Exhibit 99.14
Execution Copy
4/24/06
XXXXXX BROTHERS BANK, FSB
PURCHASER
AND
XXXXX FARGO BANK, N.A.
COMPANY
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SELLER'S WARRANTIES AND SERVICING AGREEMENT
DATED AS OF APRIL 1, 2006
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FIXED RATE MORTGAGE LOANS
WFHM SERIES 2006-W26 AND 2006-W27
TABLE OF CONTENTS
ARTICLE I ................................................................. 1
DEFINITIONS ............................................................... 1
ARTICLE II ................................................................ 13
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES;
BOOKS AND RECORDS;CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS .............. 13
ARTICLE III ............................................................... 17
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH ........................ 17
ARTICLE IV ................................................................ 35
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS ............................ 35
ARTICLE V ................................................................. 51
PAYMENTS TO PURCHASER ..................................................... 51
ARTICLE VI ................................................................ 53
GENERAL SERVICING PROCEDURES .............................................. 53
ARTICLE VII ............................................................... 58
COMPANY TO COOPERATE ...................................................... 58
ARTICLE VIII .............................................................. 58
THE COMPANY ............................................................... 59
ARTICLE IX ................................................................ 60
i
SECURITIZATION TRANSACTIONS ............................................... 60
ARTICLE X ................................................................. 71
DEFAULT ................................................................... 71
ARTICLE XI ................................................................ 72
TERMINATION ............................................................... 72
ARTICLE XII ............................................................... 73
MISCELLANEOUS PROVISIONS .................................................. 73
EXHIBITS
Exhibit A Mortgage Loan Schedule
(WFHM 2006-W26)
Exhibit A-1 Mortgage Loan Schedule
(WFHM 2006-W27)
Exhibit B Custodial Agreement
Exhibit C Contents of Custodial Mortgage File,
Retained Mortgage File and Servicing File
Exhibit D Contents of the Data File
Exhibit E Custodial Account Certifications
Exhibit F Escrow Account Certifications
Exhibit G Servicing Criteria
Exhibit H Sarbanes Certification
Exhibit I Form of Assignment, Assumption and
Recognition Agreement
ii
This is a Seller's Warranties and Servicing Agreement for fixed rate
residential first lien mortgage loans, dated and effective as of April 1, 2006
and is executed between Xxxxxx Brothers Bank, FSB, as purchaser (the
"Purchaser"), and Xxxxx Fargo Bank, N.A., as seller and servicer (the
"Company").
WITNESSETH
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser certain pools of first lien fixed
rate mortgage loans (each a "Pool" and collectively, the "Mortgage Loans") which
have an aggregate unpaid scheduled principal balance as of the close of business
on the Cut-off Date, after deduction of payments due on or before such date, as
indicated on the Mortgage Loan Schedules, which are annexed hereto as Exhibit A
and Exhibit A-1;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedules; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Adjustment Date: As to each adjustable rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note.
Agency/Agencies: Xxxxxx Xxx, Xxxxxxx Mac or GNMA, or any of them as
applicable.
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Agency Sale: Any sale or transfer of some or all of the Mortgage Loans by
the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
Agreement: This Seller's Warranties and Servicing Agreement and all
exhibits hereto, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property; provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
appraisal made in connection with the origination of such Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS, including assignment of the MIN
Number which will appear either on the Mortgage or the Assignment of Mortgage to
MERS.
Assignment of Mortgage Note and Pledge Agreement: With respect to a
Cooperative Loan, an assignment of the Mortgage Note and Pledge Agreement.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the Proprietary Lease sufficient under the laws of the
jurisdiction wherein the related Cooperative Apartment is located to effect the
assignment of such Proprietary Lease.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the parties
are located are authorized or obligated by law or executive order to be closed.
Closing Date: April 26, 2006.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: Each of those certain letter agreements, each dated
April 5, 2006, between the Company and the Purchaser.
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Company: Xxxxx Fargo Bank, N.A., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
Company Information: As defined in Section 9.01(e)(i)(A).
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Cooperative: The entity that holds title (fee or an acceptable leasehold
estate) to all of the real property that the related Project comprises,
including the land, separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) the
Cooperative, (ii) the seller of the Cooperative Apartment and (iii) the Company,
if the Cooperative Loan is a refinanced Mortgage Loan, (b) filings of financing
statements and (c) the deed of the Project into the Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by Cooperative Shares and
a Proprietary Lease granting exclusive rights to occupy the related Cooperative
Apartment.
Cooperative Shares: The shares of stock issued by a Cooperative, owned by
the Mortgagor, and allocated to a Cooperative Apartment.
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.6c, Appendix
E, revised January 1, 2006 (excluding New Jersey "Covered Home Loans" as that
term is defined in clause (1) of that term in the New Jersey Home Ownership
Security Act of 2002).
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.
Custodial Agreement: The agreement governing the retention of the originals
of each Mortgage Note, Assignment of Mortgage and other Mortgage Loan Documents,
if applicable, a form of which is annexed hereto as Exhibit B.
Custodial Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 1 through 5 of Exhibit
C attached hereto, which have been delivered to the Custodian as of the Closing
Date.
Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.
Cut-off Date: April 1, 2006.
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Data File: The electronic data file prepared by the Company for each Pool
and delivered to the Purchaser including the data fields set forth on Exhibit D
with respect to each Mortgage Loan.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company
in accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The first day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of such Remittance Date and
ending on the first day of the month of such Remittance Date.
Eligible Deposit Account: An account that is maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution.
Eligible Institution: Any of the following:
(i) an institution whose:
(A) commercial paper, short-term debt obligations, or other short-term
deposits are rated at least "A-1+" or long-term unsecured debt obligations
are rated at least "AA-" by S&P, if the amounts on deposit are to be held
in the account for no more than 365 days; or
(B) commercial paper, short-term debt obligations, demand deposits, or
other short-term deposits are rated at least "A-2" by S&P, if the amounts
on deposit are to be held in the account for no more than thirty (30) days
and are not intended to be used as credit enhancement. Upon the loss of the
required rating set forth in this clause (ii), the accounts shall be
transferred immediately to accounts which have the required rating.
Furthermore, commingling by the Servicer is acceptable at the A-2 rating
level if the Company is a bank, thrift, or depository and provided the
Company has the capability to immediately segregate funds and commence
remittance to an Eligible Deposit Account upon a downgrade; or
(ii) the corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar
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to Title 12 of the U.S. Code of Federal Regulation Section 9.10(b), which,
in either case, has corporate trust powers and is acting in its fiduciary
capacity.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, or any successor
thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Remittance Date: May 18, 2006.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which is added to the
Index in order to determine the related Mortgage Interest Rate, as set forth in
the related Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under
the Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law or (c) a Mortgage Loan categorized
as "High Cost" pursuant to the Standard & Poor's Glossary for File Format for
LEVELS(R) Version 5.6c, Appendix E, revised January 1, 2006 (excluding New
Jersey "Covered Home Loans" as that term is defined in clause (1) of that term
in the New Jersey Home Ownership Security Act of 2002).
Index: With respect to any adjustable rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the interest thereon.
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property,
including LPMI Proceeds, if applicable.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the related
Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of
the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.
LPMI Fee: With respect to each LPMI Loan, the portion of the Mortgage
Interest Rate as set forth o the related Mortgage Loan Schedule (which shall be
payable solely from the interest portion of Monthly Payments, Insurance
Proceeds, Condemnation Proceeds or Liquidation Proceeds) which shall be used to
pay the premium due on the related LPMI Policy.
LPMI Loan: A Mortgage Loan with an LPMI Policy.
LPMI Policy: A PMI Policy evidenced by an electronic form and certificate
number issued by a Qualified Insurer, as required by this Agreement with respect
to certain Mortgage Loans. The premiums on an LPMI Policy are paid by the
Company from payments of interest made by the Mortgagor.
LPMI Proceeds: Proceeds of any LPMI Policy.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan that has been originated in the name
of or assigned to MERS and registered with MERS on the MERS System
MERS System: The system of recording transfers of mortgages electronically
maintained by MERS.
MIN: Mortgage Identification Number used to identify mortgage loans
registered under MERS.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
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Monthly Payment: The scheduled monthly payment of principal and interest on
a Mortgage Loan, or in the case of an Interest Only Mortgage Loan, payments of
(i) interest or (ii) principal and interest, as applicable, on such Mortgage
Loan during the interest only period.
Mortgage: The mortgage, deed of trust or other instrument and riders
thereto securing a Mortgage Note, which creates a first lien on an
unsubordinated estate in fee simple in real property securing the Mortgage Note,
or the Pledge Agreement securing the Mortgage Note for a Cooperative Loan.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual mortgage loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Retained Mortgage File, the Custodial Mortgage File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the documents
listed on Exhibit C attached hereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the sum of (a) the Servicing Fee Rate and
minus (b) with respect to LPMI Loans, the LPMI Fee.
Mortgage Loan Schedule: For each Pool, a schedule of Mortgage Loans annexed
hereto as Exhibit A and Exhibit A-1, respectively, such schedule setting forth
the following information with respect to each Mortgage Loan: (1) the Company's
Mortgage Loan number; (2) the city state and zip code of the Mortgaged Property;
(3) a code indicating whether the Mortgaged Property is a single family
residence, two-family residence, three-family residence, four-family residence,
planned unit development, Cooperative Apartment or condominium; (4) the current
Mortgage Interest Rate; (5) the current net Mortgage Interest Rate; (6) the
current Monthly Payment; (7) the Gross Margin; (8) the original term to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Adjustment Date; (13) the lifetime Mortgage
Interest Rate cap; (14) whether the Mortgage Loan is convertible or not; (15) a
code indicating the mortgage guaranty insurance company; (16) a code indicating
whether the Mortgage Loan is a Cooperative Loan; (17) code indicating whether
the loan is subject to LPMI; and (18) the Servicing Fee Rate.
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Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage and riders thereto.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note, or with respect to a Cooperative Loan, the related
Cooperative Apartment.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and certified by the Treasurer or the Secretary or one
of the Assistant Treasurers or Assistant Secretaries of the Company, and
delivered to the Purchaser as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each adjustable rate Mortgage Loan, the
maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date pursuant to the terms of the Mortgage Note.
Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Pledge Agreement: With respect to a Cooperative Loan, the specific
agreement creating a first lien on and pledge of the Cooperative Shares and the
appurtenant Proprietary Lease.
Pledge Instruments: With respect to a Cooperative Loan, the Stock Power,
the Assignment of the Proprietary Lease and the Assignment of the Mortgage Note
and Pledge Agreement.
PMI Policy: A policy of primary mortgage guaranty insurance evidenced by an
electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans. The premiums
on a PMI Policy may be paid by the Mortgagor or by the Company from its own
funds, without reimbursement. If the premiums are paid by the Company, the PMI
Policy is an LPMI Policy.
Prepayment Penalty: Payments calculated pursuant to the Underwriting
Guidelines and due on a Mortgage Loan as the result of a Principal Prepayment in
full of the Mortgage Loan, not otherwise due thereon in respect of principal or
interest, which are intended to be a disincentive to prepayment.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
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Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: The calendar month preceding the month in
which the related Remittance Date occurs.
Project: With respect to a Cooperative Loan, all real property owned by the
related Cooperative including the land, separate dwelling units and all common
areas.
Proprietary Lease: With respect to a Cooperative Loan, a lease on a
Cooperative Apartment evidencing the possessory interest of the Mortgagor in
such Cooperative Apartment.
Purchaser: Xxxxxx Brothers Bank, FSB, or its successor in interest or any
successor to the Purchaser under this Agreement as herein provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Company, in accordance with underwriting
guidelines designated by the Company ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Company within 180 days after origination; (iii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Company in origination of mortgage loans of the same type as the
Mortgage Loans for the Company's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Company on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Company; and (iv) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchased or post-purchased
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Company.
Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less
than, and not more than two percent (2%) greater, than the Mortgage Loan
Remittance Rate of the Deleted
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Mortgage Loan; (iii) have a remaining term to maturity not greater than and not
more than one year less than that of the Deleted Mortgage Loan; (iv) comply with
each representation and warranty set forth in Sections 3.01 and 3.02; and (v) be
of the same type as the Deleted Mortgage Loan.
Rating Agencies: Any nationally recognized statistical rating agency, or
its successor, including Standard & Poor's Ratings Services, Xxxxx'x Investors
Service, Inc. and Fitch Ratings.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Securitization Transaction, Agency Sale or Whole Loan
Transfer.
Reconstitution Agreement: The agreement or agreements entered into by the
Company and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with an Agency Sale, Whole Loan Transfer or
Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of an Agency Sale, Securitization Transaction or Whole
Loan Transfer pursuant to Section 9.01 hereof. The Reconstitution Date shall be
such date which the Purchaser shall designate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month, beginning with the
First Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
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REO Property: A Mortgaged Property acquired by the Company on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described in
Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser and the Company,
a price equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii)
interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate
from the date on which interest has last been paid and distributed to the
Purchaser through the last day of the month in which such repurchase takes
place, less amounts received or advanced in respect of such repurchased Mortgage
Loan which are being held in the Custodial Account for distribution in the month
of repurchase.
Retained Mortgage File: With respect to each Mortgage Loan, the file
consisting of the Mortgage Loan Documents listed as items 6 through 11 of
Exhibit C attached hereto, which is retained by the Company for the benefit of
the Purchaser in a custodial capacity only.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (a) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (b) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Servicer: As defined in Section 9.01(d)(iii).
