EXHIBIT 4.3
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NATIONAL CITY MORTGAGE CO.,
as Servicer,
and
NATIONAL CITY MORTGAGE CAPITAL LLC
as Company
SERVICING AGREEMENT
Dated as of _______________
________________Mortgage Loans
[National City Mortgage Capital LLC MBN] Trust Series 20__-__
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS
SECTION 1.01. Definitions
SECTION 1.02. Other Definitional Provisons
SECTION 1.03. Interest Calculations
ARTICLE II REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties Regarding the Servicer
SECTION 2.02. Representations and Warranties of the Company
SECTION 2.03. Enforcement of Representations and Warranties
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. The Servicers
SECTION 3.02. Collection of Certain Mortgage Loan Payments
SECTION 3.03. Withdrawals From the Collection Account
SECTION 3.04. Maintenance of Hazard Insurance; Property
Protection Expenses
SECTION 3.05. Modification Agreements
SECTION 3.06. Trust Estate; Related Documents.
SECTION 3.07. Realization Upon Defaulted Mortgage Loans
SECTION 3.08. Company and Indenture Trustee to Cooperate
SECTION 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer
SECTION 3.10. Annual Statement as to Compliance
SECTION 3.11. ANNUAL SERVICING REPORT
SECTION 3.12. Access to Certain Documentation and Information
Regarding the Mortgage Loans
SECTION 3.13. Maintenance of Certain Servicing Insurance Policies
SECTION 3.14. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of
Mortgaged Property
SECTION 3.15. Optional Repurchase of Defaulted Mortgage Loans
ARTICLE IV SERVICING CERTIFICATE
SECTION 4.01. Statements to Securityholders
ARTICLE V DISTRIBUTION AND PAYMENT ACCOUNTS
SECTION 5.01. Distribution Account
SECTION 5.02. Payment Account
ARTICLE VI THE SERVICER
SECTION 6.01. Liability of the Servicer
SECTION 6.02. Merger of Consolidation of, or Assumption of the Obligations
of, the Servicer
SECTION 6.03. Limitation on Liability of the Servicer and Others
SECTION 6.04. Servicer Not to Resign
SECTION 6.05. Delegation of Duties
SECTION 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's Fees
and Expenses; Indemnification
ARTICLE VII DEFAULT
SECTION 7.01. Servicing Default
SECTION 7.02. Indenture Trustee to Act; Appointment of Successor
SECTION 7.03. Notification to Securityholders.
ARTICLE VIII MISCELLANEOUS PROVISIONS.
SECTION 8.01. Amendment
SECTION 8.02. GOVERNING LAW
SECTION 8.03. Notices
SECTION 8.04. Severability of Provisions
SECTION 8.05. Third-Party Beneficiaries
SECTION 8.06. Counterparts
SECTION 8.07. Effect of Headings and Table of Contents
SECTION 8.08. Termination Upon Purchase by the Servicer or Liquidation of
All Mortgage Loans
SECTION 8.09. Certain Matters Affecting the Indenture Trustee
SECTION 8.10. Authority of the Administrator
Schedule 1 - Mortgage Insurance Component Schedule
This Servicing Agreement, dated as of _______________, between NATIONAL
CITY MORTGAGE CO., as Servicer (the "Servicer") and NATIONAL CITY MORTGAGE
CAPITAL LLC, as Company (the "Company").
W I T N E S S E T H
T H A T:
WHEREAS, National City Mortgage Capital LLC will create [National City
Mortgage Capital LLC MBN] Trust Series 20__-__, an owner trust (the "Issuer")
under Delaware law, and will transfer the Mortgage Loans and all of its rights
under the Mortgage Loan Purchase Agreement to the Issuer,;
WHEREAS, pursuant to the terms of a Trust Agreement dated as of
_______________ (the "Owner Trust Agreement") between the Company, as depositor,
and ______________________, as owner trustee (the "Owner Trustee"), the Company
will sell the Mortgage Collateral to Issuer in exchange for the cash proceeds of
the Securities;
WHEREAS, pursuant to the terms of the Trust Agreement between the Depositor
and the Owner Trustee, the Issuer will issue and transfer to or at the direction
of the Depositor, the Mortgage-Backed Certificates, Series 20__-__ (the
"Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of _______________
(the "Indenture") between the Issuer and the Indenture Trustee, the Issuer will
issue and transfer to or at the direction of the Purchaser the Mortgage-Backed
Notes, Series 20__-__ (the "Notes"), consisting of the Notes and secured by the
Mortgage Collateral;
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase Agreement, the
Company will acquire the Initial Loans; and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Servicer
will service the Mortgage Loans directly or through one or more Subservicers;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
For all purposes of this Servicing Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized
terms not otherwise defined herein shall have the meanings assigned to such
terms in the Definitions contained in Appendix A to the Indenture which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
SECTION 1.02. Other Definitional Provisons.
(a) All terms defined in this Servicing Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Servicing Agreement shall refer to this Servicing
Agreement as a whole and not to any particular provision of this Servicing
Agreement; Section and Exhibit references contained in this Servicing Agreement
are references to Sections and Exhibits in or to this Servicing Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) The definitions contained in this Servicing Agreement are
applicable to the singular as well as the plural forms of such terms and to the
masculine as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
SECTION 1.03. Interest Calculations.
All calculations of interest hereunder that are made in respect of the
Principal Balance of a Mortgage Loan shall be made on a daily basis using a 365-
day year. All calculations of interest on the Securities shall be made on the
basis of the actual number of days in an Interest Period and a year assumed to
consist of 360 days. The calculation of the Servicing Fee shall be made on the
basis of a 360-day year consisting of twelve 30-day months. All dollar amounts
calculated hereunder shall be rounded to the nearest xxxxx with one-half of one
xxxxx being rounded down.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. Representations and Warranties Regarding the Servicer.
The Servicer represents and warrants to Company, the Issuer and for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, [the date of the Servicing Agreement],
the Closing Date [and any Deposit Date], that:
(i) The Servicer is a corporation duly organized, validly existing and
in good standing under the laws of the State of [_______] and has the
corporate power to own its assets and to transact the business in which it
is currently engaged. The Servicer is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure to so
qualify would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make, execute, deliver
and perform this Servicing Agreement and all of the transactions
contemplated under this Servicing Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance of
this Servicing Agreement. When executed and delivered, this Servicing
Agreement will constitute the legal, valid and binding obligation of the
Servicer enforceable in accordance with its terms, except as enforcement of
such terms may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) The Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity or
enforceability of this Servicing Agreement, except for such consent,
license, approval or authorization, or registration or declaration, as
shall have been obtained or filed, as the case may be;
(iv) The execution and delivery of this Servicing Agreement and the
performance of the transactions contemplated hereby by the Servicer will
not violate any provision of any existing law or regulation or any order or
decree of any court applicable to the Servicer or any provision of the
Certificate of Incorporation or Bylaws of the Servicer, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which the Servicer is a party or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of
the Servicer threatened, against the Servicer or any of its properties or
with respect to this Servicing Agreement or the Notes or the Certificates
which in the opinion of the Servicer has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this Servicing Agreement. The foregoing representations and warranties
shall survive any termination of the Servicer hereunder.
SECTION 2.02. Representations and Warranties of the Company.
The Company hereby represents and warrants to the Servicer for the
benefit of the Indenture Trustee, as pledgee of the Mortgage Collateral, and the
Securityholders, as of the Cut-Off Date, the Closing Date and any Deposit Date,
that:
(i) The Company is a limited liability company in good standing under
the laws of the State of Delaware;
(ii) The Company has full power, authority and legal right to execute
and deliver this Servicing Agreement and to perform its obligations under
this Servicing Agreement, and has taken all necessary action to authorize
the execution, delivery and performance by it of this Servicing Agreement;
and
(iii) The execution and delivery by the Company of this Servicing
Agreement and the performance by the Company of its obligations under this
Servicing Agreement will not violate any provision of any law or regulation
governing the Company or any order, writ, judgment or decree of any court,
arbitrator or governmental authority or agency applicable to the Company or
any of its assets. Such execution, delivery, authentication and performance
will not require the authorization, consent or approval of, the giving of
notice to, the filing or registration with, or the taking of any other
action with respect to, any governmental authority or agency regulating the
activities of limited liability companies. Such execution, delivery,
authentication and performance will not conflict with, or result in a
breach or violation of, any mortgage, deed of trust, lease or other
agreement or instrument to which the Company is bound.
SECTION 2.03. Enforcement of Representations and Warranties.
