AMENDMENT NO. 2 TO PURCHASE, WARRANTIES AND SERVICING AGREEMENT
AMENDMENT
NO. 2 TO PURCHASE, WARRANTIES
AND
SERVICING AGREEMENT
THIS
AMENDMENT NO. 2, effective as of June 16, 2005, amends the Purchase, Warranties
and Servicing Agreement among EMC Mortgage Corporation (the “Purchaser”), First
Tennessee Mortgage Services, Inc., as servicer (the “Servicer”) and First
Horizon Home Loan Corporation (the “Seller”, and together with the Servicer, the
“Company”), previously entered into as of September 1, 2003 (the “Agreement”),
as previously amended.
RECITALS
WHEREAS,
the Seller sells to the Purchaser, and the Purchaser purchases from the Seller,
from time to time, pursuant to the Agreement, certain conventional residential
Mortgage Loans on a servicing retained basis serviced by the Servicer, including
second lien loans; and
WHEREAS,
in connection with future sales of Mortgage Loans to the Purchaser, the Company
and the Purchaser wish to amend the Agreement as set forth below.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
set forth and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Purchaser and the Company agree to amend
the Agreement as follows:
1.
The
preamble, in the second “Whereas” clause, shall be amended to include “or second
lien” following the term “first lien”.
2. The
definition of Mortgage shall be amended to include; “or second lien” following
the term “first lien”.
3. The
definition of “Determination Date” shall be deleted in its entirety and replaced
with the following:
“Determination
Date:
For
first lien Mortgage Loans only, the 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the
month
of the related Remittance Date. For second lien Mortgage Loans only, with
respect to each Remittance Date, the close of business of the last day of the
month preceding the month in which such Remittance Date occurs.”
4. The
definition of “Monthly Advance” shall be amended to add; “For first lien
Mortgage Loans only,” at the beginning of the definition.
5. The
definition of “Remittance Date” shall be deleted in its entirety and replaced
with the following:
“Remittance
Date:
For
first lien Mortgage Loans only, the 18th day of any month, beginning with the
First Remittance Date, or if such 18th day is not a Business Day, the first
Business Day immediately preceding such 18th day. For second lien Mortgage
Loans, the fifth (5th) day of each month, commencing on the fifth (5th) day
of
the month next following the month in which the Cut-off Date occurs, or if
such
fifth (5th) day is not a Business Day, the first Business Day immediately
following such fifth (5th) day.”
6. Section
3.02(b) shall be amended to include “or second lien, as applicable,” following
the term “first lien” and to include “or second priority ownership interest, as
applicable,” following the term “first priority ownership
interest”.
7. Section
3.02(j) shall be amended to include “or second lien, as applicable,” following
the term “first lien”. Further, Section 3.02(j) shall be amended to add “and (4)
for any second lien Mortgage Loan, the related first lien” at the end of the
second sentence.
8.
The
following representations and warranties shall be added to Section
3.02:
(ggg)
With respect to any Mortgage Loan originated on or after August 1, 2004 and
underlying the security, neither the related Mortgage nor the related Mortgage
Note requires the borrower to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan
transaction.
(hhh)
No
Mortgage Loan is secured by Mortgaged Property in the Commonwealth of
Massachusetts with a loan application date on or after November 7, 2004 that
refinances a mortgage loan that is less than sixty (60) months old, unless
such
Mortgage Loan (i) is on an investment property, (ii) meets the requirements
set
forth in the Code of Massachusetts Regulation (“CMR”), 209 CMR 53.04(1)(b), or
(iii) meets the requirements set forth in the 209 CMR 53.04(1)(c).
9.
Section
4.03 shall be amended to include the following:
“For
all
second lien Mortgage Loans only, the
Company shall use its best efforts, consistent with the procedures that the
Company would use in servicing loans for its own account, consistent with
Accepted Servicing Practices, any Primary Mortgage Insurance Policies and the
best interest of Purchaser, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into
and
continue in default and as to which no satisfactory arrangements can be made
for
collection of delinquent payments. In addition, for all second lien Mortgage
Loans only, if the Company reasonably believes that Liquidation Proceeds with
respect to any such Mortgage Loan would not be increased as a result of such
foreclosure or other action, such Mortgage Loan will be charged-off or will
become a liquidated Mortgage Loan. The Company will give notice of any such
charge-off to the Purchaser. The decision of the Company to foreclose on a
defaulted second lien Mortgage Loan shall be subject to a determination by
the
Company that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding.
Further,
for all second lien Mortgage Loans, the Company agrees that it shall provide
to
Purchaser within one hundred twenty (120) days of default for any such second
lien Mortgage Loan a bid pass package to Purchaser containing all relevant
information and any necessary supporting documentation needed for Purchaser
to
determine whether to foreclose or charge-off such second lien Mortgage Loan.