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable attorney's
fees and disbursements) incurred in the performance by the Company of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property, (d) compliance with the obligations under
Section 4.08 (excluding the Company's obligation to pay the premiums on LPMI
Policies) and (e) force placing flood insurance in accordance with Section 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to
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interest from Liquidation Proceeds, to the extent permitted by Section 4.05) of
such Monthly Payment collected by the Company, or as otherwise provided under
Section 4.05.
Servicing Fee Rate: 0.875% per annum per Mortgage Loan listed on Exhibit A
and 0.250% per annum per Mortgage Loans listed on Exhibit A-1.
Servicing File: With respect to each Mortgage Loan, the file consisting of
the Mortgage Loan Documents listed as items 12 through 27 of Exhibit C attached
hereto plus copies of all Mortgage Loan Documents contained in the Custodial
Mortgage File and the Retained Mortgage File, which are retained by the Company.
Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan and as of any date of
determination, (i) the principal balance of the Mortgage Loan at the Cut-off
Date after giving effect to payments of principal due on or before such date,
whether or not received, minus (ii) all amounts previously distributed to the
Purchaser with respect to the related Mortgage Loan representing payments or
recoveries of principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Stock Certificate: With respect to a Cooperative Loan, a certificate
evidencing ownership of the Cooperative Shares issued by the Cooperative.
Stock Power: With respect to a Cooperative Loan, an assignment of the Stock
Certificate or an assignment of the Cooperative Shares issued by the
Cooperative.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Subsidy Account: An account maintained by the Company specifically to hold
all Subsidy Funds to be applied to individual Subsidy Loans.
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Subsidy Funds: With respect to any Subsidy Loans, funds contributed by the
employer of a Mortgagor in order to reduce the payments required from the
Mortgagor for a specified period in specified amounts.
Subsidy Loan: Any Mortgage Loan subject to a temporary interest subsidy
agreement pursuant to which the monthly interest payments made by the related
Mortgagor will be less than the scheduled monthly interest payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
by the employer of the Mortgagor. Each Subsidy Loan will be identified as such
in the related Data File.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company.
Time$aver(R) Mortgage Loan: A Mortgage Loan which has been refinanced
pursuant to a Company program that allows a rate/term refinance of an existing
Company serviced loan with minimal documentation.
Underwriting Guidelines: The Company's underwriting guidelines, a copy of
which has been provided by the Company to the Purchaser.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Securitization Transaction or Agency Sale.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF CUSTODIAL MORTGAGE FILES; BOOKS AND
RECORDS;CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Custodial Mortgage
Files; Maintenance of Retained Mortgage File and Servicing Files.
The Company, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all the
right, title and interest of the Company in and to the Mortgage Loans. Pursuant
to Section 2.03, the Company has delivered the Custodial Mortgage File to the
Custodian.
The contents of each Retained Mortgage File not delivered to the Custodian
are and shall be held in trust by the Company for the benefit of the Purchaser
as the owner thereof. Additionally and separate to the Retained Mortgage File,
the Company shall maintain a Servicing File, for the sole purpose of servicing
the related Mortgage Loans, consisting of a copy of the contents of the
Custodial Mortgage File and the Retained Mortgage File. The possession of each
Servicing File and Retained Mortgage File held by the Company is at the will of
the
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Purchaser, and such retention and possession by the Company is in a custodial
capacity only. Upon the sale of the Mortgage Loans the ownership of each
Mortgage Note, the related Mortgage and the related Custodial Mortgage File,
Retained Mortgage File and Servicing File shall vest immediately in the
Purchaser, and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only in
such custodial capacity. The Company shall release its custody of the contents
of any Retained Mortgage File and Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans, in the case of the Servicing
File, or is in connection with a repurchase of any Mortgage Loan pursuant to
Section 3.03 or 6.02. All such costs associated with the release, transfer and
re-delivery to the Company shall be the responsibility of the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Company agrees that it will cause, the MERS(R) System to indicate that such
Mortgage Loans have been assigned by the Company to the Purchaser in accordance
with this Agreement by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
the information required by the MERS(R) System to identify the Purchaser as
beneficial owner of such Mortgage Loans.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all rights
arising out of the Mortgage Loans, including, but not limited to, all funds
received on or in connection with the Mortgage Loans, shall be received and held
by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Xxxxxx Mae or Xxxxxxx Mac
and records of periodic inspections as required by Section 4.13. To the extent
that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Company
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques
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so long as the Company complies with the requirements of the Xxxxxx Mae Selling
and Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Purchaser or its designee the related
Retained Mortgage File and Servicing File during the time the Purchaser retains
ownership of a Mortgage Loan and thereafter in accordance with applicable laws
and regulations.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any Person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such Person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. If the Company receives notification
of a transfer less than five (5) Business Days before the end of the related Due
Period, the Company's duties to remit and report to the new purchaser(s) as
required by Section 5 shall begin with the next Due Period. Such notification
must include a final schedule of Mortgage Loans transferred.
Section 2.03 Custodial Agreement; Delivery of Documents.
The Company has delivered to the Custodian those Mortgage Loan Documents
contained in each Custodial Mortgage File as required by Exhibit C to this
Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan Documents
in each Custodial Mortgage File pursuant to the Custodial Agreement, as
evidenced by the trust receipt and initial certification of the Custodian in the
form annexed to the Custodial Agreement. The Company shall be responsible for
recording the initial Assignments of Mortgage. The Purchaser will be responsible
for the fees and expenses of the Custodian.
Upon the occurrence of the events described in Section 9.01 and Section
11.02 of this Agreement or in the event the Company fails to allow the Purchaser
access to the Retained Mortgage File as required pursuant to Section 2.04 (each
such occurrence, a "Delivery Event"), the Company shall deliver to the Custodian
or any other party per written instructions from the Purchaser, the additional
documents from its Retained Mortgage File required to be delivered pursuant to
Section 9.01 herein within ten (10) Business Days. All of the provisions of this
Section 2.03 relating to a failure to deliver required documentation, delays in
such delivery and the delivery of defective documentation shall apply equally to
any obligation on the part of the Company to deliver documents which arises
after the Closing Date upon the occurrence of a Delivery Event.
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The Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian with
a certified true copy of any such document submitted for recordation within ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, which the Company is required to deliver at any time to the
Custodian in accordance with the terms of the Custodial Agreement or which the
Company is required to maintain in the Retained Mortgage File, the Company shall
deliver to the Custodian within 180 days of its submission for recordation, a
copy of such document and an Officer's Certificate, which shall (i) identify the
recorded document; (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay by the public recording office, (iii)
state the amount of time generally required by the applicable recording office
to record and return a document submitted for recordation, and (iv) specify the
date the applicable recorded document will be delivered to the Custodian. The
Company will be required to deliver the document to the Custodian by the date
specified in (iv) above. An extension of the date specified in (iv) above may be
requested from the Purchaser, which consent shall not be unreasonably withheld.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Company
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
Section 2.04 Examination of Mortgage Loan Documents.
Prior to the Closing Date, the Company shall deliver the Mortgage Loan
Documents included in the Custodial Mortgage File to the Custodian. The
Purchaser or a designee may review such Mortgage Loan Documents to verify that
the documents required to be included in each Custodial Mortgage File are
available. If a Custodial Mortgage File is incomplete or defective or a Mortgage
Loan does not conform to the requirements of this Agreement and such omissions
or defects cannot be cured prior to the Closing Date, the Mortgage Loan shall be
deleted from the related Mortgage Loan Schedule. If deleted, the Mortgage Loan
may be replaced, up to one (1) Business Day prior to the Closing Date, by one or
more substitute Mortgage Loans which satisfy the criteria set forth in this
Agreement.
The Company shall make the Retained Mortgage File available to the
Purchaser for examination at the Company's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Company. Such
examination may be made by the Purchaser or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time after the Closing Date upon prior
written notice to the Company. The fact that the Purchaser or any prospective
purchaser of the Mortgage Loans has conducted or has failed to conduct any
partial or complete
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examination of the Retained Mortgage File shall not affect the Purchaser's (or
any of its successor's) rights to demand repurchase, substitution or other
relief as provided under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of the
Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and
has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state
require licensing or qualification in order to conduct business of the
type conducted by the Company, and in any event the Company is in
compliance with the laws of any such state to the extent necessary to
ensure the enforceability of the related Mortgage Loan and the
servicing of such Mortgage Loan in accordance with the terms of this
Agreement; the Company has the full power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by
the Company and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences
the valid, binding and enforceable obligation of the Company; and all
requisite action has been taken by the Company to make this Agreement
valid and binding upon the Company in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Company, who is in the
business of selling and servicing loans, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by the Company
pursuant to this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts.
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Neither the execution and delivery of this Agreement, the acquisition
of the Mortgage Loans by the Company, the sale of the Mortgage Loans
to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement will conflict with or result in a breach of any of the
terms, articles of incorporation or by-laws or any legal restriction
or any agreement or instrument to which the Company is now a party or
by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Company or its property is subject, or impair the ability of
the Purchaser to realize on the Mortgage Loans, or impair the value of
the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of conventional residential
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the facilities,
procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans.
The Company is in good standing to sell mortgage loans to and service
mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event has
occurred, including but not limited to a change in insurance coverage,
which would make the Company unable to comply with Xxxxxx Mae or
Xxxxxxx Mac eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Company, for accounting
and tax purposes, as compensation for the servicing and administration
of the Mortgage Loans pursuant to this Agreement;
(f) Ability to Perform.
The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement. The Company is solvent and the sale of the Mortgage
Loans will not cause the Company to become insolvent. The sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of
the Company's creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance or in
the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the
Company, or in any material impairment of the right or ability of the
Company to carry on its business substantially as now conducted, or
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in any material liability on the part of the Company, or which would
draw into question the validity of this Agreement or the Mortgage
Loans or of any action taken or to be contemplated herein, or which
would be likely to impair materially the ability of the Company to
perform under the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Company of or compliance by the Company with
this Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;
(i) Selection Process.
The Mortgage Loans were selected from among the outstanding fixed rate
one- to four-family mortgage loans in the Company's mortgage banking
portfolio at the Closing Date as to which the representations and
warranties set forth in Section 3.02 could be made and such selection
was not made in a manner so as to affect adversely the interests of
the Purchaser;
(j) No Untrue Information.
Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any
untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;
(k) Sale Treatment.
The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(l) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the
Company's most recent financial statements;
(m) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation in
the connection with the sale of the Mortgage Loans; and
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(n) Fair Consideration.
The consideration received by the Company upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value of the Mortgage Loans.
Section 3.02 Representations and Warranties Regarding Individual Mortgage Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to the
Purchaser that as of the Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedules attached
hereto as Exhibit A and Exhibit A-1 and the information contained on
the respective electronic Data File delivered to the Purchaser is true
and correct;
(b) Payments Current.
No payment required under any Mortgage Loan will be thirty (30) days
or more delinquent on the Closing Date. No Mortgage Loan will have
been thirty (30) days delinquent more than one time within the twelve
(12) months prior to the Closing Date;
(c) No Outstanding Charges.
There are no defaults in complying with the terms of the Mortgages,
and all taxes, governmental assessments, insurance premiums, leasehold
payments, water, sewer and municipal charges, which previously became
due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and
payable. The Company has not advanced funds, or induced, or solicited
directly or indirectly, the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is later, to the day which precedes by one month the Due
Date of the first installment of principal and interest;
(d) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interests of the Purchaser and which the Mortgage Note has been
delivered to the Custodian. The substance of any such waiver,
alteration or modification has been approved by the issuer of any
related
20
PMI Policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the issuer of
any related PMI Policy and the title insurer, to the extent required
by the policy, and which assumption agreement is part of the Custodial
Mortgage File delivered to the Custodian and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses.
The Mortgage Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render
either the Mortgage Note or the Mortgage unenforceable, in whole or in
part, or subject to any right of rescission, set-off, counterclaim or
defense, including without limitation the defense of usury, and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(f) No Satisfaction of Mortgage.
Neither the Mortgage nor the Mortgage Note has been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or
rescission;
(g) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are genuine,
and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the
Mortgage Note, the Mortgage and any other related document had legal
capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note, the Mortgage and any other related document, and
the Mortgage Note, the Mortgage and any other related document have
been duly and properly executed by such parties. The Company has
reviewed all of the documents constituting the Retained Mortgage File
and Custodial Mortgage File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set
forth herein;
With respect to each Cooperative Loan, the Mortgage Note, the
Mortgage, the Pledge Agreement, and related documents are genuine, and
each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms. All parties to the Mortgage
Note, the Mortgage, the Pledge Agreement, the Proprietary Lease, the
Stock Power, Recognition Agreement and the Assignment of Proprietary
Lease had legal capacity to enter into the Mortgage Loan and to
21
execute and deliver such documents, and such documents have been duly
and properly executed by such parties;
(h) No Fraud.