The Servicer, on behalf of and subject to the direction of the
Indenture Trustee, as pledgee of the Mortgage Collateral, or the Credit
Enhancer, shall enforce the representations and warranties of the Seller
pursuant to the Mortgage Loan Purchase Agreement. Upon the discovery by the
Seller, the Servicer, the Indenture Trustee, the Credit Enhancer, the Company or
any Custodian of a breach of any of the representations and warranties made in
the Mortgage Loan Purchase Agreement, in respect of any Mortgage Loan which
materially and adversely affects the interests of the Securityholders or the
Credit Enhancer, the party discovering such breach shall give prompt written
notice to the other parties (any Custodian being so obligated under a Custodial
Agreement). The Servicer shall promptly notify the Seller of such breach and
request that, pursuant to the terms of the Mortgage Loan Purchase Agreement, the
Seller either (i) cure such breach in all material respects within 45 days (with
respect to a breach of the representations and warranties contained in Section
3.1(a) of the Mortgage Loan Purchase Agreement) or 90 days (with respect to a
breach of the representations and warranties contained in Section 3.1(b) of the
Mortgage Loan Purchase Agreement) from the date the Seller was notified of such
breach or (ii) purchase such Mortgage Loan from the Company at the price and in
the manner set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement;
PROVIDED that the Seller shall, subject to the conditions set forth in the
Mortgage Loan Purchase Agreement, have the option to substitute an Eligible
Substitute Mortgage Loan or Loans for such Mortgage Loan. In the event that the
Seller elects to substitute one or more Eligible Substitute Mortgage Loans
pursuant to Section 3.1(b) of the Mortgage Loan Purchase Agreement, the Seller
shall deliver to the Company with respect to such Eligible Substitute Mortgage
Loans, the original Mortgage Note, the Mortgage, and such other documents and
agreements as are required by the Mortgage Loan Purchase Agreement. No
substitution will be made in any calendar month after the Determination Date for
such month. Payments due with respect to Eligible Substitute Mortgage Loans in
the month of substitution shall not be transferred to the Company and will be
retained by the Servicer and remitted by the Servicer to the Seller on the next
succeeding Payment Date provided a payment has been received by the Company for
such month in respect of the Mortgage Loan to be removed. The Servicer shall
amend or cause to be amended the Mortgage Loan Schedule to reflect the removal
of such Mortgage Loan and the substitution of the Eligible Substitute Mortgage
Loans and the Servicer shall promptly deliver the amended Mortgage Loan Schedule
to the Owner Trustee and Indenture Trustee.
It is understood and agreed that the obligation of the Seller to cure
such breach or purchase or substitute for such Mortgage Loan as to which such a
breach has occurred and is continuing shall constitute the sole remedy
respecting such breach available to the Company and the Indenture Trustee, as
pledgee of the Mortgage Collateral, against the Seller. In connection with the
purchase of or substitution for any such Mortgage Loan by the Seller, the
Company shall assign to the Seller all of the right, title and interest in
respect of the Mortgage Loan Purchase Agreement applicable to such Mortgage
Loan. Upon receipt of the Repurchase Price, or upon completion of such
substitution, the applicable Custodian shall deliver the Mortgage Files to the
Servicer, together with all relevant endorsements and assignments.
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
SECTION 3.01. The Servicers.
(a) The Servicer shall service and administer the Mortgage Loans in the
same manner as would prudent institutional mortgage lenders servicing comparable
mortgage loans for their own account in the jurisdictions where the related
Mortgaged Properties are located and in a manner consistent with the terms of
this Servicing Agreement and which shall be normal and usual in its general
mortgage servicing activities and shall have full power and authority, acting
alone or through a subservicer, to do any and all things in connection with such
servicing and administration which it may deem necessary or desirable, it being
understood, how ever, that the Servicer shall at all times remain responsible to
the Company, the Indenture Trustee, as pledgee of the Mortgage Collateral, and
the Securityholders for the performance of its duties and obligations hereunder
in accordance with the terms hereof and the servicing standard set forth above.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered by the Company and the Indenture Trustee,
as pledgee of the Mortgage Collateral, to execute and deliver, on behalf of
itself, the Company, the Securityholders and the Indenture Trustee or any of
them, any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge and all other comparable instruments with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. The Company,
the Indenture Trustee and the Custodian, as applicable, shall furnish the
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. On the Closing Date, the Company shall deliver to the Servicer
a power of attorney substantially in the form of Exhibit B hereto.
If the Mortgage relating to a Mortgage Loan did not have a lien senior
on the related Mortgaged Property as of the Cut-Off Date, then the Servicer, in
such capacity, may not consent to the placing of a lien senior to that of the
Mortgage on the related Mortgaged Property. 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 Servicer, in such capacity, may
consent to the refinancing of such senior lien; PROVIDED that (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 for the loan evidencing the refinanced senior lien on the date of such
refinancing is no higher than the interest rate on the loan evidencing the
existing senior lien immediately prior to the date of such refinancing.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Servicing Agreement) to the Company under this Servicing
Agreement is intended by the parties to be that of an independent contractor and
not that of a joint venturer, partner or agent.
(b) The Servicer has entered into Initial Subservicing Agreements with
the Initial Subservicers for the servicing and administration of the Mortgage
Loans and may enter into additional Sub servicing Agreements with Subservicers
for the servicing and administration of certain of the Mortgage Loans.
References in this Servicing Agreement to actions taken or to be taken by the
Servicer in servicing the Mortgage Loans include actions taken or to be taken by
a Subservicer on behalf of the Servicer and any amount received by such
Subservicer in respect of a Mortgage Loan shall be deemed to have been received
by the Servicer whether or not actually received by the Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are not
inconsistent with this Servicing Agreement and as the Servicer and the
Subservicer have agreed. With the approval of the Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicers will remain obligated under the related Subservicing Agreements.
The Servicer and the Subservicer may enter into amendments to the related
Subservicing Agreements; PROVIDED, HOWEVER, that any such amendments shall be
consistent with and not violate the provisions of this Servicing Agreement. The
Servicer shall be entitled to terminate any Subservicing Agreement in accordance
with the terms and conditions thereof and without any limitation by virtue of
this Servicing Agreement; PROVIDED, HOWEVER, that in the event of termination of
any Subservicing Agreement by the Servicer or the Subservicer, the Servicer
shall either act as servicer of the related Mortgage Loan or enter into a
Subservicing Agreement with a successor Subservicer which will be bound by the
terms of the related Subservicing Agreement. The Servicer shall be entitled to
enter into any agreement with a Subservicer for indemnification of the Servicer
and nothing contained in this Servicing Agreement shall be deemed to limit or
modify such indemnification.
In the event that the rights, duties and obligations of the Servicer
are terminated hereunder, any successor to the Servicer in its sole discretion
may, to the extent permitted by applicable law, terminate the existing
Subservicing Agreement with any Subservicer in accordance with the terms of the
applicable Subservicing Agreement or assume the terminated Servicer's rights and
obligations under such subservicing arrangements which termination or assumption
will not violate the terms of such arrangements.
As part of its servicing activities hereunder, the Servicer, for the
benefit of the Company, shall use reasonable efforts to enforce the obligations
of each Subservicer under the related Subservicing Agreement, to the extent that
the non-performance of any such obligation would have material and adverse
effect on a Mortgage Loan. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due in
respect of the related Mortgage Loan or (ii) from a specific recovery of costs,
expenses or attorneys fees against the party against whom such enforcement is
directed.
SECTION 3.02. Collection of Certain Mortgage Loan Payments.
(a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Xxxx xxxx Loans, and shall, to
the extent such procedures shall be consistent with this Servicing Agreement,
follow such collection procedures as shall be normal and usual in its general
mortgage servicing activities. Consistent with the foregoing, and without
limiting the generality of the foregoing, the Servicer may in its discretion (i)
waive any late payment charge, penalty interest or other fees which may be
collected in the ordinary course of servicing such Mortgage Loan and (ii)
arrange with a Mortgagor a schedule for the payment of principal and interest
due and unpaid; PROVIDED such arrangement is consistent with the Servicer's
policies with respect to home equity mortgage loans; PROVIDED, FURTHER, that
notwithstanding such arrangement such Mortgage Loans will be included in the
information regarding delinquent Mortgage Loans set forth in the Servicing
Certificate. The Servicer may also extend the Due Date for payment due on a
Mortgage Loan, PROVIDED, HOWEVER, that the Servicer shall first determine that
any such waiver or extension will not adversely affect the lien of the related
Mortgage. Consistent with the terms of this Servicing Agreement, the Servicer
may also 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 determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Securityholders or the Credit Enhancer, PROVIDED, HOWEVER, that
the Servicer may not modify or permit any Subservicer to modify any Mortgage
Loan (including without limitation any modification that would change the
Mortgage Rate, forgive the payment of any principal or interest (unless in
connection with the liquidation of the related Mortgage Loan) or extend the
final maturity date of such Mortgage Loan) unless such Mortgage Loan is in
default or, in the judgment of the Servicer, such default is reasonably
foreseeable.
