX SACHS REAL ESTATE FUNDING
CORP., its General Partner
By: /s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
Title: Vice President
AVELO MORTGAGE, L.L.C. (Servicer)
By: /s/ J. Xxxxxx Xxxxxxx
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Name: J. Xxxxxx Xxxxxxx
Title: President
Conduit/Avelo Step 1 AAR
EXHIBIT A
Mortgage Loan Schedule
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[On File with the Securities Administrator as provided by the Depositor]
A-1