All the documents executed in connection with the Mortgage Loan
including, but not limited to, the Mortgage Note and the Mortgage are
free of fraud and any misrepresentation, are signed by the persons
they purport to be signed by, and witnessed or, as appropriate,
notarized by the persons whose signatures appear as witnesses or
notaries, and each such document constitutes the valid and binding
legal obligation of the signatories and is enforceable in accordance
with its terms;
(i) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection and privacy, equal credit
opportunity, disclosure, or predatory and abusive lending laws
applicable to the Mortgage Loan have been complied with, and the
Company shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements. The
consummation of the transactions contemplated hereby will not violate
any such laws or regulations. All inspections, licenses and
certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the
use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have
been made or obtained from the appropriate authorities;
(j) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the
Mortgage Loan Schedule and consists of a contiguous parcel of real
property with a detached single family residence erected thereon, or a
two- to four-family dwelling, or an individual condominium unit in a
condominium project, or an individual unit in a planned unit
development, or a Cooperative Apartment, or a townhouse, provided,
however, that any condominium project or planned unit development
shall conform with the applicable Underwriting Guidelines regarding
such dwellings, and no residence or dwelling is a mobile home. As of
the respective appraisal date for each Mortgaged Property, no portion
of the Mortgaged Property was being used for commercial purposes,
except as allowed under the Underwriting Guidelines. If the Mortgaged
Property is a condominium unit or a planned unit development (other
than a de minimus planned unit development) such condominium or
planned unit development meets the requirements under the Underwriting
Guidelines;
(k) Valid First Lien.
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The Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged Property
and all installations and mechanical, electrical, plumbing, heating
and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with
respect to the foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the
date of recording acceptable to mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator
of the Mortgage Loan and (i) referred to or otherwise
considered in the appraisal made for the originator of the
Mortgage Loan and (ii) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting and enforceable first
lien and first priority security interest on the property
described therein and the Company has full right to sell and
assign the same to the Purchaser;
With respect to each Cooperative Loan, each Pledge Agreement
creates a valid, enforceable and subsisting first security
interest in the Cooperative Shares and Proprietary Lease, subject
only to (i) the lien of the related Cooperative for unpaid
assessments representing the Mortgagor's pro rata share of the
Cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees
and other assessments to which like collateral is commonly
subject and (ii) other matters to which like collateral is
commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge
Agreement; provided, however, that the appurtenant Proprietary
Lease may be subordinated or otherwise subject to the lien of any
mortgage on the Project;
(l) Full Disbursement of Proceeds.
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The Mortgage Loan has been closed and the proceeds of the Mortgage
Loan have been fully disbursed, except for escrows established or
improvements to the Mortgaged Property not completed prior to the
closing of the related Mortgage Loan, or created due to seasonal
weather conditions, as allowed under the Underwriting Guidelines, and
there is no requirement for future advances thereunder. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and
the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage
Note or Mortgage;
(m) Consolidation of Future Advances.
Any future advances made prior to the Cut-off Date, have been
consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a
single interest rate and single repayment term reflected on the
related Mortgage Loan Schedule. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first
lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable to Xxxxxx Xxx or Xxxxxxx Mac; the
consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan; the Company shall not make future
advances after the Cut-off Date;
(n) Ownership.
The Company is the sole owner of record and holder of the Mortgage
Loan and the related Mortgage Note and the Mortgage are not assigned
or pledged, and the Company has good and marketable title thereto and
has full right and authority to transfer and sell the Mortgage Loan to
the Purchaser. The Company is transferring the Mortgage Loan free and
clear of any and all encumbrances, liens, pledges, equities,
participation interests, claims, charges or security interests of any
nature encumbering such Mortgage Loan;
(o) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance company,
or similar institution which is supervised and examined by a federal
or state authority or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such
interest, were) (1) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state,
or (3) qualified to do business in
24
such state, or (4) federal savings and loan associations or national
banks having principal offices in such state, or (5) not doing
business in such state;
(p) LTV, PMI Policy.
Except as indicated on the related Mortgage Loan Schedule, no Mortgage
Loan has an LTV greater than 103%. Each Mortgage Loan with an LTV of
greater than 80% at the time of origination, a portion of the unpaid
principal balance of each Mortgage Loan is and will be insured as to
payment defaults by either an LPMI Policy or borrower-paid PMI Policy.
If the Mortgage Loan is insured by a PMI Policy for which the
Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise
terminated pursuant to the Homeowners Protection Act of 1998, 12 USC
Section 4901, et seq. All provisions of such PMI Policy have been and
are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. The Qualified Insurer has
a claims paying ability acceptable to Xxxxxx Mae or Xxxxxxx Mac. Any
Mortgage Loan subject to a PMI Policy obligates the Mortgagor or the
Company, as applicable, to maintain the PMI Policy and to pay all
premiums and charges in connection therewith;
(q) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance
policy (or in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are not
available, an opinion of counsel of the type customarily rendered in
such jurisdiction in lieu of title insurance) or other generally
acceptable form of policy of insurance acceptable to Xxxxxx Xxx or
Xxxxxxx Mac, issued by a title insurer acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Company, its successors
and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the
exceptions contained in clauses (1), (2) and (3) of Paragraph (k) of
this Section 3.02, and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and
Monthly Payment. The Company is the sole insured of such lender's
title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender's title insurance policy, and
no prior holder of the Mortgage, including the Company, has done, by
act or omission, anything which would impair the coverage of such
lender's title insurance policy;
(r) No Defaults.
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There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or
event of acceleration, and neither the Company nor its predecessors
have waived any default, breach, violation or event of acceleration;
(s) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that
under the law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage which are not
insured against by the title insurance policy referenced in Paragraph
(q) above;
(t) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy referenced in
Paragraph (q) above, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation;
(u) Payment Terms.
Except with respect to the Interest Only Mortgage Loans, principal
prepayments commenced no more than sixty (60) days after the funds
were disbursed to the Mortgagor in connection with the Mortgage Loan.
The Mortgage Loans have an original term to maturity of not more than
thirty (30) years, with interest payable in arrears on the first day
of each month. As to each adjustable rate Mortgage Loan on each
applicable Adjustment Date, the Mortgage Interest Rate will be
adjusted to equal the sum of the Index plus the applicable Gross
Margin, rounded up or down to the nearest multiple of 0.125% indicated
by the Mortgage Note; provided that the Mortgage Interest Rate will
not increase or decrease by more than the Periodic Interest Rate Cap
on any Adjustment Date, and will in no event exceed the maximum
Mortgage Interest Rate or be lower than the minimum Mortgage Interest
Rate listed on the related Mortgage Note for such Mortgage Loan. As to
each adjustable rate Mortgage Loan that is not an Interest Only
Mortgage Loan, each Mortgage Note requires a monthly payment which is
sufficient, during the period prior to the first adjustment to the
Mortgage Interest Rate, to fully amortize the outstanding principal
balance as of the first day of such period over the then remaining
term of such Mortgage Note and to pay interest at the related Mortgage
Interest Rate. As to each adjustable rate Mortgage Loan, if
26
the related Mortgage Interest Rate changes on an Adjustment Date or,
with respect to an Interest Only Mortgage Loan, on an Adjustment Date
following the related interest only period, the then outstanding
principal balance will be reamortized over the remaining life of such
Mortgage Loan. No Mortgage Loan contains terms or provisions which
would result in negative amortization;
(v) Customary Provisions.
The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of
the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including,
(i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure and upon
the exercise of such rights and remedies under the law, the holder of
the Mortgage and Mortgage Note will be able to deliver good and
merchantable title to the Mortgaged Property. There is no homestead or
other exemption available to a Mortgagor which would interfere with
the right to sell the Mortgaged Property at a trustee's sale or the
right to foreclose the Mortgage;
(w) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied under all applicable laws;
(x) No Additional Collateral.
The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding
Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in sub clause (k) above;
(y) Deeds of Trust.
In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and
no fees or expenses are or will become payable by the Mortgagee to the
trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(z) Acceptable Investment.
The Company has no knowledge of any circumstances or conditions with
respect to the Mortgage Loan, the Mortgaged Property, the Mortgagor or
the Mortgagor's credit standing that can reasonably be expected to
cause private institutional investors to regard the Mortgage Loan as
an unacceptable investment, cause the
27
Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan;
(aa) Transfer of Mortgage Loans.
If the Mortgage Loan is not a MERS Mortgage Loan, the Assignment of
Mortgage upon the insertion of the name of the assignee and recording
information is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(bb) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to
affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises was intended;
(cc) Collection Practices; Escrow Deposits.
The origination and collection practices used with respect to the
Mortgage Loan have been in accordance with Accepted Servicing
Practices, and have been in all material respects legal and proper.
With respect to escrow deposits and Escrow Payments, all such payments
are in the possession of the Company and there exist no deficiencies
in connection therewith for which customary arrangements for repayment
thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law. No escrow deposits or
Escrow Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(dd) No Condemnation.
There is no proceeding pending or to the best of the Company's
knowledge threatened for the total or partial condemnation of the
related Mortgaged Property;
(ee) The Appraisal.
The Mortgage Loan Documents contain an appraisal of the related
Mortgaged Property. As to each Time$aver(R) Mortgage Loan, the
appraisal may be from the original of the existing Company-serviced
loan, which was refinanced via such Time$aver(R) Mortgage Loan. The
appraisal was conducted by an appraiser who is licensed in the state
where the Mortgaged Property is located, and who had no interest,
direct or indirect, in the Mortgaged Property or in any loan made on
the security thereof; and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and
the appraiser both satisfy the applicable requirements of Title XI of
the Financial Institution Reform,
28
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(ff) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire
and such hazards as are covered under a standard extended coverage
endorsement and such other hazards as are customary in the area where
the Mortgaged Property is located pursuant to insurance policies
conforming to the requirements of Section 4.10, in an amount which is
at least equal to the lesser of (i) 100% of the insurable value, on a
replacement cost basis, of the improvements on the related Mortgaged
Property, and (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds
of such insurance shall be sufficient to prevent the application to
the Mortgage or the loss payee of any coinsurance clause under the
policy. If the Mortgaged Property is a condominium unit, it is
included under the coverage afforded by a blanket policy for the
project. If the improvements on the Mortgaged Property are in an area
identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards, a flood insurance policy
meeting the requirements of the current guidelines of the Federal
Insurance Administration is in effect with a generally acceptable
insurance carrier, in an amount representing coverage not less than
the least of (A) the outstanding principal balance of the Mortgage
Loan, (B) the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster Protection Act
of 1973, as amended. All individual insurance policies contain a
standard mortgagee clause naming the Company and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain a hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. The
hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and
effect and inure to the benefit of the Purchaser upon the consummation
of the transactions contemplated by this Agreement. The Company has
not acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and enforceability
thereof;
(gg) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under
the Servicemembers Civil Relief Act, as amended;
(hh) No Balloon Payments, Graduated Payments or Contingent Interests.
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The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent
interest feature. No Mortgage Loan has a balloon payment feature;
(ii) No Construction Loans.
No Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgage Property or (ii) facilitating the
trade-in or exchange of a Mortgaged Property other than a
construction-to-permanent loan which has converted to a permanent
Mortgage Loan;
(jj) Underwriting.
Each Mortgage Loan was underwritten in accordance with the
Underwriting Guidelines; and the Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae;
(kk) Bankruptcy.
No Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding as of the date the Mortgage loan was closed;
(ll) Leasehold Estates.
With respect to Mortgage Loans that are secured by a leasehold estate,
the lease is valid, in full force and effect and conforms to the
Underwriting Guidelines; provided, the term of the leasehold exceeds
the maturity date of the related Mortgage Loan by at least five (5)
years;
(mm) The Mortgagor.
The Mortgagor is one or more natural persons and/or an Illinois land
trust or a "living trust" and such "living trust" is in compliance
with Xxxxxx Xxx or Xxxxxxx Mac guidelines;
(nn) Delivery of Custodial Mortgage Files.
The Mortgage Note and any other documents required to be delivered by
the Company under this Agreement for the Mortgage Loans have been
delivered to the Custodian. The Company is in possession of a
complete, true and accurate Retained Mortgage File in compliance with
Exhibit C, except for such documents the originals of which have been
sent for recordation;
(oo) Servicing.
30
From and after the dated of origination, each Mortgage Loan has been
serviced in accordance with the terms of all federal, state and local
laws and regulations, the terms of the Mortgage Note and Accepted
Servicing Practices in all respects;
(pp) Due on Sale.
The Mortgage or Mortgage Note contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee
thereunder;
(qq) No Violation of Environmental Laws.
There is no pending action or proceeding directly involving any
Mortgaged Property of which the Company is aware in which compliance
with any environmental law, rule or regulation is an issue; and to the
best of the Company's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use, value and enjoyment of said
property;
(rr) Single Premium Credit Life Insurance.
No Mortgagor was required to purchase any single premium credit
insurance policy (e.g. life, disability, accident, unemployment or
health insurance product) or debt cancellation agreement as a
condition of obtaining the extension of credit. No Mortgagor obtained
a prepaid single premium credit insurance policy (e.g. life,
disability, accident, unemployment or health insurance product) as
part of the origination of the Mortgage Loan. No proceeds from any
Mortgage Loan were used to purchase single premium credit insurance
policies or debt cancellation agreements as part of the origination
of, or as a condition to closing, such Mortgage Loan;
(ss) Anti-Money Laundering Laws.
The Company has complied with all applicable anti-money laundering
laws and regulations, (the "Anti-Money Laundering Laws"), and has
established an anti-money laundering compliance program as required by
the Anti-Money Laundering Laws;
(tt) No High Cost Loans.