(b) The Servicer shall establish an account (the "Collection Account")
in which the Servicer shall deposit or cause to be deposited any amounts
representing payments on and any collections in respect of the Mortgage Loans
received by it subsequent to the Cut-Off Date as to any Initial Loan or the
related Deposit Date as to any Additional Loan (other than in respect of the
payments referred to in the following paragraph) within __ Business Day[s]
following receipt thereof (or otherwise on or prior to the Closing Date),
including the following payments and collections received or made by it (without
duplication):
(i) all payments of principal of or interest on the Mortgage Loans
received by the Servicer from the respective Subservicer, net of any
portion of the interest thereof retained by the Subservicer as Subservicing
Fees;
(ii) the aggregate Repurchase Price of the Mortgage Loans purchased by
the Servicer pursuant to Section 3.15;
(iii) Net Liquidation Proceeds net of any related Foreclosure Profit;
(iv) all proceeds of any Mortgage Loans repurchased by the Seller
pursuant to the Mortgage Loan Purchase Agreement, and all Substitution
Adjustment Amounts required to be deposited in connection with the
substitution of an Eligible Substitute Mortgage Loan pursuant to the
Mortgage Loan Purchase Agreement;
(v) insurance proceeds, other than Net Liquidation Proceeds, resulting
from any insurance policy maintained on a Mortgaged Property; and
(vi) amounts required to be paid by the Servicer pursuant to Section
8.08.
Provided, however, that with respect to each Collection Period, the
Servicer shall be permitted to retain from payments in respect of interest on
the Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties,
payable by Mortgagors, or amounts received by the Servicer for the accounts of
Mortgagors for application towards the payment of taxes, insurance premiums,
assessments and similar items. In the event any amount not required to be
deposited in the Collection Account is so deposited, the Servicer may at any
time withdraw such amount from the Collection Account, any provision herein to
the contrary notwithstanding. The Collection Account may contain funds that
belong to one or more trust funds created for the notes or certificates of other
series and may contain other funds respecting payments on mortgage loans
belonging to the Servicer or serviced or serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Servicer shall keep records that
accurately reflect the funds on deposit in the Collection Account that have been
identified by it as being attributable to the Mortgage Loans and shall hold all
collections in the Collection Account to the extent they represent collections
on the Mortgage Loans for the benefit of the Company, the Indenture Trustee, the
Securityholders and the Credit Enhancer, as their interests may appear. The
Servicer shall remit all Foreclosure Profits to itself as additional servicing
compensation.
The Servicer may cause the institution maintaining the Collection
Account to invest any funds in the Collection Account in Eligible Investments
(including obligations of the Servicer or any of its Affiliates, if such
obligations otherwise qualify as Eligible Investments), which shall mature not
later than the Business Day next preceding the Payment Date and shall not be
sold or disposed of prior to its maturity. Except as provided above, all income
and gain realized from any such investment shall be for the benefit of the
Servicer and shall be subject to its withdrawal or order from time to time. The
amount of any losses incurred in respect of the principal amount of any such
investments shall be deposited in the Collection Account by the Servicer out of
its own funds immediately as realized.
(c) The Servicer will require each Subservicer to hold all funds
constituting collections on the Mortgage Loans, pending remittance thereof to
the Servicer, in one or more accounts meeting the requirements of an Eligible
Account, and invested in Eligible Investments, unless, all such collections are
remitted on a daily basis to the Servicer for deposit into the Collection
Account.
SECTION 3.03. Withdrawals From the Collection Account.
The Servicer shall, from time to time as provided herein, make
withdrawals from the Collection Account of amounts on deposit therein pursuant
to Section 3.02 that are attributable to the Mortgage Loans for the following
purposes:
(i) to deposit in the Distribution Account, on the Business Day prior
to each Payment Date, an amount equal to the Security Collections required
to be distributed on such Payment Date;
(ii) to the extent deposited to the Collection Account, to reimburse
itself or the related Subservicer for previously unreimbursed expenses
incurred in maintaining individual insurance policies pursuant to Section
3.04, or Liquidation Expenses, paid pursuant to Section 3.07 or otherwise
reimbursable pursuant to the terms of this Servicing Agreement (to the
extent not payable pursuant to Section 3.09), such withdrawal right being
limited to amounts received on particular Mortgage Loans (other than any
Repurchase Price in respect thereof) which represent late recoveries of the
payments for which such advances were made, or from related Liquidation
Proceeds or the proceeds of the purchase of such Mortgage Loan;
(iii) to pay to itself out of each payment received on account of
interest on a Mortgage Loan as contemplated by Section 3.09, an amount
equal to the related Servicing Fee (to the extent not retained pursuant to
Section 3.02), and to pay to any Subservicer any Subservicing Fees not
previously withheld by the Subservicer;
(iv) to the extent deposited in the Collection Account to pay to itself
as additional servicing compensation any interest or investment income
earned on funds deposited in the Collection Account and Payment Account
that it is entitled to withdraw pursuant to Sections 3.02(b) and 5.01;
(v) to the extent deposited in the Collection Account, to pay to itself
as additional servicing compensation any Foreclosure Profits;
(vi) to pay to itself or the Seller, with respect to any Mortgage Loan
or property acquired in respect thereof that has been purchased or
otherwise transferred to the Seller, the Servicer or other entity, all
amounts received thereon and not required to be distributed to
Securityholders as of the date on which the related Purchase Price or
Repurchase Price is determined;
(vii) to withdraw any other amount deposited in the Collection Account
that was not required to be deposited therein pursuant to Section 3.02;
(viii) to pay to the Seller the amount, if any, deposited in the
Collection Account by the Indenture Trustee upon release thereof from the
Funding Account representing payments for Additional Loans; and
(ix) after the occurrence of an Amortization Event, to pay to the
Seller, the Excluded Amount.
Since, in connection with withdrawals pursuant to clauses (iii), (iv),
(vi) and (vii), the Servicer's entitlement thereto is limited to collections or
other recoveries on the related Mortgage Loan, the Servicer shall keep and
maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Collection Account pursuant to
such clauses. Notwithstanding any other provision of this Servicing Agreement,
the Servicer shall be entitled to reimburse itself for any previously
unreimbursed expenses incurred pursuant to Section 3.07 or otherwise
reimbursable pursuant to the terms of this Servicing Agreement that the Servicer
determines to be otherwise nonrecoverable (except with respect to any Mortgage
Loan as to which the Repurchase Price has been paid), by withdrawal from the
Collection Account of amounts on deposit therein attributable to the Mortgage
Loans on any Business Day prior to the Payment Date succeeding the date of such
determination.
SECTION 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses.
The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance naming the Servicer or related Subservicer as loss payee thereunder
providing extended coverage in an amount which is at least equal to the lesser
of (i) the maximum insurable value of the improvements securing such Mortgage
Loan from time to time or (ii) the combined principal balance owing on such
Mortgage Loan and any mortgage loan senior to such Mortgage Loan from time to
time. The Servicer shall also cause to be maintained on property acquired upon
foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount which is at least equal to the
amount necessary to avoid the application of any co-insurance clause contained
in the related hazard insurance policy. Amounts collected by the Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the related Mortgaged Property or property thus acquired or amounts released
to the Mortgagor in accordance with the Servicer's normal servicing procedures)
shall be deposited in the Collection Account to the extent called for by Section
3.02. In cases in which any Mortgaged Property is located at any time during the
life of a Mortgage Loan in a federally designated flood area, the hazard
insurance to be maintained for the related Mortgage Loan shall include flood
insurance (to the extent available). All such flood insurance shall be in
amounts equal to the lesser of (i) the amount required to compensate for any
loss or damage to the Mortgaged Property on a replacement cost basis and (ii)
the maximum amount of such insurance available for the related Mortgaged
Property under the national flood insurance program (assuming that the area in
which such Mortgaged Property is located is participating in such program). The
Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake or other additional insurance and shall be under no obligation itself
to maintain any such additional insurance on property acquired in respect of a
Mortgage Loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance. If
the Servicer shall obtain and maintain a blanket policy consistent with its
general mortgage servicing activities insuring against hazard losses on all of
the Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property a policy complying with the first sentence of
this Section 3.04 and there shall have been a loss which would have been covered
by such policy, deposit in the Collection Account the amount not otherwise
payable under the blanket policy because of such deductible clause. Any such
deposit by the Servicer shall be made on the last Business Day of the Collection
Period in the month in which payments under any such policy would have been
deposited in the Collection Account. In connection with its activities as
administrator and servicer of the Mortgage Loans, the Servicer agrees to
present, on behalf of itself, the Company, the Issuer, the Indenture Trustee and
the Securityholders, claims under any such blanket policy.
SECTION 3.05. Modification Agreements.
The Servicer or the related Subservicer, as the case may be, shall be
entitled to (A) execute assumption agreements, substitution agreements, and
instruments of satisfaction or cancellation or of partial or full release or
discharge, or any other document contemplated by this Servicing Agreement and
other comparable instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties subject to the Mortgages (and the Company shall
promptly execute any such documents on request of the Servicer) and (B) approve
the granting of an easement thereon in favor of another Person, any alteration
or demolition of the related Mortgaged Property or other similar matters, if it
has determined, exercising its good faith business judgment in the same manner
as it would if it were the owner of the related Mortgage Loan, that the security
for, and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby. A partial release pursuant to this Section 3.05
shall be permitted only if the Combined Loan-to-Value Ratio for such Mortgage
Loan after such partial release does not exceed the Combined Loan-to-Value Ratio
for such Mortgage Loan as of the Cut-Off Date. Any fee collected by the Servicer
or the related Sub servicer for processing such request will be retained by the
Servicer or such Subservicer as additional servicing compensation.