For
any such second lien Mortgage Loan, Purchaser shall advise Company of its
decision to foreclose or charge-off by no later than one hundred eighty (180)
days of default of such second lien Mortgage Loan. In addition, notwithstanding
anything contrary contained herein, Company will cease collection activity
on
any second lien Mortgage Loan that is twelve (12) months or more delinquent.”
10.
Section
4.03 shall be amended to include as the final paragraph:
“If
the
Mortgage relating to a Mortgage Loan had a lien senior to the Mortgage Loan
on
the related Mortgaged Property as of the Cut-off Date, then the Company, in
such
capacity, may consent to the refinancing of the prior senior lien, provided
that
the following requirements are met: (i) 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; and (ii) the interest rate, or, in the case of an
adjustable rate existing senior lien, the maximum interest rate, for the loan
evidencing the refinanced senior lien is no more than 2.0% higher than the
interest rate or the maximum interest rate, as the case may be, on the loan
evidencing the existing senior lien immediately prior to the date of such
refinancing; and (iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.”
11.
Section
5.01 shall be amended to add; “Notwithstanding anything to the contrary
contained herein, for all second lien Mortgage Loans only, Company shall, within
five (5) business days of receipt, distribute by wire transfer of immediately
available funds to the Purchaser all Principal Prepayments made in
full.”
12. Section
5.03 shall be amended to add; “For first lien Mortgage Loans only,” at the start
of the first sentence. Further, Section 5.03 shall be amended to add as a third
paragraph; “Notwithstanding anything to the contrary contained herein, the
Company’s obligations to make such Monthly Advances shall only extend to first
lien Mortgage Loans and Company shall not make such Monthly Advances for any
second lien Mortgage Loan.”
13. Section
5.05 shall be amended to add; “For first lien Mortgage Loans only,” at the start
of the first sentence. Further, Section 5.05 shall be amended to add as a second
sentence; “Notwithstanding anything to the contrary contained herein, the
Company’s obligations to make such Prepayment Interest Shortfalls shall only
extend to first lien Mortgage Loans and Company shall not make such Prepayment
Interest Shortfalls for any second lien Mortgage Loan.”
14. Section
9.01(viii) shall be amended to replace “or second lien” following the term
“first lien
15. Section
11.10 shall be amended to include the following as a third
paragraph:
“The
Company agrees that the Company (i) shall comply with any applicable laws and
regulations regarding the privacy and security of Consumer Information
including, but not limited to the Xxxxx-Xxxxx-Xxxxxx
Act, Title V, Subtitle A, 15 U.S.C. § 6801 et seq.,
(ii)
shall not use Consumer Information in any manner inconsistent with any
applicable laws and regulations regarding the privacy and security of Consumer
Information, (iii) shall not disclose Consumer Information to third parties
except at the specific written direction of the Purchaser, (iv) shall maintain
adequate physical, technical and administrative safeguards to protect Consumer
Information from unauthorized access as provided by the applicable laws and
regulations, and (v) shall immediately notify the Purchaser of any actual or
suspected breach of the confidentiality of Consumer Information that would
have
a material and adverse effect on the Purchaser. Consumer Information
includes, but is not limited to, all personal information about the Mortgagors
that is supplied to the Purchaser by or on behalf of the Company. The
Company agrees that the Company shall indemnify, defend and hold the Purchaser
harmless from and against any loss, claim or liability the Purchaser may suffer
by reason of the Company's failure to perform the obligations set forth in
this
Section 11.10.”
16. Section
11.18 shall be amended to include; “Notwithstanding
anything to the contrary in this Section 11.18, the Company agrees that it
is
required to perform the obligations described in Exhibit K hereto” at the end of
the first flush paragraph.
17. Section
11.19 shall be deleted in its entirety and replaced with the
following:
Section
11.19. Monthly
Reporting with Respect to a Reconstitution.
As
long
as the Company continues to service Mortgage Loans and until the Company has
updated its servicing or reporting system to report on a transmittal basis,
the
Company agrees that with respect to any Mortgage Loan sold or transferred
pursuant to a Reconstitution as described in Section 11.18 of this Agreement
(a
“Reconstituted Mortgage Loan”), the Company, at its expense, shall provide the
Purchaser with the information set forth in Exhibit J attached hereto for each
Reconstituted Mortgage Loan in Excel or such electronic delimited file format
as
may be mutually agreed upon by both Purchaser and Company. Such information
shall be provided monthly for all Reconstituted Mortgage Loans on the fifth
(5th)
Business Day of each month for the immediately preceding monthly period, and
shall be transmitted to xxxx.xxxx@xxxx.xxx.