No Mortgage Loan is a High Cost Loan or Covered Loan;
(uu) Contents of the Retained Mortgage File
31
The Retained Mortgage File contains the documents listed as items 6
through 11 of Exhibit C attached hereto;
(vv) Fair Credit Reporting Act.
The Company, in its capacity as servicer for each Mortgage Loan, has
fully furnished, in accordance with the Fair Credit Reporting Act and
its implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis;
(ww) Cooperative Loans.
With respect to each Cooperative Loan:
(i) The Cooperative Shares are held by a person as a
tenant-stockholder in a Cooperative. Each original UCC financing
statement, continuation statement or other governmental filing or
recordation necessary to create or preserve the perfection and
priority of the first lien and security interest in the
Cooperative Loan and Proprietary Lease has been timely and
properly made. Any security agreement, chattel mortgage or
equivalent document related to the Cooperative Loan and delivered
to Purchaser or its designee establishes in Purchaser a valid and
subsisting perfected first lien on and security interest in the
Mortgaged Property described therein, and Purchaser has full
right to sell and assign the same. The Proprietary Lease term
expires no less than five years after the Mortgage Loan term or
such other term acceptable to Xxxxxx Mae or Xxxxxxx Mac;
(ii) A Cooperative Lien Search has been made by a company competent to
make the same which company is acceptable to Xxxxxx Mae or
Xxxxxxx Mac and qualified to do business in the jurisdiction
where the Cooperative is located;
(iii) (a) The term of the related Proprietary Lease is not less than
the terms of the Cooperative Loan; (b) there is no provision in
any Proprietary Lease which requires the Mortgagor to offer for
sale the Cooperative Shares owned by such Mortgagor first to the
Cooperative; (c) there is no prohibition in any Proprietary Lease
against pledging the Cooperative Shares or assigning the
Proprietary Lease; (d) the Cooperative has been created and
exists in full compliance with the requirements for residential
cooperatives in the jurisdiction in which the Project is located
and qualifies as a cooperative housing corporation under Section
210 of the Code; (e) the Recognition Agreement is on a form
published by Aztech Document Services, Inc. or includes similar
provisions; and (f) the Cooperative has good and marketable title
to the Project, and owns the Project either in fee simple or
under a leasehold that complies with the
32
requirements of the Xxxxxx Xxx or Xxxxxxx Mac guidelines or the
Underwriting Guidelines; such title is free and clear of any
adverse liens or encumbrances, except the lien of any blanket
mortgage;
(iv) The Company has the right under the terms of the Mortgage Note,
Pledge Agreement and Recognition Agreement to pay any maintenance
charges or assessments owed by the Mortgagor;
(v) Each Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will
be transferred by the stock transfer agent of the Cooperative if
the Company undertakes to convert the ownership of the collateral
securing the related Cooperative Loan;
(xx) No Arbitration Provision.
No Mortgagor with respect to any Mortgage Loan originated on or after
August 1, 2004, agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan
transaction; and
(yy) Prepayment Penalty.
With respect to each Mortgage Loan that has a Prepayment Penalty
feature, each such Prepayment Penalty shall be enforceable and will be
enforced by the Company for the benefit of the Purchaser, and each
Prepayment Penalty shall be permitted pursuant to federal, state and
local law. Each such Prepayment Penalty is in an amount equal to the
maximum amount permitted under applicable law and no such Prepayment
Penalty may be imposed for a term in excess of five (5) years with
respect to Mortgage Loans originated on or after October 1, 2002.
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the applicable Mortgage Loan Documents to the
Custodian and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Custodial Mortgage File or
Retained Mortgage File. Upon discovery by either the Company or the Purchaser of
a breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of Purchaser
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Mortgage Loan) (in the case of any of the foregoing, a
"Breach"), the party discovering such Breach shall give prompt written notice to
the other.
Within ninety (90) days of the earlier of either discovery by or notice to
the Company of any Breach of a representation or warranty which materially and
adversely affects the value of
33
the Mortgage Loans, the Company shall use its best efforts promptly to cure such
Breach in all material respects (although, in connection with such a Breach of
Section 3.02 (vv), the cure period shall be fifteen (15) days) and, if such
Breach cannot be cured, the Company shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01, and such
Breach cannot be cured within ninety (90) days of the earlier of either
discovery by or notice to the Company of such Breach, all of the Mortgage Loans
shall, at the Purchaser's option, be repurchased by the Company at the
Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Section 3.02 and the Company discovers or receives notice
of any such Breach within one hundred twenty (120) days of the Closing Date, the
Company shall, if the Breach cannot be cured, at the Purchaser's option and
provided that the Company has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than one hundred twenty (120) days after the Closing Date. If the
Company has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan within ninety (90) days of the written notice of the
Breach or the failure to cure, whichever is later. Any repurchase of a Mortgage
Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be
accomplished by deposit in the Custodial Account of the amount of the Repurchase
Price for distribution to Purchaser on the Remittance Date immediately following
the Principal Prepayment Period in which such repurchase takes place, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution.
At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian relating
to the Deleted Mortgage Loan. If the Company repurchases a Mortgage Loan that is
a MERS Mortgage Loan, the Company shall cause MERS to designate on the MERS(R)
System to remove the Purchaser as the beneficial holder with respect to such
Mortgage Loan. In the event of a repurchase or substitution, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser that
such repurchase or substitution has taken place, amend the related Mortgage Loan
Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this
Agreement, and, in the case of substitution, identify a Qualified Substitute
Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the
addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such
substitution. The Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Company. With respect to
34
any Deleted Mortgage loan, distributions to Purchaser shall include the Monthly
Payment due on any Deleted Mortgage Loan in the month of substitution, and the
Company shall thereafter be entitled to retain all amounts subsequently received
by the Company in respect of such Deleted Mortgage Loan.
For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Company in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.
In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a Breach of
the Company representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 3.03 constitute the sole
remedies of the Purchaser respecting a Breach of the foregoing representations
and warranties.
Any cause of action against the Company relating to or arising out of the
Breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such Breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or through
the utilization of a Subservicer or a Subcontractor, to do any and all things in
connection with such servicing and administration which the Company may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Company shall be responsible for any and all
acts of a Subservicer and a Subcontractor, and the Company's utilization of a
Subservicer or a Subcontractor shall in no way relieve the liability of the
Company under this Agreement.
35
Consistent with the terms of this Agreement, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances,
other than Servicing Advances, with respect to a Mortgage Loan. The Company
shall not permit any modification with respect to any Mortgage Loan that would
change the Mortgage Interest Rate, defer or forgive the payment of principal
(except for actual payments of principal) or change the final maturity date on
such Mortgage Loan, unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Company, imminent. In
the event that no default exists or is imminent, the Company shall request
written consent from the Purchaser to permit such a modification and the
Purchaser shall provide written consent or notify the Company of its objection
to such modification within five (5) Business Days of its receipt of the
Company's request. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Company
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred, deposit
in the Custodial Account from its own funds, in accordance with Section 5.03,
the difference between (a) such month's principal and one month's interest at
the Mortgage Loan Remittance Rate on the unpaid principal balance of such
Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be
entitled to reimbursement for such advances to the same extent as for all other
advances made pursuant to Section 5.03. Without limiting the generality of the
foregoing, the Company shall continue, and is hereby authorized and empowered,
to execute and deliver on behalf of itself and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. If reasonably required by the Company, the
Purchaser shall furnish the Company with any powers of attorney and other
documents necessary or appropriate to enable the Company to carry out its
servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that it
customarily employs and exercises in servicing and administering mortgage loans
for its own account, giving due consideration to Accepted Servicing Practices
where such practices do not conflict with the requirements of this Agreement,
and the Purchaser's reliance on the Company.
The Company shall cause to be maintained for each Cooperative Loan a copy
of the financing statements and shall file and such financing statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
The Company is authorized and empowered by the Purchaser, in its own name,
when the Company believes it appropriate in its reasonable judgment to register
any Mortgage Loan on the MERS(R) System, or cause the removal from MERS
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Purchaser, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
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Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Company shall take such action as (1) the Company would take under
similar circumstances with respect to a similar mortgage loan held for its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, (3) the Company shall determine prudently to be in the best interest
of Purchaser, and (4) is consistent with any related PMI Policy. In the event
that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of ninety (90) days or any
other default continues for a period of ninety (90) days beyond the expiration
of any grace or cure period, the Company shall commence foreclosure proceedings.
In the event the Purchaser objects to such foreclosure action, the Company shall
not be required to make Monthly Advances with respect to such Mortgage Loan,
pursuant to Section 5.03, and the Company's obligation to make such Monthly
Advances shall terminate on the 90th day referred to above. In such connection,
the Company shall from its own funds make all necessary and proper Servicing
Advances, provided, however, that the Company shall not be required to expend
its own funds in connection with any foreclosure or towards the restoration or
preservation of any Mortgaged Property, unless it shall determine (a) that such
preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for
such expenses and (b) that such expenses will be recoverable by it either
through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the
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Company, the Company shall be entitled to be reimbursed from amounts in the
Custodial Account pursuant to Section 4.05 hereof. In the event the Purchaser
directs the Company not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, the Company shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company shall proceed diligently to collect
all payments due under each of the Mortgage Loans when the same shall become due
and payable and shall take special care in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect to
the Mortgage Loan and the Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A.
in trust for the Purchaser and/or subsequent purchasers of Mortgage Loans - P &
I." The Custodial Account shall be established with an Eligible Institution. The
Custodial Account shall at all times be insured to the fullest extent allowed by
applicable law. Funds deposited in the Custodial Account may be drawn on by the
Company in accordance with Section 4.05. The creation of any Custodial Account
shall be evidenced by a certification in the case of an account established with
the Company, or by a letter agreement in the case of an account held by a
depository other than the Company each in the forms attached hereto as Exhibit
F. A copy of such certification or letter agreement shall be furnished to the
Purchaser or any subsequent purchaser upon request.
The Company shall deposit in the Custodial Account within two (2) Business
Days of the Company's receipt, and retain therein, the following collections
received by the Company and payments made by the Company after the Cut-off Date,
other than payments of principal and interest due on or before the Cut-off Date,
or received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans, including
all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans adjusted to
the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
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(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 4.10 (other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with Section
4.14), Section 4.11 and Section 4.15;
(v) all Condemnation Proceeds which are not applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account pursuant
to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any Mortgage
Loan pursuant to Section 3.03 and all amounts required to be deposited
by the Company in connection with a shortfall in principal amount of
any Qualified Substitute Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be paid by
the Company out of its funds) which, when added to all amounts
allocable to interest received in connection with the Principal
Prepayment, equals one month's interest on the amount of principal so
prepaid at the Mortgage Loan Remittance Rate;
(ix) any amounts required to be deposited by the Company pursuant to
Section 4.11 in connection with the deductible clause in any blanket
hazard insurance policy;
(x) any amounts received with respect to or related to any REO Property
and all REO Disposition Proceeds pursuant to Section 4.16; and
(xi) with respect to each Subsidy Loan, an amount from the Escrow Account
that when added to the Mortgagor's payment will equal the full monthly
amount due under the related Mortgage Note.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05.
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
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(i) to make payments to the Purchaser in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's funds made
pursuant to Section 5.03, the Company's right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on
the related Mortgage Loan which represent late payments of principal
and/or interest respecting which any such advance was made, it being
understood that, in the case of any such reimbursement, the Company's
right thereto shall be prior to the rights of Purchaser, except that,
where the Company is required to repurchase a Mortgage Loan pursuant
to Section 3.03 or 6.02, the Company's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the Repurchase
Price pursuant to such sections and all other amounts required to be
paid to the Purchaser with respect to such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and for any
unpaid Servicing Fees, the Company's right to reimburse itself
pursuant to this subclause (iii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the
Company from the Mortgagor or otherwise relating to the Mortgage Loan,
it being understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser,
except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 3.03 or 6.02, in which case the Company's
right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to such sections and all
other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial Account;
(v) to reimburse itself for expenses incurred and reimbursable to it
pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16 related
to any REO Property, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property, the
amount of such expenditure or withdrawal from the Custodial Account
shall be limited to amounts on deposit in the Custodial Account with
respect to the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses after
liquidation of the Mortgaged Property not otherwise reimbursed above;
(viii) to remove funds inadvertently placed in the Custodial Account by the
Company;
(ix) to clear and terminate the Custodial Account upon the termination of
this Agreement.
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In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Residential Mortgage Loans, and various Mortgagors - T & I." The Escrow
Accounts shall be established with an Eligible Institution, in a manner which
shall provide maximum available insurance thereunder. Funds deposited in the
Escrow Account may be drawn on by the Company in accordance with Section 4.07.