SECTION 3.06. Trust Estate; Related Documents.
(a) When required by the provisions of this Servicing Agreement, the
Company shall execute instruments to release property from the terms of this
Servicing Agreement, or convey the Company's interest in the same, in a manner
and under circumstances which are not inconsistent with the provisions of this
Servicing Agreement. No party relying upon an instrument executed by the Company
as provided in this Article III shall be bound to ascertain the Company's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any moneys.
(b) If from time to time the Servicer shall deliver to the Company or
the related Custodian copies of any written assurance, assumption agreement or
substitution agreement or other similar agreement pursuant to Section 3.05, the
Company or the related Custodian shall check that each of such documents
purports to be an original executed copy (or a copy of the original executed
document if the original executed copy has been submitted for recording and has
not yet been returned) and, if so, shall file such documents, and upon receipt
of the original executed copy from the applicable recording office or receipt of
a copy thereof certified by the applicable recording office shall file such
originals or certified copies with the Related Documents. If any such documents
submitted by the Servicer do not meet the above qualifications, such documents
shall promptly be returned by the Company or the related Custodian to the
Servicer, with a direction to the Servicer to forward the correct documentation.
(c) Upon Company Request accompanied by an Officers' Certificate of the
Servicer pursuant to Section 3.09 of this Servicing Agreement to the effect that
a Mortgage Loan has been the subject of a final payment or a prepayment in full
and the related Mortgage Loan has been terminated or that substantially all
Liquidation Proceeds which have been determined by the Servicer in its
reasonable judgment to be finally recoverable have been recovered, and upon
deposit to the Collection Account of such final monthly payment, prepayment in
full together with accrued and unpaid interest to the date of such payment with
respect to such Mortgage Loan or, if applicable, Liquidation Proceeds, the
Company shall promptly release the Related Documents to the Servicer, along with
such documents as the Servicer or the Mortgagor may request as contemplated by
the Servicing Agreement to evidence satisfaction and discharge of such Mortgage
Loan. If from time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, the Servicer requests the Company or the related Custodian
to release the Related Documents and delivers to the Company or the related
Custodian a trust receipt reasonably satisfactory to the Company or the related
Custodian and signed by a Responsible Officer of the Servicer, the Company or
the related Custodian shall release the Related Documents to the Servicer. If
such Mortgage Loans shall be liquidated and the Company or the related Custodian
receives a certificate from the Servicer as provided above, then, upon request
of the Company or the related Custodian shall release the trust receipt to the
Servicer.
SECTION 3.07. Realization Upon Defaulted Mortgage Loans.
With respect to such of the Mortgage Loans as come into and continue in
default, the Servicer will decide whether to foreclose upon the Mortgaged
Properties securing such Mortgage Loans or write off the unpaid principal
balance of the Mortgage Loans as bad debt; PROVIDED that if the Servicer has
actual knowledge that any Mortgaged Property is affected by hazardous or toxic
wastes or substances and that the acquisition of such Mortgaged Property would
not be commercially reasonable, then the Servicer will not cause the Company to
acquire title to such Mortgaged Property in a foreclosure or similar proceeding.
In connection with such foreclosure or other conversion, the Servicer shall
follow such practices (including, in the case of any default on a related senior
mortgage loan, the advancing of funds to correct such default) and procedures as
it shall deem necessary or advisable and as shall be normal and usual in its
general mortgage servicing activities; PROVIDED that the Servicer shall not be
liable in any respect hereunder if the Servicer is acting in connection with any
such foreclosure or attempted foreclosure which is not completed or other
conversion in a manner that is consistent with the provisions of this Servicing
Agreement. The foregoing is subject to the proviso that the Servicer shall not
be required to expend its own funds in connection with any fore closure or
attempted foreclosure which is not completed or towards the correction of any
default on a related senior mortgage loan or restoration of any property unless
it shall determine that such expenditure will increase Net Liquidation Proceeds.
In the event of a determination by the Servicer that any such expenditure
previously made pursuant to this Section 3.07 will not be reimbursable from Net
Liquidation Proceeds, the Servicer shall be entitled to reimbursement of its
funds so expended pursuant to Section 3.03.
Notwithstanding any provision of this Servicing Agreement, a Mortgage
Loan may be deemed to be finally liquidated if substantially all amounts
expected by the Servicer to be received in connection with the related defaulted
Mortgage Loan have been received; PROVIDED, HOWEVER, any subsequent collections
with respect to any such Mortgage Loan shall be deposited to the Collection
Account. For purposes of determining the amount of any Liquidation Proceeds or
Insurance Proceeds, or other unscheduled collections, the Servicer may take into
account minimal amounts of additional receipts expected to be received or any
estimated additional liquidation expenses expected to be incurred in connection
with the related defaulted Mortgage Loan.
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 issued to the Company and the Indenture Trustee as their interests may
appear, or to their respective nominee on behalf of Securityholders.
Notwithstanding any such acquisition of title and cancellation of the related
Mortgage Loan, such Mortgaged Property shall (except as otherwise expressly
provided herein) be considered to be an outstanding Mortgage Loan held as an
asset of the Company until such time as such property shall be sold. Consistent
with the foregoing for purposes of all calculations hereunder, so long as such
Mortgaged Property shall be considered to be an outstanding Mortgage Loan it
shall be assumed that, notwithstanding that the indebtedness evidenced by the
related Mortgage Note shall have been discharged, such Mortgage Note in effect
at the time of any such acquisition of title before any adjustment thereto by
reason of any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period will remain in effect.
Any proceeds from foreclosure proceedings or the purchase or repurchase
of any Mortgage Loan pursuant to the terms of this Servicing Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds or Insurance
Proceeds, will be applied in the following order of priority: first, to
reimburse the Servicer or the related Subservicer in accordance with Section
3.07; second, to all Servicing Fees payable therefrom; third, to the extent of
accrued and unpaid interest on the related Mortgage Loan, at the Net Mortgage
Rate to the Due Date prior to the Payment Date on which such amounts are to be
deposited in the Payment Account; fourth, as a recovery of principal on the
Mortgage Loan; and fifth, to Foreclosure Profits.
SECTION 3.08. Company and Indenture Trustee to Cooperate.
On or before each Payment Date, the Servicer will notify the Indenture
Trustee or the relevant Custodian, with a copy to the Company, of the
termination of or the payment in full and the termination of any Mortgage Loan
during the preceding Collection Period, which notification shall be by a
certification in substantially the form attached hereto as Exhibit C (which
certification shall include a statement to the effect that all amounts received
in connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.02 have been so deposited or credited)
of a Servicing Officer. Upon receipt of payment in full, the Servicer is
authorized to execute, pursuant to the authorization contained in Section 3.01,
if the assignments of Mortgage have been recorded as required under the Mortgage
Loan Purchase Agreement, an instrument of satisfaction regarding the related
Mortgage, which instrument of satisfaction shall be recorded by the Servicer if
required by applicable law and be delivered to the Person entitled thereto. It
is understood and agreed that any expenses incurred in connection with such
instrument of satisfaction or transfer shall be reimbursed from amounts
deposited in the Collection Account. From time to time and as appropriate for
the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee or the
relevant Custodian shall, upon request of the Servicer and delivery to the
Indenture Trustee or relevant Custodian, with a copy to the Company, of a
Request for Release, in the form annexed hereto as Exhibit D, signed by a
Servicing Officer, release or cause to be released the related Mortgage File to
the Servicer and the Company and Indenture Trustee shall promptly execute such
documents, in the forms provided by the Servicer, as shall be necessary for the
prosecution of any such proceedings or the taking of other servicing actions.
Such trust receipt shall obligate the Servicer to return the Mortgage File to
the Indenture Trustee or the related Custodian (as specified in such receipt)
when the need therefor by the Servicer no longer exists unless the Mortgage Loan
shall be liquidated, in which case, upon receipt of a certificate of a Servicing
Officer similar to that hereinabove specified, the trust receipt shall be
released to the Servicer.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the assignments of
Mortgage in accordance with the provisions of the Mortgage Loan Purchase
Agreement, the Company shall, if so requested in writing by the Servicer,
promptly execute an appropriate assignment in the form provided by the Servicer
to assign such Mortgage Loan for the purpose of collection to the Servicer (any
such assignment shall unambiguously indicate that the assignment is for the
purpose of collection only), and, upon such assignment, such assignee for
collection will thereupon bring all required actions in its own name and
otherwise enforce the terms of the Mortgage Loan and deposit or credit the Net
Liquidation Proceeds, exclusive of Foreclosure Profits, received with respect
thereto in the Collection Account. In the event that all delinquent payments due
under any such Mortgage Loan are paid by the Mortgagor and any other defaults
are cured then the assignee for collection shall promptly reassign such Mortgage
Loan to the Company and return all Related Documents to the place where the
related Mortgage File was being maintained.