The
Company and Purchaser agree that the Company shall inform Purchaser when it
has
updated its servicing or reporting system to report on a transmittal basis.
At
such time, Company and Purchaser agree to determine how, if it all, any reports
should be sent under this Section 11.19.
18. Section
11.21 shall be added to the Agreement:
Section
11.21. Signature
Pages/Counterparts. Notwithstanding
anything to the contrary in the Agreement, this Term Sheet shall be executed
by
each party (i) in one or more fully executed copies, each of which shall
constitute a fully executed original Term Sheet, and/or (ii) in counterparts
having one or more original signatures, and all such counterparts containing
the
original signatures of all of the parties hereto taken together shall constitute
a fully executed original Term Sheet, and/or (iii) by delivery of one or more
original signed signature pages to the other parties hereto (x) by mail or
courier, and/or (y) by electronic transmission, including without limitation
by
telecopier, facsimile or email of a scanned image (“Electronic Transmission”),
each of which as received shall constitute for all purposes an executed original
signature page of such party. The Purchaser may deliver a copy of this Term
Sheet, fully executed as provided herein, to each other party hereto by mail
and/or courier and/or Electronic Transmission, and such copy as so delivered
shall constitute a fully executed original Term Sheet, superseding any prior
form of the Term Sheet that differs therefrom in any respect related to the
Mortgage Loans hereunder.”
19. Capitalized
terms used but not defined herein shall have the meanings ascribed to them
in
the Agreement.
20. All
other
terms and conditions of the Agreement remain unchanged and in full force and
effect.
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
EMC
MORTGAGE CORPORATION
Purchaser
By:________________________
Name:
Title:
FIRST
HORIZON HOME LOAN
CORPORATION
Seller
By:
_______________________
Name:
Title:
FIRST
TENNESSEE MORTGAGE
SERVICES,
INC.
Servicer
By:
_______________________
Name:
Title:
EXHIBIT
J
RECONSTITUTED
MORTGAGE LOAN REPORTING
(Reports
sent electronically in Text or Excel Format)
(a) Servicer
Mortgage Loan Number
(b) FNMA
Mortgage Loan Number (if applicable)
(c) Lender/Seller
Mortgage Loan Number (plus any other loan number)
(d) Month
end
date/ date file created
(e) Scheduled
Beginning Balance
(f) Actual
Beginning Balance
(g) Scheduled
Ending Balance
(h) Actual
Ending Balance
(i) Gross
Rate (current gross rate)
(j) Net
Rate
(current passthrough)
(k) Last
Payment Date (LPI_DATE in Fannie's Laser Reporting)- S/S reporting
only
(l) Next
Due
Date -
A/A
reporting only
(m)
Default Reporting Data
(i)
Servicer Loan Number
(ii)
Investor Loan Number
(iii)
Borrower Last Name
(iv)
60
Days
(v)
90
Days
(vi)
120
Days & Over
(vii)
Due
Date
(viii)
Status Code
(ix)
Foreclosure Start Date
(x)
Foreclosure End Date
(xi)
Foreclosure Sale Date
(xii)Bankruptcy
Chapter
(xiii)
Bankruptcy Start Date
(xiv)
Bankruptcy End Date
(xv)
Bankruptcy Post Petition Due Date
(xvi)
Bankruptcy Case #
(xvii)
REO Start Date
(xviii)
REO Sale Date
(xix)
Comment
EXHIBIT
K
COMPANY’S
OBLIGATIONS IN CONNECTION
WITH
A
RECONSTITUTION
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The
Company shall (i) possess the ability to service to a securitization
documents; (ii) service on a “Scheduled/Scheduled” reporting basis
(advancing through the liquidation of an REO Property), (iii) make
compensating interest payments on payoffs and curtailments and (iv)
remit
and report to a master servicer in format acceptable to such master
servicer.
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The
Company shall provide an acceptable annual certification (officer’s
certificate) to the master servicer (as required by the Xxxxxxxx-Xxxxx
Act
of 2002) as well as any other annual certifications required under
the
securitization documents (i.e. the annual statement as to
compliance/annual independent certified public accountants’ servicing
report due).
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The
Company shall allow for the Purchaser, the master servicer or their
designee to perform a review of audited financials and net worth of
the
Company.
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The
Company shall provide a Uniform Single Attestation Program certificate
and
Management Assertion as requested by the master servicer and/or the
Purchaser.
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The
Company shall provide information on each Custodial Account as requested
by the master servicer and/or the Purchaser, and each Custodial Accounts
shall comply with the requirements for such accounts as set forth in
the
securitization documents.
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The
Company shall provide any additional information as reasonably requested
by Purchaser and/or the master servicer.
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