The creation of any Escrow Account shall be evidenced by a certification in the
case of an account established with the Company, or by a letter agreement in the
case of an account held by a depository other than the Company each in the forms
attached hereto as Exhibit G. A copy of such certification or letter agreement
shall be furnished to the Purchaser or any subsequent purchaser, upon request.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of Company's receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any such items as required
under the terms of this Agreement;
(ii) all amounts representing Insurance Proceeds or Condemnation Proceeds
which are to be applied to the restoration or repair of any Mortgaged
Property;
(iii) all payments on account of Subsidy Funds; and
(iv) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
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Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
(i) to effect timely payments of ground rents, taxes, assessments, water
rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse the Company for any Servicing Advances made by the
Company pursuant to Section 4.08 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan
which represent late collections of Escrow Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of the
amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to reduce the
principal balance of the Mortgage Loan in accordance with the terms of
the related Mortgage and Mortgage Note;
(v) for application to the restoration or repair of the Mortgaged Property
in accordance with the procedures outlined in Section 4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required by law,
any interest paid on the funds deposited in the Escrow Account;
(vii) to remove funds inadvertently placed in the Escrow Account by the
Company;
(viii) to clear and terminate the Escrow Account on the termination of this
Agreement; and
(ix) To transfer payment on account of Subsidy Funds to the Custodial
Account.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account (excluding the payment of LPMI Policy
premiums, which are to be paid from the Company's own funds without
reimbursement), which shall have been estimated and accumulated by the Company
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Company assumes full responsibility for the timely payment of all
such bills and shall effect timely payment of all such charges irrespective of
each Mortgagor's faithful performance in the payment of same or the making of
the Escrow Payments, and the Company shall make advances from its own funds to
effect such payments.
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Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account, the Subsidy Account or the
Escrow Account to a different Eligible Institution from time to time and shall
provide the Purchaser with notice of such transfer. The Company shall bear any
expenses, losses or damages sustained by the Purchaser because the Custodial
Account and/or the Escrow Account are not demand deposit accounts.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where the
Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) 100% of the insurable value, on a replacement cost basis, of the
improvements on the related Mortgaged Property and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds of such insurance shall be sufficient to prevent the application to
the Mortgagor or the loss payee of any coinsurance clause under the policy. In
the event a hazard insurance policy shall be in danger of being terminated, or
in the event the insurer shall cease to be acceptable to Xxxxxx Mae or Xxxxxxx
Mac, the Company shall notify the Purchaser and the related Mortgagor, and shall
use its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available)
the Company shall cause to be maintained a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect with a generally acceptable insurance carrier acceptable to Xxxxxx
Mae or Xxxxxxx Mac in an amount representing coverage equal to the lesser of (i)
the minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Company determines in accordance with the
applicable law and pursuant to the Xxxxxx Mae Seller/Servicer Guide, that the
Mortgaged Property is located in a special flood hazard area and is not covered
by flood insurance meeting the requirements of the Flood Disaster Protection Act
of 1973, as amended, the Company shall notify the related Mortgagor that they
must obtain such flood insurance coverage and if the Mortgagor fails to provide
proof of such coverage within forty-five (45) days of such notice, the Company
shall force place the required flood insurance on the Mortgagor's behalf.
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If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current Xxxxxx Xxx or Xxxxxxx Mac requirements, and secure
from the owner's association its agreement to notify the Company promptly of any
change in the insurance coverage or of any condemnation or casualty loss that
may have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor's behalf.
All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Xxxxxx Mae and Xxxxxxx Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
4.10. The Company shall prepare and make any claims on the blanket policy as
deemed necessary by the Company in accordance with Accepted Servicing Practices.
Any amounts collected by the Company under any such policy relating to a
Mortgage Loan shall be deposited in the Custodial Account subject to withdrawal
pursuant to Section 4.05. Such policy may contain a deductible
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clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of the Purchaser, the Company shall cause to be delivered
to such Purchaser a certificate of insurance and a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to such Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions Insurance.
The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other Persons acting in any capacity
requiring such Persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be acceptable to Xxxxxx Mae or Xxxxxxx Mac.
Upon the request of any Purchaser, the Company shall cause to be delivered to
such Purchaser a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without thirty (30) days' prior written
notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than sixty (60) days delinquent, the Company
shall inspect the Mortgaged Property and shall conduct subsequent inspections in
accordance with Xxxxxx Mae or Accepted Servicing Practices or as may be required
by the primary mortgage guaranty insurer. The Company shall produce a report of
each such inspection upon written request by the Purchaser.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the
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following conditions in connection with any such release of Insurance Proceeds
or Condemnation Proceeds:
(i) the Company shall receive satisfactory independent verification of
completion of repairs and issuance of any required approvals with
respect thereto;
(ii) the Company shall take all steps necessary to preserve the priority of
the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan is not in default;
and
(iv) pending repairs or restoration, the Company shall place the Insurance
Proceeds or Condemnation Proceeds in the Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Maintenance of PMI Policy; Claims.
With respect to each Mortgage Loan with an original LTV greater than 80% at
the time of origination, the Company shall, without any cost to the Purchaser,
maintain or cause the Mortgagor to maintain in full force and effect a PMI
Policy insuring a portion of the unpaid principal balance of the Mortgage Loan
as to payment defaults. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to 78% or (ii) the PMI Policy is otherwise terminated
pursuant to the Homeowners Protection Act of 1998, 12 USC Section 4901, et seq.
In the event that such PMI Policy shall be terminated other than as required by
law, the Company shall obtain from another Qualified Insurer a comparable
replacement policy, with a total coverage equal to the remaining coverage of
such terminated PMI Policy. If the insurer shall cease to be a Qualified
Insurer, the Company shall determine whether recoveries under the PMI Policy are
jeopardized for reasons related to the financial condition of such insurer, it
being understood that the Company shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such reason. If
the Company determines that recoveries are so jeopardized, it shall notify the
Purchaser and the Mortgagor, if required, and obtain from another Qualified
Insurer a replacement insurance policy. The Company shall not take any action
which would result in noncoverage under any applicable PMI Policy of any loss
which, but for the actions of the Company would have been covered thereunder. In
connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Section 6.01, the Company shall promptly notify the
insurer under the related PMI Policy, if any, of such assumption or substitution
of liability in accordance with the terms of such PMI Policy and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy. If such PMI Policy is terminated as a result
of such assumption or substitution of liability, the Company shall obtain a
replacement PMI Policy as provided above.
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In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any PMI Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Company under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.
Section 4.16 Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or the Purchaser's designee, or in
the event the Purchaser is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such Person
or Persons as shall be consistent with an Opinion of Counsel obtained by the
Company from any attorney duly licensed to practice law in the state where the
REO Property is located. The Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as nominee
for the Purchaser.
The Company shall manage, conserve, protect and operate each REO Property
for the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event prior to the
close of the third calendar year beginning after the year in which title has
been taken to such REO Property, unless(i) a REMIC election has not been made
with respect to the arrangement under which the Mortgage Loans and the REO
Property are held, and (ii) the Company determines that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three years is permitted under the foregoing sentence and is necessary to
sell any REO Property, (i) the Company shall report monthly to the Purchaser as
to the progress being made in selling such REO Property and (ii) if a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Company as mortgagee, and such purchase money mortgage
shall not be held pursuant to this Agreement, but instead a separate
participation agreement among the Company and Purchaser shall be entered into
with respect to such purchase money mortgage.
The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required
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and available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in the amount required above.
The disposition of REO Property shall be carried out by the Company at such
price, and upon such terms and conditions, as the Company deems to be in the
best interests of the Purchaser. The proceeds of sale of the REO Property shall
be promptly deposited in the Custodial Account. As soon as practical thereafter
the expenses of such sale shall be paid and the Company shall reimburse itself
for any related unreimbursed Servicing Advances, unpaid Servicing Fees and
unreimbursed advances made pursuant to Section 5.03. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account in accordance with
Section 4.05, the funds necessary for the proper operation management and
maintenance of the REO Property, including the cost of maintaining any hazard
insurance pursuant to Section 4.10 and the fees of any managing agent of the
Company, or the Company itself. The Company shall make monthly distributions on
each Remittance Date to the Purchaser of the net cash flow from the REO Property
(which shall equal the revenues from such REO Property net of the expenses
described in this Section 4.16 and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.02, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with the
sale of such REO Property and any rental of such REO Property incidental to the
sale thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business and
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements imposed by the Code.
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Section 4.20 Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Interest Rate Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The Company shall execute and deliver any and all necessary
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate adjustments. Upon the
discovery by the Company or the receipt of notice from the Purchaser that the
Company has failed to adjust a Mortgage Interest Rate in accordance with the
terms of the related Mortgage Note, the Company shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or deferral
caused the Purchaser thereby.
Section 4.21 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information and shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information, 66 Fed. Reg. 8616 (the "Interagency
Guidelines"). For purposes of this Section, the term "Customer Information"
shall have the meaning assigned to it in the Interagency Guidelines.
Section 4.22 Fair Credit Reporting Act
The Company, in its capacity as servicer for each Mortgage Loan, shall
furnish, on a monthly basis, complete information on the related borrower credit
files to Equifax, Experian and Trans Union Credit Information Company, in
accordance with the Fair Credit Reporting Act and its implementing regulations.
Section 4.23 Establishment of and Deposits to Subsidy Account.
(a) The Company shall segregate and hold all Subsidy Funds collected and
received pursuant to the Subsidy Loans separate and apart from any of its own
funds and general assets and shall establish and maintain one or more Subsidy
Accounts, in the form of time deposit or demand accounts, titled "Xxxxx Fargo
Bank, N.A., in trust for the Purchaser, its successors or assigns, and/or
subsequent purchasers of Residential Mortgage Loans, and various Mortgagors."
The Subsidy Account shall be an eligible deposit account established with an
eligible institution.
(b) The Company shall, from time to time, withdraw funds from the Subsidy
Account for the following purposes:
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(i) to deposit in the Custodial Account in the amounts and in the
manner provided for in Section 4.04(xi);
(ii) to transfer funds to another eligible institution in accordance
with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Subsidy Account upon the termination
of this Agreement.
(c) Notwithstanding anything to the contrary elsewhere in this Agreement,
the Company may employ the Escrow Account as the Subsidy Account to the extent
that the Company can separately identify any Subsidy Funds deposited therein.
Section 4.24 Prepayment Penalty Waivers.
To the extent consistent with the terms of this Agreement, the Company may
waive (or permit a subservicer to waive) a Prepayment Penalty only under the
following circumstances: (i) such waiver is standard and customary in servicing
similar Mortgage Loans and (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Company,
maximize recovery of total proceeds, taking into account the value of such
Prepayment Penalty and the related Mortgage Loan.
The Company shall pay the amount of any Prepayment Penalty (to the extent
not collected and remitted to the Purchaser) to the Purchaser or its assignees
if (1) the representation in Section 3.02(xx) is breached and such breach
materially and adversely affects the interests of the Purchaser or its assigns,
or (2) the Company waives any Prepayment Penalty other than as permitted under
this Section 4.24. The Company shall pay the amount of such Prepayment Penalty,
for the benefit of the Purchaser or any assignee of the Purchaser, by depositing
such amount into the Custodial Account at the time that the amount prepaid on
the related Mortgage Loan is required to be deposited into the Custodial
Account.
Section 4.25 Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.25. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section 4.25.
(a) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subservicer. The
Company shall cause any Subservicer used by the Company (or by any
Subservicer) for the benefit of the Purchaser
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and any Depositor to comply with the provisions of this Section 4.25 and
with Sections 6.04, 6.06, 9.01(d)(iii), 9.01(d)(v), 9.01(d)(vi) and 9.01(e)
of this Agreement to the same extent as if such Subservicer were the
Company, and to provide the information required with respect to such
Subservicer under Section 9.01(d)(iv) of this Agreement. The Company shall
be responsible for obtaining from each Subservicer and delivering to the
Purchaser and any Depositor any servicer compliance statement required to
be delivered by such Subservicer under Section 6.04 and any assessment of
compliance and attestation required to be delivered by such Subservicer
under Section 6.06 and any certification required to be delivered to the
Person that will be responsible for signing the Sarbanes Certification
under Section 6.06 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of the
Purchaser or any Depositor to the utilization of any Subcontractor. The
Company shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to
the Purchaser and such Depositor) of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided
by each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06 and 9.01(e) of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 6.06,
in each case as and when required to be delivered.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be
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deposited in the Custodial Account in connection with such Principal Prepayment
in accordance with Section 4.04(viii); minus (d) any amounts attributable to
Monthly Payments collected but due on a Due Date or Dates subsequent to the
first day of the month of the Remittance Date, and minus (e) any amounts
attributable to Buydown Funds being held in the Custodial Account, which amounts
shall be remitted on the Remittance Date next succeeding the Due Period for such
amounts. All cash flows from Prepayment Penalties shall be passed through to the
Purchaser and shall not be waived by the Seller, except pursuant to Section
4.24.
With respect to any remittance received by the Purchaser after the second
(2nd) Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period commencing with the day following such second (2nd) Business Day and
ending with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Remittance Date. The payment by the Company of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the tenth (10th) calendar day of the month, the Company
shall furnish in an agreed upon electronic format to the Purchaser or its
designee, a monthly loan level scheduled remittance advice, trial balance report
and payment and payoff activity detail, as to the period ending on the last day
of the preceding month.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the Company
shall deposit in the Custodial Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close of
business on the immediately preceding Determination Date or which were deferred
pursuant to Section 4.01. Any amounts held for future distribution and so used
shall be replaced by the Company by deposit in the Custodial Account on or
before any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than payments to the Purchaser required to be made
on such Remittance Date. The Company's obligation to make such Monthly Advances
as to any Mortgage Loan will continue through the last Monthly Payment due prior
to the payment in full of the Mortgage Loan, or through the last Remittance Date
prior to the Remittance Date for the distribution of all Liquidation Proceeds
and other payments or recoveries (including REO Disposition Proceeds, Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan; provided,
however, that such obligation shall cease if the Company determines, in its sole
reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, REO Disposition
Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise
52
with respect to a particular Mortgage Loan. In the event that the Company
determines that any such advances are non-recoverable, the Company shall provide
the Purchaser with a certificate signed by two officers of the Company
evidencing such determination. The Company shall not have an obligation to make
such Monthly Advances as to any Mortgage Loan with respect to shortfalls
relating to the Servicemembers Civil Relief Act or similar state and local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the Person to whom such property has
been conveyed, pursuant to which such Person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the creditworthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
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Section 6.02 Satisfaction of Mortgages and Release of Retained Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
Monthly Remittance Advice as provided in Section 5.02, and may request the
release of any applicable Mortgage Loan Documents.