In connection with the Company's obligation to cooperate as provided in
this Section 3.08 and all other provisions of this Servicing Agreement requiring
the Company to authorize or permit any actions to be taken with respect to the
Mortgage Loans, the Indenture Trustee, as pledgee of the Mortgage Collateral in
the Company, expressly agrees, on behalf of the Company, to take all such
actions on behalf of the Company and to promptly execute and return all
instruments reasonably required by the Servicer in connection therewith;
PROVIDED that if the Servicer shall request a signature of the Indenture
Trustee, on behalf of the Company, the Servicer will deliver to the Indenture
Trustee an Officer's Certificate stating that such signature is necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties under this Servicing Agreement.
SECTION 3.09. Servicing Compensation; Payment of Certain Expenses by
Servicer.
The Servicer shall be entitled to receive the Servicing Fee in
accordance with Section 3.03 as compensation for its services in connection with
servicing the Mortgage Loans. Moreover, additional servicing compensation in the
form of late payment charges and certain other receipts not required to be
deposited in the Collection Account as specified in Section 3.02 shall be
retained by the Servicer. The Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder (including payment of
all other fees and expenses not expressly stated hereunder to be for the account
of the Securityholders, including, without limitation, the fees and expenses of
the Administrator, Owner Trustee, Indenture Trustee and any Custodian) and shall
not be entitled to reimbursement therefor except as specifically provided
herein.
SECTION 3.10. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Company, the Issuer and the
Indenture Trustee, with a copy to the Credit Enhancer, on or before ________ of
each year, beginning ________, ____, an Officer's Certificate stating that (i) a
review of the activities of the Servicer during the preceding fiscal year and of
its performance under this Servicing Agreement has been made under such
officer's supervision, (ii) to the best of such officer's knowledge, based on
such review, the Servicer has fulfilled all its material obligations under this
Servicing Agreement in all material respects throughout such fiscal year, or, if
there has been a material default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, based on consultation
with counsel, any continuation Uniform Commercial Code financing statement or
other Uniform Commercial Code financing statement during the preceding fiscal
year which the Servicer determined was necessary to be filed was filed in order
to continue protection of the interest of the Company in the Mortgage Loans. In
addition, the Servicer shall deliver or cause each Subservicer to deliver to the
Indenture Trustee, the Company, the Issuer, the Depositor and the Credit
Enhancer a copy of each certification, accountant's report or other document
upon which the foregoing Officer's Certificate is based with respect to such
Subservicer's performance.
(b) The Servicer shall deliver to the Company, the Issuer and the
Indenture Trustee, with a copy to the Credit Enhancer, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice by means of an Officer's Certificate of any event
which with the giving of notice or the lapse of time or both, would become a
Servicer of Default.
SECTION 3.11. ANNUAL SERVICING REPORT.
On or before ________ of each year, beginning ________, ____, the
Servicer at its expense shall cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish a report to the Company, the Issuer, the Indenture Trustee, the
Depositor, the Credit Enhancer and each Rating Agency to the effect that such
firm has examined certain documents and records relating to the servicing of
mortgage loans by the Servicer during the most recent calendar year then ended
under servicing agreements (including this Servicing Agreement) substantially
similar to this Servicing Agreement and that such examination, which has been
conducted substantially in compliance with the audit guide for audits of
non-supervised mortgagees approved by the Department of Housing and Urban
Development for use by independent public accountants (to the extent that the
procedures in such audit guide are applicable to the servicing obligations set
forth in such agreements), has disclosed no items of noncompliance with the
provisions of this Servicing Agreement which, in the opinion of such firm, are
material, except for such items of non compliance as shall be set forth in such
report. In rendering such statement, such firm may rely, as to matters relating
to direct servicing of mortgage loans by Subservicers, upon comparable
statements for examinations conducted substantially in the manner described
above (rendered within one year of such statement) of independent public
accountants with respect to the related Subservicer. For purposes of such
statement, such firm may conclusively assume that all servicing agreements among
the Company and the Servicer relating to home equity mortgage loans are
substantially similar one to another except for any such servicing agreement
which, by its terms, specifically states otherwise.
SECTION 3.12. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
Whenever required by statute or regulation, the Servicer shall provide
to the Credit Enhancer, any Securityholder upon reasonable request (or a
regulator for a Securityholder) or the Indenture Trustee, reasonable access to
the documentation regarding the Mortgage Loans such access being afforded
without charge but only upon reasonable request and during normal business hours
at the offices of the Servicer. Nothing in this Section 3.12 shall derogate from
the obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors and the failure of the
Servicer to provide access as provided in this Section 3.12 as a result of such
obligation shall not constitute a breach of this Section 3.12.
SECTION 3.13. Maintenance of Certain Servicing Insurance Policies.
The Servicer shall during the term of its service as servicer maintain
in force (i) a policy or policies of insurance covering errors and omissions in
the performance of its obligations as servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and bond shall be at least equal to the coverage that would be required
by FNMA or FHLMC, whichever is greater, for Persons performing servicing for
mortgage loans purchased by such entity.
SECTION 3.14. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Servicer shall prepare and deliver all federal and state
information reports when and as required by all applicable state and federal
income tax laws. In particular, with respect to the requirement under Section
6050J of the Code to the effect that the Servicer or Subservicer shall make
reports of foreclosures and abandonments of any mortgaged property for each year
beginning in ____, the Servicer or Subservicer shall file reports relating to
each instance occurring during the previous calendar year in which the Servicer
(i) on behalf of the Company, acquires an interest in any Mortgaged Property
through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any
Mortgaged Property has been abandoned. The reports from the Servicer or
Subservicer shall be in form and substance sufficient to meet the reporting
requirements imposed by Section 6050J and Section 6050H (reports relating to
mortgage interest received) of the Code.
SECTION 3.15. Optional Repurchase of Defaulted Mortgage Loans.
Notwithstanding any provision in Section 3.07 to the contrary, the
Servicer may repurchase any Mortgage Loan delinquent in payment for a period of
60 days or longer for a price equal to the Repurchase Price.
ARTICLE IV
SERVICING CERTIFICATE
SECTION 4.01. Statements to Securityholders.
(a) With respect to each Payment Date, the Servicer shall forward to
the Indenture Trustee and the Indenture Trustee pursuant to Section 3.26 of the
Indenture shall forward or cause to be forwarded by mail to each
Certificateholder, Noteholder, the Credit Enhancer, the Depositor, the Owner
Trustee, the Certificate Paying Agent and each Rating Agency, a statement
setting forth the following information as to the Notes and Certificates, to the
extent applicable:
(i) the aggregate amount of (a) Security Interest Collections with
respect to the Notes and the Certificates, (b) aggregate Security Principal
Collections with respect to the Notes and the Certificates and (c) Security
Collections for the related Collection Period with respect to the Notes and
the Certificates;
(ii) the amount of such distribution to the Securityholders of the
Notes and the Certificates applied to reduce the principal balance thereof
and separately stating the portion thereof in respect of the Accelerated
Principal Distribution Amount and the amount to be deposited in the Funding
Account on such Payment Date;
(iii) the amount of such distribution to the Securityholders of the
Notes and the Certificates allocable to interest and separately stating the
portion thereof in respect of overdue accrued interest;
(iv) the Credit Enhancement Draw Amount, if any, for such Payment Date
and the aggregate amount of prior draws thereunder not yet reimbursed;
(v) the aggregate Principal Balance of (a) the ________ Loans, (b) the
______ Loans, (c) the _________ Loans, as of the end of the preceding
Collection Period and (d) all of the Mortgage Loans;
(vi) the number and aggregate Principal Balances of Mortgage Loans (a)
as to which the Minimum Monthly Payment is delinquent for 30-59 days, 60-89
days, 90-179 days and 180 or more days, respectively and (b) that have
become REO, in each case as of the end of the preceding Collection Period;
PROVIDED, HOWEVER, that such information will not be provided on the
statements relating to the first Payment Date;
(vii) the Weighted Average Net Mortgage Rate for the related Collection
Period and the Weighted Average Net Mortgage Rate for (a) the ________
Loans, (b) the _______Loans and (c) the _________ Loans for the related
Collection Period;
(viii) the Special Capital Distribution Amount and the Required Special
Capital Distribution Amount, in each case as the end of the related
Collection Period; and
(ix) the aggregate amount of Additional Loans acquired during the
previous Collection Period with amounts in respect of Net Principal
Collections from the Funding Account;
(x) the aggregate Liquidation Loss Amounts with respect to the related
Collection Period, the amount of any remaining Carryover Loss Amount with
respect to the Notes and Certificates, respectively, and the aggregate of
the Liquidation Loss Amounts from all Collection Periods to date expressed
as a percentage of the sum of (a) the Cut-Off Date Pool Balance and (b) the
amount by which the Pool Balance as of the latest date that the Additional
Loans have been transferred to the Company exceeds the Cut-Off Date Pool
Balance;
(xi) any unpaid interest on the Notes and Certificates, respectively,
after such Distribution Date;
(xii) the aggregate Principal Balance of each Class of Notes and of the
Certificates after giving effect to the distribution of principal on such
Payment Date;
(xiii) the respective Security Percentage applicable to the Notes and
Certificates, after application of payments made on such Payment Date; and
(xiv) the amount distributed pursuant to Section 3.05(a)(xi) of the
Indenture on such Payment Date.