If the Company satisfies or releases the lien of the Mortgage without first
having obtained payment in full of the indebtedness secured by the Mortgage
(other than as a result of a modification pursuant to the terms of this
Agreement or a liquidation of the Mortgaged Property pursuant to the terms of
this Agreement) or should the Company otherwise prejudice any rights the
Purchaser may have under the mortgage instruments, upon written demand of the
Purchaser, the Company shall repurchase the related Mortgage Loan at the
Repurchase Price by deposit thereof in the Custodial Account within two (2)
Business Days of receipt of such demand by the Purchaser. The Company shall
maintain the Fidelity Bond and Errors and Omissions Insurance Policy as provided
for in Section 4.12 insuring the Company against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled
to retain from the interest payment the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by Section 4.05) of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statements as to Compliance.
On or before March 1 of each calendar year, commencing in 2007, the Company
shall deliver to the Purchaser and any Depositor a statement of compliance
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Company, to the effect that (a) a review of the Company's
activities during the immediately preceding calendar year (or applicable portion
thereof) and of its performance under this Agreement and any applicable
Reconstitution Agreement during such period has been made under such officer's
supervision, and (b) to the best of such officers' knowledge, based on such
review, the Company has fulfilled all of its obligations under this Agreement
and any applicable Reconstitution Agreement in all material respects throughout
such calendar year (or applicable portion thereof) or, if there has
54
been a failure to fulfill any such obligation in any material respect,
specifically identifying each such failure known to such officer and the nature
and the status thereof.
Section 6.05 Annual Independent Public Accountants' Servicing Report.
Except with respect to any Mortgage Loans that are the subject of a
Securitization Transaction, on or before March 1 of each calendar year,
commencing in 2007, the Company, at its expense, shall cause a firm of
independent public accountants which is a member of the American Institute of
Certified Public Accountants to furnish a statement to each Purchaser to the
effect that such firm has examined certain documents and records relating to the
servicing of the mortgage loans similar in nature and that such firm is of the
opinion that the provisions of this or similar agreements have been complied
with, and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance therewith, except for (i) such exceptions as
such firm shall believe to be immaterial, and (ii) such other exceptions as
shall be set forth in such statement. By providing Purchaser a copy of a Uniform
Single Attestation Program Report from their independent public accountant's on
an annual basis, Company shall be considered to have fulfilled its obligations
under this Section 6.05.
Section 6.06 Report on Assessment of Compliance and Attestation.
With respect to any Mortgage Loans that are the subject of a Securitization
Transaction, on or before March 1 of each calendar year, commencing in 2007, the
Company shall:
(i) deliver to the Purchaser and any Depositor a report (in form and
substance reasonably satisfactory to the Purchaser and such Depositor)
regarding the Company's assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required
under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Purchaser and
such Depositor and signed by an authorized officer of the Company and
shall address each of the Servicing Criteria specified substantially
in the form of Exhibit H hereto delivered to the Purchaser at the time
of any Securitization Transaction;
(ii) deliver to the Purchaser and any Depositor a report of a registered
public accounting firm reasonably acceptable to the Purchaser and such
Depositor that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the preceding
paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.25(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB,
to deliver to the Purchaser and any
55
Depositor an assessment of compliance and accountants' attestation as
and when provided in paragraphs (i) and (ii) of this Section 6.06; and
(iv) if requested by the Purchaser or any Depositor not later than February
1 of the calendar year in which such certification is to be delivered,
deliver to the Purchaser, any Depositor and any other Person that will
be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of
2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form attached hereto
as Exhibit I.
The Company acknowledges that the parties identified in clause (iv) above
may rely on the certification provided by the Company pursuant to such clause in
signing a Sarbanes Certification and filing such with the Commission. Neither
the Purchaser nor any Depositor will request delivery of a certification under
clause (iv) above unless a Depositor is required under the Exchange Act to file
an annual report on Form 10-K with respect to an issuing entity whose asset pool
includes Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to Section
6.06(i) shall address each of the Servicing Criteria specified substantially in
the form of Exhibit H hereto delivered to the Purchaser at the time of any
Securitization Transaction or, in the case of a Subservicer subsequently
appointed as such, on or prior to the date of such appointment. An assessment of
compliance provided by a Subcontractor pursuant to Section 6.06(iii) need not
address any elements of the Servicing Criteria other than those specified by the
Company pursuant to Section 4.25.
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or any
Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.25, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(d)(vi)(A), or in a writing
furnished pursuant to Section 9.01(d)(vi)(B) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(d)(vi)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of
this Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of the
Company as servicer, such provision shall be given effect.
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(ii) Any failure by the Company, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when and
as required under Section 6.04 or Section 6.06, including (except as provided
below) any failure by the Company to identify any Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation AB,
which continues unremedied for ten (10) calendar days after the date on which
such information, report, certification or accountants' letter was required to
be delivered shall constitute an Event of Default with respect to the Company
under this Agreement and any applicable Reconstitution Agreement, and shall
entitle the Purchaser or Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the Company;
provided that to the extent that any provision of this Agreement and/or any
applicable Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company as servicer,
such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate the
rights and obligations of the Company pursuant to this Section 6.07(ii) if a
failure of the Company to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
(iii) The Company shall promptly reimburse the Purchaser (or any designee
of the Purchaser, such as a master servicer) and any Depositor, as applicable,
for all reasonable expenses incurred by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own expenses associated with such
examination.
Section 6.09 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take any action that,
under the REMIC Provisions, if taken or not taken, as the case may be, could (i)
endanger the status of the REMIC as a REMIC or (ii)
57
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Company, upon request, also shall make available any
comparable interim statements to the extent any such statements have been
prepared by or on behalf of the Company (and are available upon request to
members or stockholders of the Company or to the public at large).
The Company also shall make available to Purchaser or prospective Purchaser
a knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Company or the financial
statements of the Company, and to permit any prospective purchaser to inspect
the Company's servicing facilities for the purpose of satisfying such
prospective purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
ARTICLE VIII
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THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Company to perform its duties, comply with its obligations and covenants under
the terms of this Agreement and service the Mortgage Loans all in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and franchises
and shall obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans and
to perform its duties under this Agreement.
Any Person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution (i) having a net worth
of not less than $15,000,000 and (ii) which is a Xxxxxx Xxx/Xxxxxxx Mac-approved
seller/servicer in good standing. Furthermore, in the event the Company
transfers or otherwise disposes of all or substantially all of its assets to an
affiliate of the Company, such affiliate shall satisfy the condition above, and
shall also be fully liable to the Purchaser for all of the Company's obligations
and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or agents
of the Company shall be under any liability to the Purchaser for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Company or any such Person against
59
any breach of warranties or representations made herein, or failure to perform
its obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company 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 Company shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Company may, with the
consent of the Purchaser, undertake any such action which it may deem necessary
or desirable in respect to this Agreement and the rights and duties of the
parties hereto. In such event, the Company shall be entitled to reimbursement
from the Purchaser of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing rights hereunder or
sell or otherwise dispose of all of its property or assets without the prior
written consent of the Purchaser, which consent shall not be unreasonably
withheld by the Purchaser, with the understanding that any successor servicer
meet the requirements of this Agreement and be acceptable to the Rating Agencies
and trustee upon reconstitution.
The Company shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or sell or otherwise dispose of all or substantially
all of its property or assets, without the prior written consent of the
Purchaser, then the Purchaser shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Purchaser or any
third party.
ARTICLE IX
SECURITIZATION TRANSACTIONS
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Section 9.01 Removal of Mortgage Loans from Inclusion Under this Agreement Upon
an Agency Sale, Whole Loan Transfer or Securitization Transaction
The Purchaser and the Company agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or Securitization Transactions, retaining the Company as
the servicer thereof or subservicer if a master servicer is employed, or as
applicable the "seller/servicer." On the Reconstitution Date, the Mortgage Loans
transferred may cease to be covered by this Agreement; provided, however, that,
in the event that any Mortgage Loan transferred pursuant to this Section 9.01 is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01. In connection therewith:
(a) the Company shall make all representations and warranties made herein
with respect to the Mortgage Loans as of the Closing Date and with
respect to the Company itself as of the closing date of each Whole
Loan Transfer, Agency Sale or Securitization Transaction;
(b) the Company shall negotiate in good faith and execute any
seller/servicer agreements required to effectuate the foregoing
provided such agreements create no greater obligation or cost on the
part of the Company than otherwise set forth in this Agreement;
(c) the Company shall provide such additional representations,
warranties, covenants, opinions of counsel or certificates of
officers of the Company as are reasonably believed necessary by the
trustee, any rating agency, guarantor or the Purchaser, as the case
may be, in connection with such Whole Loan Transfers, Agency Sales or
Securitization Transactions. The Purchaser shall pay all third party
costs associated with the preparation of such information. The
Company shall execute any seller/servicer agreements required within
a reasonable period of time after receipt of such seller/servicer
agreements which time shall be sufficient for the Company and
Company's counsel to review such seller/servicer agreements. Under
this Agreement, the Company shall retain a Servicing Fee for each
Mortgage Loan at the Servicing Fee Rate.
(d) in connection with any Securitization Transaction, the Company shall
(1) within five (5) Business Days following request by the Purchaser
or any Depositor, provide to the Purchaser and such Depositor (or, as
applicable, cause each Third-Party Originator and each Subservicer to
provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (i), (ii), (iii) and (vii) of this
subsection (d), and (2) as promptly as practicable following notice
to or discovery by the Company, provide to the Purchaser and any
Depositor (in writing and in
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form and substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (iv) of this
subsection (d).
(i) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding (1) the Company, as
originator of the Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), or (2) each
Third-Party Originator, and (3) as applicable, each Subservicer,
as is requested for the purpose of compliance with Items
1103(a)(1), 1105, 1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and
how long the originator has been engaged in originating
residential mortgage loans, which description shall include
a discussion of the originator's experience in originating
mortgage loans of a similar type as the Mortgage Loans;
information regarding the size and composition of the
originator's origination portfolio; and information that may
be material, in the good faith judgment of the Purchaser or
any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting
or underwriting criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other information as
the Purchaser or any Depositor may reasonably request for
the purpose of compliance with Item 1110(b)(2) of Regulation
AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against
the Company, each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or relationship (of a type
described in Item 1119 of Regulation AB) between the
Company, each Third-Party Originator, each Subservicer and
any of the following parties to a Securitization
Transaction, as such parties are identified to the Company
by the Purchaser or any Depositor in writing in advance of a
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
62
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party
Originator to provide) Static Pool Information with respect to
the mortgage loans (of a similar type as the Mortgage Loans, as
reasonably identified by the Purchaser as provided below)
originated by (1) the Company, if the Company is an originator of
Mortgage Loans (including as an acquirer of Mortgage Loans from a
Qualified Correspondent), and/or (2) each Third-Party Originator.
Such Static Pool Information shall be prepared by the Company (or
Third-Party Originator) on the basis of its reasonable, good
faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably
available to the Company (or Third-Party Originator) Static Pool
Information with respect to more than one mortgage loan type, the
Purchaser or any Depositor shall be entitled to specify whether
some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may
be in the form customarily provided by the Company, and need not
be customized for the Purchaser or any Depositor. Such Static
Pool Information for each vintage origination year or prior
securitized pool, as applicable, shall be presented in increments
no less frequently than quarterly over the life of the mortgage
loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as
of a date no later than one hundred thirty-five (135) days prior
to the date of the prospectus or other offering document in which
the Static Pool Information is to be included or incorporated by
reference. The Static Pool Information shall be provided in an
electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf)
file, or other such electronic format reasonably required by the
Purchaser or the Depositor, as applicable.
Promptly following notice or discovery of a material error in
Static Pool Information provided pursuant to the immediately
preceding paragraph (including an omission to include therein
information required to be provided pursuant to such paragraph),
the Company shall provide corrected Static Pool Information to
the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such
party by the Company.
If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party
Originator to provide), at the expense of the requesting party
(to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably
acceptable to the Purchaser or Depositor, as applicable,
pertaining to Static Pool Information relating to prior
securitized pools for
63
securitizations closed on or after January 1, 2006 or, in the
case of Static Pool Information with respect to the Company's or
Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such
Depositor shall reasonably request. Such letters shall be
addressed to and be for the benefit of such parties as the
Purchaser or such Depositor shall designate, which may include,
by way of example, any sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial
purchaser with respect to a Securitization Transaction. Any such
statement or letter may take the form of a standard, generally
applicable document accompanied by a reliance letter authorizing
reliance by the addressees designated by the Purchaser or such
Depositor.