In the case of information furnished pursuant to clauses (ii) and (iii)
above, the amounts shall be expressed as an aggregate dollar amount per Note or
Certificate with a $1,000 denomination.
Prior to the close of business on the Business Day next succeeding each
Determination Date, the Servicer shall furnish a written statement to the
Company, the Owner Trustee, the Depositor, the Certificate Paying Agent and the
Indenture Trustee setting forth (i) all the foregoing information, (ii) the
aggregate amounts required to be withdrawn from the Collection Account and
deposited into the Payment Account on the Business Day preceding the Payment
Date pursuant to Section 3.03 and (iii) the amounts (A) withdrawn from the
Payment Account and deposited to the Funding Account pursuant to Section 8.02(b)
of the Indenture and (B) withdrawn from the Funding Account and deposited to the
Collection Account pursuant to Section 8.02(c)(i) of the Indenture. The
determination by the Servicer of such amounts shall, in the absence of obvious
error, be presumptively deemed to be correct for all purposes hereunder and the
Owner Trustee and Indenture Trustee shall be protected in relying upon the same
without any independent check or verification. In addition, upon the Company's
written request, the Servicer shall promptly furnish information reasonably
requested by the Company that is reasonably available to the Servicer to enable
the Company to perform its federal and state income tax reporting obligations.
ARTICLE V
DISTRIBUTION AND PAYMENT ACCOUNTS
SECTION 5.01. Distribution Account.
The Servicer shall establish and maintain a separate trust account (the
"Distribution Account") titled "[National City Mortgage Capital LLC MBN] Trust
Series 20__-__, [for the benefit of the Noteholders, the Certificateholders and
the Credit Enhancer pursuant to the Indenture, dated as of _______________,
between [National City Mortgage Capital LLC MBN] Trust Series 20__-__ and [Name
of Indenture Trustee]. The Distribution Account shall be an Eligible Account. On
the Business Day prior to each Payment Date, (i) amounts deposited into the
Distribution Account pursuant to Section 3.03(i) hereof will be distributed by
the Servicer in accordance with Section ____ of the [Trust] Agreement, and (ii)
the portion of such amounts then distributable with respect to the Mortgage
Collateral shall be deposited into the Payment Account. [The Servicer shall
invest or cause the institution maintaining the Distribution Account to invest
the funds in the Distribution Account in Eligible Investments designated in the
name of the National City Mortgage Co., which shall mature not later than the
Business Day next preceding the Payment Date next following the date of such
investment (except that (i) any investment in the institution with which the
Distribution Account is maintained may mature on such Payment Date and (ii) any
other investment may mature on such Payment Date if the Servicer shall advance
funds on such Payment Date to the Payment Account in the amount payable on such
investment on such Payment Date, pending receipt thereof to the extent necessary
to make distributions on the Securities) and shall not be sold or disposed of
prior to maturity. All income and gain realized from any such investment shall
be for the benefit of the Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any
such investments shall be deposited in the Distribution Account by the Servicer
out of its own funds immediately as realized.]
SECTION 5.02. Payment Account.
The Indenture Trustee shall establish and maintain a separate trust
account (the "Payment Account") titled "__________________________________, as
Indenture Trustee, for the benefit of the Noteholders, the Certificate Paying
Agent and the Credit Enhancer pursuant to the Indenture, dated as of
_______________, between [National City Mortgage Capital LLC MBN] Trust Series
20__-___ and __________________________________". The Payment Account shall be
an Eligible Account. On each Payment Date, amounts on deposit in the Payment
Account will be distributed by the Indenture Trustee in accordance with Section
3.05 of the Indenture. The Indenture Trustee shall, upon written request from
the Servicer, invest or cause the institution maintaining the Payment Account to
invest the funds in the Payment Account in Eligible Investments designated in
the name of the Indenture Trustee, which shall mature not later than the
Business Day next preceding the Payment Date next following the date of such
investment (except that (i) any investment in the institution with which the
Payment Account is maintained may mature on such Payment Date and (ii) any other
investment may mature on such Payment Date if the Indenture Trustee shall
advance funds on such Payment Date to the Payment Account in the amount payable
on such investment on such Payment Date, pending receipt thereof to the extent
necessary to make distributions on the Securities) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Servicer and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments shall be deposited in the Payment Account by the
Servicer out of its own funds immediately as realized.
ARTICLE VI
THE SERVICER
SECTION 6.01. Liability of the Servicer.
The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically imposed upon and undertaken by the Servicer
herein.
SECTION 6.02. Merger of Consolidation of, or Assumption of the
Obligations of, the Servicer.
Any corporation into which the Servicer may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Servicer shall be a party, or any
corporation 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.
The Servicer may assign its rights and delegate its duties and
obligations under this Servicing Agreement; PROVIDED that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of FNMA or FHLMC, is reasonably satisfactory to the
Indenture Trustee (as pledgee of the Mortgage Collateral), the Company and the
Credit Enhancer, is willing to service the Mortgage Loans and executes and
delivers to the Indenture Trustee and the Company an agreement, in form and
substance reason ably satisfactory to the Credit Enhancer, the Indenture Trustee
and the Company, which contains an assumption by such Person of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Servicing Agreement; PROVIDED
further that each Rating Agency's rating of the Securities in effect immediately
prior to such assignment and delegation will not be qualified, reduced, or
withdrawn as a result of such assignment and delegation (as evidenced by a
letter to such effect from each Rating Agency) or considered to be below
investment grade without taking into account the Credit Enhancement Instrument.
SECTION 6.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees
or agents of the Servicer shall be under any liability to the Company, the
Issuer, the Owner Trustee, the Indenture Trustee or the Securityholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Servicing Agreement, PROVIDED, HOWEVER, that this provision
shall not protect the Servicer or any such Person against any liability which
would otherwise be imposed by reason of its willful misfeasance, bad faith or
gross negligence in the performance of its duties hereunder or by reason of its
reckless disregard of its obligations and duties hereunder. The Servicer and any
director or officer or 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 and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Company and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Servicing Agreement or the
Securities, including any amount paid to the Owner Trustee or the Indenture
Trustee pursuant to Section 6.06(b), other than any loss, liability or expense
related to any specific Mortgage Loan or Mortgage Loans (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Servicing Agreement) and any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or gross negligence in the performance of its
duties hereunder or by reason of its reckless disregard of its obligations and
duties 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 Servicing Agreement, and
which in its opinion may involve it in any expense or liability; PROVIDED,
HOWEVER, that the Servicer may in its sole discretion undertake any such action
which it may deem necessary or desirable in respect of this Servicing Agreement,
and the rights and duties of the parties hereto and the interests of the
Securityholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Company, and the Servicer shall be entitled to be
reimbursed therefor. The Servicer's right to indemnity or reimbursement pursuant
to this Section 6.03 shall survive any resignation or termination of the
Servicer pursuant to Section 6.04 or 7.01 with respect to any losses, expenses,
costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or termination).
SECTION 6.04. Servicer Not to Resign.
Subject to the provisions of Section 6.02, the Servicer shall not
resign from the obligations and duties hereby imposed on it except (i) upon
determination that the performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it or its subsidiaries or
Affiliates, the other activities of the Servicer so causing such a conflict
being of a type and nature carried on by the Servicer or its subsidiaries or
Affiliates at the date of this Servicing Agreement or (ii) upon satisfaction of
the following conditions: (a) the Servicer has proposed a successor servicer to
the Company, the Administrator and the Indenture Trustee in writing and such
proposed successor servicer is reasonably acceptable to the Company, the
Administrator, the Indenture Trustee and the Credit Enhancer; (b) each Rating
Agency shall have delivered a letter to the Company, the Credit Enhancer and the
Indenture Trustee prior to the appointment of the successor servicer stating
that the proposed appointment of such successor servicer as Servicer hereunder
will not result in the reduction or withdrawal of the then current rating of the
Securities; and (c) such proposed successor servicer is reasonably acceptable to
the Credit Enhancer, as evidenced by a letter to the Company and the Indenture
Trustee; PROVIDED, HOWEVER, that no such resignation by the Servicer shall
become effective until such successor servicer or, in the case of (i) above, the
Indenture Trustee, as pledgee of the Mortgage Collateral, shall have assumed the
Servicer's responsibilities and obligations hereunder or the Indenture Trustee,
as pledgee of the Mortgage Collateral, shall have designated a successor
servicer in accordance with Section 7.02. Any such resignation shall not relieve
the Servicer of responsibility for any of the obligations specified in Sections
7.01 and 7.02 as obligations that survive the resignation or termination of the
Servicer. The Servicer shall have no claim (whether by subrogation or otherwise)
or other action against any Securityholder or the Credit Enhancer for any
amounts paid by the Servicer pursuant to any provision of this Servicing
Agreement. Any such determination permitting the resignation of the Servicer
shall be evidenced by an Opinion of Counsel to such effect delivered to the
Indenture Trustee and the Credit Enhancer.