(iii) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding the Company, as
servicer of the Mortgage Loans, and each Subservicer (each of
the Company and each Subservicer, for purposes of this
paragraph, a "Servicer"), as is requested for the purpose of
compliance with Items 1108 of Regulation AB. Such information
shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the
Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Servicer's
experience in, and procedures for, the servicing function it
will perform under this Agreement and any Reconstitution
Agreements; information regarding the size, composition and
growth of the Servicer's portfolio of residential mortgage
loans of a type similar to the Mortgage Loans and
information on factors related to the Servicer that may be
material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of mortgage loans of
a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early
amortization or other performance triggering event
because of servicing during the three-year period
immediately preceding the related Securitization
Transaction;
(2) the extent of outsourcing the Servicer utilizes;
64
(3) whether there has been previous disclosure of material
noncompliance with the applicable Servicing Criteria
with respect to other securitizations of residential
mortgage loans involving the Servicer as a servicer
during the three-year period immediately preceding the
related Securitization Transaction;
(4) whether the Servicer has been terminated as servicer in
a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing
performance test or trigger; and
(5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the related Securitization
Transaction to the Servicer's policies or procedures with
respect to the servicing function it will perform under this
Agreement and any Reconstitution Agreements for mortgage
loans of a type similar to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse
financial event or circumstance involving the Servicer could
have a material adverse effect on the performance by the
Company of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing
portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an
authorized officer of the Servicer to the effect that the
Servicer has made all advances required to be made on
residential mortgage loans serviced by it during such
period, or, if such statement would not be accurate,
information regarding the percentage and type of advances
not made as required, and the reasons for such failure to
advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved
in servicing loans of a similar type as the Mortgage Loans;
65
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any
grace period, re-aging, restructuring, partial payments
considered current or other practices with respect to
delinquency and loss experience.
(iv) If so requested by the Purchaser or any Depositor for the purpose
of satisfying its reporting obligation under the Exchange Act
with respect to any class of asset-backed securities, the Company
shall (or shall cause each Subservicer and Third-Party Originator
to) (1) notify the Purchaser and any Depositor in writing of (A)
any material litigation or governmental proceedings pending
against the Company, any Subservicer or any Third-Party
Originator and (B) any affiliations or relationships that develop
following the closing date of a Securitization Transaction
between the Company, any Subservicer or any Third-Party
Originator and any of the parties specified in Section
9.01(d)(i)(D) (and any other parties identified in writing by the
requesting party) with respect to such Securitization
Transaction, and (2) provide to the Purchaser and any Depositor a
description of such proceedings, affiliations or relationships.
(v) As a condition to the succession to the Company or any
Subservicer as servicer or Subservicer under this Agreement or
any Reconstitution Agreement by any Person (i) into which the
Company or such Subservicer may be merged or consolidated, or
(ii) which may be appointed as a successor to the Company or any
Subservicer, the Company shall provide to the Purchaser and any
Depositor, at least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x) written
notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, all
information reasonably requested by the Purchaser or any
Depositor in order to comply with is reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed
securities.
(vi) (A) The Company shall be deemed to represent to the Purchaser and
to any Depositor, as of the date on which information is first
provided to the Purchaser under this Section 9.01(d) that, except
as disclosed in writing to the Purchaser or such Depositor prior
to such date: (1) the Company is not aware and has not received
notice that any default, early amortization or other performance
triggering event has occurred as to any other securitization due
to any act or failure to act of the Company; (2) the Company has
not been terminated as servicer in a residential mortgage
66
loan securitization, either due to a servicing default or to
application of a servicing performance test or trigger; (3) no
material noncompliance with the applicable Servicing Criteria
with respect to other securitizations of residential mortgage
loans involving the Company as servicer has been disclosed or
reported by the Company; (4) no material changes to the Company's
policies or procedures with respect to the servicing function it
will perform under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage
Loans have occurred during the three-year period immediately
preceding the related Securitization Transaction; (5) there are
no aspects of the Company's financial condition that could have a
material adverse effect on the performance by the Company of its
servicing obligations under this Agreement or any Reconstitution
Agreement; (6) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the
Company, any Subservicer or any Third-Party Originator; and (7)
there are no affiliations, relationships or transactions relating
to the Company, any Subservicer or any Third-Party Originator
with respect to any Securitization Transaction and any party
thereto identified by the related Depositor of a type described
in Item 1119 of Regulation AB.
(B) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the
Purchaser or any Depositor under this Section 9.01(d), the
Company shall, within five (5) Business Days following such
request, confirm in writing the accuracy of the representations
and warranties set forth in sub clause (A) above or, if any such
representation and warranty is not accurate as of the date of
such request, provide reasonably adequate disclosure of the
pertinent facts, in writing, to the requesting party.
(vii) In addition to such information as the Company, as servicer, is
obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any Depositor,
the Company shall provide such information reasonably available
to the Company regarding the performance or servicing of the
Mortgage Loans as is reasonably required to facilitate
preparation of distribution reports in accordance with Item 1121
of Regulation AB. Such information shall be provided
concurrently with the monthly reports otherwise required to be
delivered by the servicer under this Agreement, commencing with
the first such report due not less than ten (10) Business Days
following such request.
(e) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each
Person responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act
with respect to such
67
Securitization Transaction; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of
such parties or the Depositor (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act); and the respective
present and former directors, officers, employees and agents of each
of the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain
arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification,
accountants' letter or other material provided in written or
electronic form under Sections 4.25, 6.04, 6.06, 9.01(c) and (d)
by or on behalf of the Company, or provided under Sections 4.25,
6.04, 6.06, 9.01(c) and (d) by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the
"Company Information"), or (B) the omission or alleged omission
to state in the Company Information a material fact required to
be stated in the Company Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and not
to any other information communicated in connection with a sale
or purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or
separately from such other information;
(ii) any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as
required under Sections 4.25, 6.04, 6.06, 9.01(c) and (d),
including any failure by the Company to identify any
Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Company of a representation or warranty set
forth in Section 9.01(d)(vi)(A) or in a writing furnished
pursuant to Section 9.01(d)(vi)(B) and made as of a date prior
to the closing date of the related Securitization Transaction,
to the extent that such breach is not cured by such closing
date, or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section
9.01(d)(vi)(B) to the extent made as of a date subsequent to
such closing date.
In the case of any failure of performance described in sub-clause (ii)
of this Section 9.01(e), the Company shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible
for the preparation, execution or filing of any report required to be
filed with the Commission with
68
respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all
costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other
material not delivered as required by the Company, any Subservicer,
any Subcontractor or any Third-Party Originator.
(f) The Purchaser and each Person who controls the Purchaser (within the
meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act) shall indemnify the Company, each affiliate of the
Company, each Person who controls any of such parties or the Company
(within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act) and the respective present and former directors,
officers, employees and agents of each of the foregoing and of the
Company, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i) any untrue statement of a material fact contained or alleged to
be contained in any offering materials related to a
Securitization Transaction, including without limitation the
registration statement, prospectus, prospectus supplement, any
private placement memorandum, free writing prospectuses, any ABS
informational and computational material, any offering circular,
and any amendments or supplements to the foregoing (collectively,
the "Securitization Materials") or
(ii) the omission or alleged omission to state in the Securitization
Materials a material fact required to be stated in the
Securitization Materials or necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading,
but only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission is other than a statement or
omission arising out of, resulting from, or based upon the Company
Information.
(g) in the event the Mortgage Loans become subject to a Xxxxxxx Mac
securitization, negotiate in good faith the terms of such
reconstitution agreements as may be required.
The Purchaser and the Company acknowledge and agree that the purpose of
Section 9.01(d) is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered
69
offerings. References in this Agreement to compliance with Regulation AB include
provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder (or
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Company acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate fully with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Company, any Subservicer, any Third-Party Originator and the Mortgage Loans, or
the servicing of the Mortgage Loans, reasonably believed by the Purchaser or any
Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall cooperate
with the Company by providing timely notice of requests for information under
these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank or to the trustee from the Company
acceptable to the trustee for each Mortgage Loan that is part of the Whole Loan
Transfers, Agency Sales or Securitization Transactions. The Purchaser shall pay
all preparation and recording costs associated therewith, unless the Assignment
of Mortgage is the initial Assignment of Mortgage delivered pursuant to Section
2.03. The Company shall execute each Assignment of Mortgage, track such
Assignments of Mortgage to ensure they have been recorded and deliver them as
required by the trustee upon the Company's receipt thereof. Additionally, the
Company shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all seller/servicer agreements. If
required at any time by the Rating Agencies, Purchaser or successor purchaser in
connection with any Whole Loan Transfer, Agency Sale or Securitization
Transaction, the Company shall deliver such additional documents from its
Retained Mortgage File within ten (10) Business Days to the Custodian, successor
purchaser or other designee of the Purchaser as the Rating Agencies, Purchaser
or successor purchaser may require.
Notwithstanding any provisions of this Agreement to the contrary, all
Mortgage Loans sold or transferred to an Agency, shall be serviced in accordance
with the guidelines of the respective Agency. All Mortgage Loans (i) not sold or
transferred pursuant to Whole Loan
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Transfers, Agency Sales or Securitization Transactions or (ii) that are subject
to a Securitization Transaction for which the related trust is terminated for
any reason, shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part of
the Company:
(i) any failure by the Company to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of five (5) days after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Company set forth in this Agreement or in the Custodial Agreement
which continues unremedied for a period of thirty (30) days after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Company by the Purchaser or by
the Custodian; or
(iii) failure by the Company to maintain its license to do business in any
jurisdiction where the Mortgaged Property is located if such license
is required; or
(iv) a decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including
bankruptcy, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Company and such decree or order
shall have remained in force undischarged or unstayed for a period of
sixty (60) days; or
(v) the Company shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or
relating to the Company or of or relating to all or substantially all
of its property; or
(vi) the Company shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend
payment of its obligations or cease its normal business operations for
three (3) Business Days; or
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(vii) the Company ceases to meet the qualifications of a Xxxxxx
Mae/Xxxxxxx Mac servicer; or
(viii) the Company attempts to assign its right to servicing compensation
hereunder or to assign this Agreement or the servicing
responsibilities hereunder in violation of Section 8.04; or
(ix) an Event of Default as defined in Section 6.07.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and power
of the Company under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 12.01. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the Purchaser
any and all documents and other instruments, place in such successor's
possession all Retained Mortgage Files, and do or cause to be done all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Subsidy Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
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This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company may
have hereunder, without cause as provided in this Section 11.02. Any such notice
of termination shall be in writing and delivered to the Company by registered
mail as provided in Section 12.05.
The Company shall be entitled to receive, as such liquidated damages, upon
the transfer of the servicing rights, an amount equal to 2.75% of the aggregate
outstanding principal amount of the Mortgage Loans as of the termination date
paid by the Purchaser to the Company with respect to all of the Mortgage Loans.
In the event that it is terminated pursuant to this Section 11.02, the Company
shall be required, at the expense of the Purchaser, to deliver to the Custodian
the entire contents of the Retained Mortgage File, to the extent such contents
were not previously delivered to the Custodian pursuant to this Agreement or the
Custodial Agreement.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or pursuant to
Section 11.02, the Purchaser shall, (i) succeed to and assume all of the
Company's responsibilities, rights, duties and obligations under this Agreement,
or (ii) appoint a successor having the characteristics set forth in Section 8.02
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Company under this Agreement prior to the
termination of Company's responsibilities, duties and liabilities under this
Agreement. In connection with such appointment and assumption, the Purchaser may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree. In the event that the
Company's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Company shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01,
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3.02, 3.03 and 8.01 shall be applicable to the Company notwithstanding any such
sale, assignment, resignation or termination of the Company, or the termination
of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for subsection (h) with respect to the sale of
the Mortgage Loans and subsections (i) and (k) thereof, whereupon such successor
shall become fully vested with all the rights, powers, duties, responsibilities,
obligations and liabilities of the Company, with like effect as if originally
named as a party to this Agreement. Any termination or resignation of the
Company or termination of this Agreement pursuant to Section 8.04, 10.01, 11.01
or 11.02 shall not affect any claims that any Purchaser may have against the
Company arising out of the Company's actions or failure to act prior to any such
termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account, Subsidy Account and Escrow Account and all Retained
Mortgage Files and related documents and statements held by it hereunder and the
Company shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement signed
by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement
Section 12.04 Duration of Agreement.
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This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing or investor reporting
issues:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2401-042
if to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Structured Finance Manager, MAC X3906-012
in each instance, with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel - MAC X2401-06T
or such other address as may hereafter be furnished to the Purchaser
in writing by the Company;
(ii) if to Purchaser:
Xxxxxx Brothers Bank, FSB
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms
75
of this Agreement and shall in no way affect the validity or enforceability of
the other provisions of this Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns. The parties agree that this
Agreement and signature pages thereof may be transmitted between them by
facsimile and that faxed signatures may constitute original signatures and that
a faxed signature page containing the signature (faxed or original) is binding
on the parties.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option. The
Company shall only be responsible for the costs of recording the initial
Assignments of Mortgage. In no event shall the Company be responsible for the
cost of recording Assignments of Mortgage in connection with a subsequent sale
or transfer of the Mortgage Loans by the Purchaser.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any Person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form attached as Exhibit I, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Purchaser with respect to such Mortgage Loans. All references to the Purchaser
in this Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to solicit the
refinancing of any Mortgage Loan. It is understood and agreed that neither (i)
promotions undertaken by the
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either party or any affiliate of such party which are directed to the general
public at large, including, without limitation, mass mailings based upon
commercially acquired mailing lists, newspaper, radio, television advertisements
nor (ii) serving the refinancing needs of a Mortgagor who, without solicitation,
contacts either party in connection with the refinance of such Mortgage or
Mortgage Loan, shall constitute solicitation under this Section.