SECTION 6.05. Delegation of Duties.
In the ordinary course of business, the Servicer at any time may
delegate any of its duties hereunder to any Person, including any of its
Affiliates, who agrees to conduct such duties in accordance with standards
comparable to those with which the Servicer complies pursuant to Section 3.01.
Such delegation shall not relieve the Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04.
SECTION 6.06. Servicer to Pay Indenture Trustee's and Owner Trustee's
Fees and Expenses; Indemnification.
(a) The Servicer covenants and agrees to pay to the Owner Trustee, the
Indenture Trustee and any co-trustee of the Indenture Trustee from time to time,
and the Owner Trustee, the Indenture Trustee and any such co-trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts created
under the Trust Agreement and the Indenture and in the exercise and performance
of any of the powers and duties under the Trust Agreement or the Indenture, as
the case may be, of the Owner Trustee, the Indenture Trustee and any co-trustee,
and the Servicer will pay or reimburse the Indenture Trustee and any co-trustee
upon request for all reasonable expenses, disbursements and advances incurred or
made by the Indenture Trustee or any co-trustee in accordance with any of the
provisions of this Servicing Agreement except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Servicer agrees to indemnify the Indenture Trustee and the
Owner Trustee for, and to hold the Indenture Trustee and the Owner Trustee, as
the case may be, harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on its part, arising out of, or in
connection with, the acceptance and administration of the Company and the assets
thereof, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against any claim in connection with the exercise
or performance of any of its powers or duties under any Basic Document, provided
that:
(i) with respect to any such claim, the Indenture Trustee or Owner
Trustee, as the case may be, shall have given the Servicer written notice
thereof promptly after the Indenture Trustee or Owner Trustee, as the case
may be, shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Company, the
Indenture Trustee or Owner Trustee, as the case may be, shall cooperate and
consult fully with the Servicer in preparing such defense; and
(iii) notwithstanding anything in this Servicing Agreement to the
contrary, the Servicer shall not be liable for settlement of any claim by
the Indenture Trustee or the Owner Trustee, as the case may be, entered
into without the prior consent of the Servicer, which consent shall not be
unreasonably withheld.
No termination of this Servicing Agreement shall affect the obligations
created by this Section 6.06 of the Servicer to indemnify the Indenture Trustee
and the Owner Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Servicer in this Section 6.06(b) shall not pertain to any loss, liability or
expense of the Indenture Trustee or the Owner Trustee, including the costs and
expenses of defending itself against any claim, incurred in connection with any
actions taken by the Indenture Trustee or the Owner Trustee at the direction of
the Noteholders or Certificateholders, as the case may be, pursuant to the terms
of this Servicing Agreement.
ARTICLE VII
DEFAULT
SECTION 7.01. Servicing Default.
If any one of the following events ("Servicing Default") hall occur and
be continuing:
(i) Any failure by the Servicer to deposit in the Collection Account,
the Funding Account or Payment Account any deposit required to be made
under the terms of this Servicing Agreement which continues unremedied for
a period of five Business Days after the date upon which written notice of
such failure shall have been given to the Servicer by the Company, the
Issuer or the Indenture Trustee or to the Servicer, the Company, the Issuer
and the Indenture Trustee by the Credit Enhancer; or
(ii) Failure on the part of the Servicer duly to observe or perform in
any material respect any other covenants or agreements of the Servicer set
forth in the Securities or in this Servicing Agreement, which failure, in
each case, materially and adversely affects the interests of
Securityholders or the Credit Enhancer and which continues unremedied for a
period of 45 days after the date on which written notice of such failure,
requiring the same to be remedied, and stating that such notice is a
"Notice of Default" hereunder, shall have been given to the Servicer by the
Company, the Issuer or the Indenture Trustee or to the Servicer, the
Company, the Issuer and the Indenture Trustee by the Credit Enhancer; or
(iii) The entry against the Servicer of a decree or order by a court or
agency or supervisory authority having jurisdiction in the premises for the
appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding up or liquidation of its affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days;
or
(iv) The Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling 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 a decree or order of a court,
agency or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, liquidator or similar person in any
insolvency, readjustment of debt, marshalling 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, unbonded or unstayed for a period of
60 days; or 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 or reorganization statute, make an assignment for
the benefit of its creditors or voluntarily suspend payment of its
obligations; or
(v) Any failure by the Seller (so long as the Seller is the Servicer)
or the Servicer, as the case may be, to pay when due any amount payable by
it under the terms of the Insurance Agreement which continues unremedied
for a period of three (3) Business Days after the date upon which written
notice of such failure shall have been given to the Seller (so long as the
Seller is the Servicer) or the Servicer, as the case may be; or
(vi) Failure on the part of the Seller or the Servicer to duly perform
in any material respect any covenant or agreement set forth in the
Insurance Agreement, which failure in each case materially and adversely
affects the interests of the Credit Enhancer and continues unremedied for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Depositor,
the Indenture Trustee, the Seller or the Servicer, as the case may be, by
the Credit Enhancer. Then, and in every such case, other than that set
forth in (vi) hereof, so long as a Servicing Default shall not have been
remedied by the Servicer, either the Company, subject to the direction of
the Indenture Trustee as pledgee of the Mortgage Collateral, with the
consent of the Credit Enhancer, or the Credit Enhancer, by notice then
given in writing to the Servicer (and to the Company and the Issuer if
given by the Credit Enhancer) and in the case of the event set forth in
(vi) hereof, the Credit Enhancer with the consent of Securityholders at
least 51% of the aggregate Principal Balance of the Notes and the
Certificates may terminate all of the rights and obligations of the
Servicer as servicer under this Servicing Agreement other than its right to
receive servicing compensation and expenses for servicing the Mortgage
Loans hereunder during any period prior to the date of such termination and
the Company, subject to the direction of the Indenture Trustee as pledgee
of the Mortgage Collateral, with the consent of the Credit Enhancer, or the
Credit Enhancer may exercise any and all other remedies available at law or
equity. Any such notice to the Servicer shall also be given to each Rating
Agency, the Credit Enhancer, the Company and the Issuer. On or after the
receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Servicing Agreement, whether with respect to the
Securities or the Mortgage Loans or otherwise, shall pass to and be vested
in the Company, subject to the direction of the Indenture Trustee as
pledgee of the Mortgage Collateral, pursuant to and under this Section
7.01; and, without limitation, the Company is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate
to effect the purposes of such notice of termination, whether to complete
the transfer and endorsement of each Mortgage Loan and related documents,
or otherwise. The Servicer agrees to cooperate with the Company in
effecting the termination of the responsibilities and rights of the
Servicer hereunder, including, without limitation, the transfer to the
Indenture Trustee for the administration by it of all cash amounts relating
to the Mortgage Loans that shall at the time be held by the Servicer and to
be deposited by it in the Collection Account, or that have been deposited
by the Servicer in the Collection Account or thereafter received by the
Servicer with respect to the Mortgage Loans. All reasonable costs and
expenses (including, but not limited to, attorneys' fees) incurred in
connection with amending this Servicing Agreement to reflect such
succession as Servicer pursuant to this Section 7.01 shall be paid by the
predecessor Servicer (or if the predecessor Servicer is the Indenture
Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a payment on a Mortgage Loan which was due prior to the notice terminating
the Servicer's rights and obligations hereunder and received after such notice,
that portion to which the Servicer would have been entitled pursuant to Sections
3.03 and 3.09 as well as its Servicing Fee in respect thereof, and any other
amounts payable to the Servicer hereunder the entitlement to which arose prior
to the termination of its activities hereunder.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 7.01(i) or under Section 7.01(ii) after the applicable grace
periods specified in such Sections, shall not constitute a Servicer Default if
such delay or failure could not be prevented by the exercise of reasonable
diligence by the Servicer and such delay or failure was caused by an act of God
or the public enemy, acts of declared or undeclared war, public disorder,
rebellion or sabotage, epidemics, landslides, lightning, fire, hurricanes,
earthquakes, floods or similar causes. The pre ceding sentence shall not relieve
the Servicer from using reasonable efforts to perform its respective obligations
in a timely manner in accordance with the terms of this Servicing Agreement and
the Servicer shall provide the Indenture Trustee, the Credit Enhancer and the
Securityholders with notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations. The Servicer shall
immediately notify the Indenture Trustee, the Credit Enhancer and the Owner
Trustee in writing of any Servicer Default.
SECTION 7.02. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 7.01 or sends a notice pursuant to Section 6.04, the
Indenture Trustee on behalf of the Noteholders shall be the successor in all
respects to the Servicer in its capacity as servicer under this Servicing
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof. Nothing in this
Servicing Agreement or in the Trust Agreement shall be construed to permit or
require the Indenture Trustee to (i) succeed to the responsibilities, duties and
liabilities of the initial Servicer in its capacity as Seller under the Mortgage
Loan Purchase Agreement, (ii) be responsible or accountable for any act or
omission of the Servicer prior to the issuance of a notice of termination
hereunder, (iii) require or obligate the Indenture Trustee, in its capacity as
successor Servicer, to purchase, repurchase or substitute any Mortgage Loan,
(iv) fund any losses on any Eligible Investment directed by any other Servicer,
or (v) be responsible for the representations and warranties of the Servicer. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee on behalf
of the Mortgage Collateral holders may (in the situation described in clause
(i)) or shall (in the situation described in clause (ii)) appoint or petition a
court of competent jurisdiction to appoint any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer
having a net worth of not less than $10,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; PROVIDED that any such successor
Servicer shall be acceptable to the Credit Enhancer, as evidenced by the Credit
Enhancer's prior written consent which consent shall not be unreasonably
withheld and provided further that the appointment of any such successor
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Securities by the Rating Agencies. Pending appointment
of a successor to the Servicer hereunder, unless the Indenture Trustee is
prohibited by law from so acting, the Indenture Trustee shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the
Servicer would otherwise have received pursuant to Section 3.09 (or such lesser
compensation as the Indenture Trustee and such successor shall agree). The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Servicing Agreement prior
to its termination as Servicer (including, without limitation, the obligation to
purchase Mortgage Loans pursuant to Section 3.01, to pay any deductible under an
insurance policy pursuant to Section 3.04 or to indemnify the Indenture Trustee
pursuant to Section 6.06), nor shall any successor Servicer be liable for any
acts or omissions of the predecessor Servicer or for any breach by such Servicer
of any of its representations or warranties contained herein or in any related
document or agreement. The Indenture Trustee and such successor shall take such
action, consistent with this Servicing Agreement, as shall be necessary to
effectuate any such succession.
(b) Any successor, including the Indenture Trustee on behalf of the
Noteholders, to the Servicer as servicer shall during the term of its service as
servicer (i) continue to service and administer the Mortgage Loans for the
benefit of the Securityholders, (ii) maintain in force a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
Servicer hereunder and a fidelity bond in respect of its officers, employees and
agents to the same extent as the Servicer is so required pursuant to Section
3.13.
(c) Any successor Servicer, including the Indenture Trustee on behalf
of the Mortgage Collateral holders, shall not be deemed in default or to have
breached its duties hereunder if the predecessor Servicer shall fail to deliver
any required deposit to the Collection Account or otherwise cooperate with any
required servicing transfer or succession hereunder.
SECTION 7.03. Notification to Securityholders.
Upon any termination or appointment of a successor to the Servicer
pursuant to this Article VII or Section 6.04, the Indenture Trustee shall give
prompt written notice thereof to the Securityholders, the Credit Enhancer, the
Company, the Issuer and each Rating Agency.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.01. Amendment.
This Servicing Agreement may be amended from time to time by the
parties hereto, provided that any amendment be accompanied by a letter from the
Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to the Securities and the consent of the
Credit Enhancer and the Indenture Trustee.
SECTION 8.02. GOVERNING LAW.
THIS SERVICING 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 8.03. 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 certified mail, return receipt requested, to (a) in the case of the Servicer,
[Name and Address of Servicer], (b) in the case of the Credit Enhancer,
________________, ________, ______________, Attention: _________________,
___________________________, (c) in the case of [Moody's, ___________, 4th
Floor, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000], (d) in the case of [Standard
& Poor's, 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group], (e) in the case of the Owner Trustee,
the Corporate Trust Office, and (f) in the case of the Issuer, to [National City
Mortgage Capital LLC MBN] Trust Series 20__-___, c/o ----------------------,
------------------, ----------, --------------, Attention:
__________________________, with a copy to the Administrator at ______________
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. [Any notice required or permitted to be
mailed to a Securityholder shall be given by first class mail, postage prepaid,
at the address of such Securityholder as shown in the Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Securityholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to delivery such
notice or document to any Rating Agency.]
SECTION 8.04. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Servicing Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Servicing Agreement or of the Securities or the rights of the
Securityholders thereof.
SECTION 8.05. Third-Party Beneficiaries.
This Servicing Agreement will inure to the benefit of and be binding
upon the parties hereto, the Securityholders, the Credit Enhancer, the Owner
Trustee, the Indenture Trustee and their respective successors and permitted
assigns. Except as otherwise provided in this Servicing Agreement, no other
Person will have any right or obligation hereunder.
SECTION 8.06. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 8.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 8.08. Termination Upon Purchase by the Servicer or Liquidation
of All Mortgage Loans.
The respective obligations and responsibilities of the Servicer and the
Company created hereby shall terminate upon the last action required to be taken
by the Issuer pursuant to the Trust Agreement and by the Indenture Trustee
pursuant to the Indenture following the earlier of:
(i) the date on or before which the Indenture or Trust Agreement is
terminated, or
(ii) the purchase by the Servicer from the Company of all Mortgage
Loans and all property acquired in respect of any Mortgage Loan at a price
equal to the greater of (a) 100% of the unpaid Principal Balance of each
Mortgage Loan, plus accrued and unpaid interest thereon at the Weighted
Average Net Mortgage Rate up to the day preceding the Payment Date on which
such amounts are to be distributed to Securityholders, plus any amounts due
and owing to the Credit Enhancer under the Insurance Agreement and (b) the
fair market value of the Mortgage Loans as determined by two bids from
competitive participants in the adjustable home equity loan market.
The right of the Servicer to purchase the assets of the Company
pursuant to clause (ii) above is conditioned upon the Pool Balance as of the
Final Scheduled Payment Date being less than ten percent of the aggregate of the
Cut-Off Date Principal Balances of the Mortgage Loans. If such right is
exercised by the Servicer, the Servicer shall deposit the amount calculated
pursuant to clause (ii) above with the Indenture Trustee pursuant to Section
4.10 of the Indenture and, upon the receipt of such deposit, the Indenture
Trustee or relevant Custodian shall release to the Servicer, the files
pertaining to the Mortgage Loans being purchased.
The Servicer, at its expense, shall prepare and deliver to the
Indenture Trustee and the Owner Trustee for execution, at the time the Mortgage
Loans are to be released to the Servicer, appropriate documents assigning each
such Mortgage Loan from the Company to the Servicer or the appropriate party.
SECTION 8.09. Certain Matters Affecting the Indenture Trustee.
For all purposes of this Servicing Agreement, in the performance of any
of its duties or in the exercise of any of its powers hereunder, the Indenture
Trustee shall be subject to and entitled to the benefits of Article VI of the
Indenture.
SECTION 8.10. Authority of the Administrator.
Each of the parties to this Agreement acknowledges that the Issuer and
the Owner Trustee have each appointed the Administrator to act as its agent to
perform the duties and obligations of the Issuer hereunder. Unless otherwise
instructed by the Issuer or the Owner Trustee, copies of all notices, requests,
demands and other documents to be delivered to the Issuer or the Owner Trustee
pursuant to the terms hereof shall be delivered to the Administrator. Unless
otherwise instructed by the Issuer or the Owner Trustee, all notices, requests,
demands and other documents to be executed or delivered, and any action to be
taken, by the Issuer or the Owner Trustee pursuant to the terms hereof may be
executed, delivered and/or taken by the Administrator pursuant to the
Administration Agreement.
IN WITNESS WHEREOF, the Servicer and the Company have caused this
Servicing Agreement to be duly executed by their respective officers or
representatives all as of the day and year first above written.
NATIONAL CITY MORTGAGE CO., as Servicer
By: ___________________________________
Title:
NATIONAL CITY MORTGAGE CAPITAL LLC
as Company
By: ___________________________________
Title:
EXHIBIT D
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with your administration of the Mortgage Collateral, we
request the release of the Mortgage File described below.
Servicing Agreement Dated: Series #: Account #: Pool #: Loan #:
Borrower Name(s): Reason for Document Request: (circle one) Mortgage Loan
Prepaid in Full Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in
connection with such payments which are required to be deposited have been or
will be so deposited as provided in the Servicing Agreement."
__________________________________
NATIONAL CITY MORTGAGE CO.
Authorized Signature
******************************************************************
TO CUSTODIAN/INDENTURE TRUSTEE:
Please acknowledge this request, and check off documents being enclosed
with a copy of this form. You should retain this form for your files in
accordance with the terms of the Servicing Agreement. Enclosed Documents: [ ]
Promissory Note [ ] Primary Insurance Policy [ ] Mortgage or Deed of Trust [ ]
Assignment(s) of Mortgage or Deed of Trust [ ] Title Insurance Policy [ ] Other:
___________________________
Name: ___________________________
Title: ___________________________
Date: ___________________________