[Intentionally Blank - Next Page Signature Page]
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IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXX BROTHERS BANK, FSB XXXXX FARGO BANK, N.A.
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------- ---------------------------------
78
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared _________, known to me to be __________
of Xxxxx Fargo Bank, N.A., the national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said bank, and acknowledged to me that such bank executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
_____________________________________
Notary Public
My Commission expires________________
79
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public in
and for said State, personally appeared __________________________, known to me
to be the _______________________ of Xxxxxx Brothers Bank, FSB, the corporation
that executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.
_____________________________________
Notary Public
My Commission expires________________
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EXHIBIT A
MORTGAGE LOAN SCHEDULE
(WFHM 2006-W26)
81
EXHIBIT A-1
MORTGAGE LOAN SCHEDULE
(WFHM 2006-W27)
[Intentionally Omitted]
82
EXHIBIT B
CUSTODIAL AGREEMENT
[Intentionally Omitted]
83
EXHIBIT C
CONTENTS OF CUSTODIAL MORTGAGE FILE, RETAINED MORTGAGE FILE AND SERVICING FILE
With respect to each Mortgage Loan, the Retained and Custodial Mortgage
Files shall include each of the following items, which shall be available for
inspection by the Purchaser and any prospective Purchaser, and which shall be
retained by the Company in the Retained Mortgage File or Servicing File or
delivered to the Custodian pursuant to Sections 2.01 and 2.03 of the Seller's
Warranties and the Servicing Agreement to which this Exhibit is attached (the
"Agreement"):
WITH RESPECT TO EACH CUSTODIAL MORTGAGE FILE:
1. The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _______ without recourse" and signed in
the name of the Company by an authorized officer (in the event that
the Mortgage Loan was acquired by the Company in a merger, the
signature must be in the following form: "[Company], successor by
merger to [name of predecessor]"; and in the event that the Mortgage
Loan was acquired or originated by the Company while doing business
under another name, the signature must be in the following form:
"[Company], formerly known as [previous name]").
2. The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon.
3. The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording (except for the insertion of
the name of the assignee and recording information) except in the case
of such Mortgage Loan that has been originated in the name of or
assigned to MERS and registered on the MERS System. The Assignment of
Mortgage must be duly recorded only if recordation is either necessary
under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located
or on direction of the Purchaser as provided in the Custodial
Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned to the Purchaser. If the Assignment of
Mortgage is not to be recorded, the Assignment of Mortgage shall be
delivered in blank. If the Mortgage Loan was acquired by the Company
in a merger, the Assignment of Mortgage must be made by "[Company],
successor by merger to [name of predecessor]." If the Mortgage Loan
was acquired or originated by the Company while doing business under
another name, the Assignment of Mortgage must be by "[Company],
formerly know as [previous name]."
4. The original of any guarantee executed in connection with the Mortgage
Note.
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5. Original or copy of Power of Attorney, if applicable.
WITH RESPECT TO EACH RETAINED MORTGAGE FILE:
6. The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for recordation.
If in connection with any Mortgage Loan, the Company cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by
the public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
Company shall deliver or cause to be delivered to the Custodian, a
photocopy of such Mortgage, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of the
Company stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the
original recorded Mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Company; or (ii) in the case of a Mortgage
where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office or by the title insurance company that issued the
title policy to be a true and complete copy of the original recorded
Mortgage.
Further, with respect to MERS Mortgage Loans, (a) the Mortgage names
MERS as the Mortgagee and (b) the requirements set forth in the
Electronic Tracking Agreement have been satisfied, with a conformed
recorded copy to follow as soon as the same is received by the
Company.
7. For any Mortgage Loan not recorded in the name of MERS, originals or
certified true copies of documents sent for recordation of all
intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of
mortgage, the Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such intervening assignment, together with
(i) in the case of a delay caused by the public recording office, an
Officer's Certificate of the Company stating that such intervening
assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording
office or by the title insurance company that issued the title policy
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Company; or (ii) in the case of an
intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is
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lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be
a true and complete copy of the original recorded intervening
assignment.
8. The original mortgagee policy of title insurance or other evidence of
title such as a copy of the title commitment or copy of the
preliminary title commitment.
9. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
10. For each Cooperative Loan, the original or a seller certified true
copy of the following:
The original Pledge Agreement entered into by the Mortgagor with
respect to such Cooperative Loan;
UCC-3 assignment in blank (or equivalent instrument), sufficient under
the laws of the jurisdiction where the related Cooperative Apartment
is located to reflect of record the sale and assignment of the
Cooperative Loan to the Purchaser;
Original assignment of Pledge Agreement in blank showing a complete
chain of assignment from the originator of the related Cooperative
Loan to the Company;
Original Form UCC-1 and any continuation statements with evidence of
filing thereon with respect to such Cooperative Loan;
Cooperative Shares with a Stock Certificate in blank attached;
Original Proprietary Lease;
Original Assignment of Proprietary Lease, in blank, and all
intervening assignments thereof;
Original recognition agreement of the interests of the mortgagee with
respect to the Cooperative Loan by the Cooperative, the stock of which
was pledged by the related Mortgagor to the originator of such
Cooperative Loan; and
Originals of any assumption, consolidation or modification agreements
relating to any of the items specified above.
11. The electronic form of PMI Policy as identified by certificate number.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent required by the Underwriting Guidelines:
12. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.
13. Residential loan application.
14. Mortgage Loan closing statement.
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15. Verification of employment and income, unless originated under the
Company's Limited Documentation program.
16. Verification of acceptable evidence of source and amount of down
payment.
17. Credit report on the Mortgagor.
18. Residential appraisal report.
19. Photograph of the Mortgaged Property.
20. Survey of the Mortgage property, if required by the title company or
applicable law.
21. Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy,
i.e. map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
22. All required disclosure statements.
23. If available, termite report, structural engineer's report, water
potability and septic certification.
24. Sales contract, if applicable.
25. Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data files,
and all other processing, underwriting and closing papers and records
which are customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the Mortgage
Loan.
26. Amortization schedule, if available.
27. Payment history for any Mortgage Loan that has been closed for more
than ninety (90) days.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An
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extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
88
EXHIBIT D
DATA FILE ELEMENTS
(1) the Company's Mortgage Loan identifying number;
(2) the street address of the Mortgaged Property including the city, state,
county and zip code;
(3) a code indicating whether the Mortgaged Property is a single family
residence, a 2-4 family dwelling, a PUD, a cooperative, a townhouse,
manufactured housing or a unit in a condominium project;
(4) the Mortgage Interest Rate as of the Cut-off Date;
(5) the current Monthly Payment;
(6) loan term, number of months;
(7) the stated maturity date;
(8) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due
on or before the Cut-off Date;
(9) the Loan-to-Value Ratio;
(10) a code indicating whether the Mortgage Loan is an Interest Only Mortgage
Loan;
(11) a code indicating whether the Mortgage Loan is a temporary buydown (Y or
N);
(12) the Servicing Fee Rate;
(13) a code indicating the mortgage insurance provider and percent of coverage,
if applicable;
(14) a code indicating whether the Mortgage Loan is covered by lender-paid
mortgage insurance (Y or N);
(15) a code indicating whether the Mortgage Loan is a Time$aver(R) Mortgage Loan
(Y or N);
(16) the Mortgagor's first and last name;
(17) a code indicating whether the Mortgaged Property is owner-occupied;
(18) the remaining months to maturity from the Cut-off Date, based on the
original amortization schedule;
(19) the date on which the first Monthly Payment was due on the Mortgage Loan;
(20) the actual next Due Date of the Mortgage Loan;
(21) the last Due Date on which a Monthly Payment was actually applied to the
actual principal balance;
(22) the original principal amount of the Mortgage Loan;
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(23) a code indicating the purpose of the loan (i.e., purchase, financing,
rate/term refinancing, cash-out refinancing);
(24) the Mortgage Interest Rate at origination;
(25) the amount on which the first Monthly Payment was due on the Mortgage Loan;
(26) a code indicating the documentation style (i.e., full (providing two years
employment verification - 2 years W-2's and current pay stub or 2 years
1040's for self employed borrowers), alternative or reduced);
(27) a code indicating if the Mortgage Loan is subject to a PMI Policy;
(28) the Appraised Value of the Mortgage Property;
(29) the sale price of the Mortgaged Property, if applicable;
(30) the Mortgagor's Underwriting FICO Score;
(31) term of Prepayment Penalty in years;
(32) a code indicating the product type;
(33) a code indicating the credit grade of the Mortgage Loan;
(34) the unpaid balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of all payments of principal;
(35) the Note date of the Mortgage Loan;
(36) the mortgage insurance certificate number and percentage of coverage, if
applicable;
(37) the Mortgagor's and Co-Mortgagor's (if any) date of birth;
(38) if the Mortgage Loan is a MERS Mortgage Loan, the MIN Number for each MERS
Mortgage Loan;
(39) employer name;
(40) subsidy program code;
(41) servicer name;
(42) the combined Loan-to-Value Ratio;
(43) the total Loan-to-Value Ratio;
(44) whether the Mortgage Loan is convertible (Y or N);
(45) a code indicating whether the Mortgage Loan is a relocation loan (Y or N);
(46) a code indicating whether the Mortgage Loan is a leasehold loan (Y or N);
(47) a code indicating whether the Mortgage Loan is an Alt A loan (Y or N);
(48) a code indicating whether the Mortgage Loan is a no ratio loan (Y or N);
90
(49) a code indicating whether the Mortgage Loan is a Pledged Asset Mortgage
Loan (Y or N);
(50) effective LTV percentage for Pledged Asset Mortgage Loans;
(51) citizenship type code;
(52) a code indicating whether the Mortgage Loan is a conforming or
non-conforming loan, based on the original loan balance;
(53) the name of the client for which the Mortgage Loan was originated;
(54) the program code;
(55) the loan sub doc code;
(56) a code indicating amortization type (1 or 2);
(57) interest only note payment;
(58) first full amortization payment date;
(59) interest only term, number of months;
(60) remaining interest only term, number of months;
(61) a code indicating whether the Mortgage Loan is a 2nd lien (Y or N);
(62) a code indicating borrower VOA or lender VOA (L or B);
(63) combined current loan balance;
The Company shall provide the following
For the Home Mortgage Disclosure Act (HMDA):
(64) the Mortgagor's and co-Mortgagor's (if applicable) ethnicity;
(65) the Mortgagor's and co-Mortgagor's (if applicable) race;
(66) lien status;
(67) for cash-out refinance loans, the cash purpose;
(68) the Mortgagor's and co-Mortgagor's (if applicable) gender;
(69) the Mortgagor's and co-Mortgagor's (if applicable) social security numbers;
(70) the number of units for the property;
(71) the year in which the property was built;
(72) the qualifying monthly income of the Mortgagor;
(73) the number of bedrooms contained in the property;
(74) a code indicating first time buyer (Y or N);
91
(75) the total rental income, if any;
The Company shall provide the following
for the adjustable rate Mortgage Loans (if applicable):
(76) the maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(77) the Periodic Interest Rate Cap;
(78) the Index;
(79) the next interest rate and payment Adjustment Date;
(80) the Mortgage Interest Rate adjustment cap and all subsequent interest rate
Adjustment Dates;
(81) the Gross Margin; and
(82) the lifetime interest rate cap.
92
EXHIBIT E
FORMS OF CUSTODIAL ACCOUNT CERTIFICATIONS
CUSTODIAL ACCOUNT CERTIFICATION
__________________, 20___
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 4.04 of the Seller's
Warranties and Servicing Agreement, dated as of __________________, 20___,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans - P & I
Address of office or branch
of the Company at which
Account is maintained:
________________________________________
________________________________________
________________________________________
________________________________________
XXXXX FARGO BANK, N.A.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CUSTODIAL ACCOUNT LETTER AGREEMENT
__________________, 20___
To:
_________________________________
_________________________________
_________________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of , 20 , (the "Agreement"), we hereby authorize and request you to establish an
account, as a Custodial Account pursuant to Section 4.04 of the Agreement, to be
designated as "Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans - P & I". All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Company. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
XXXXX FARGO BANK, N.A.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number , at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above..
________________________________________
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT F
FORMS OF ESCROW ACCOUNT CERTIFICATIONS
ESCROW ACCOUNT CERTIFICATION
__________________, 20___
Xxxxx Fargo Bank, N.A. hereby certifies that it has established the account
described below as an Escrow Account pursuant to Section 4.06 of the Seller's
Warranties and Servicing Agreement, dated as of __________________, 20___,.
Title of Account: Xxxxx Fargo Bank, N.A. in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans, and various
Mortgagors - T & I
Address of office or branch
of the Company at which
Account is maintained:
________________________________________
________________________________________
________________________________________
________________________________________
XXXXX FARGO BANK, N.A.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ESCROW ACCOUNT LETTER AGREEMENT
__________________, 20___
To:
_________________________________
_________________________________
_________________________________
(the "Depository")
As Company under the Seller's Warranties and Servicing Agreement, dated as
of , 20 , (the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 4.06 of the Agreement, to be
designated as "Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or
subsequent purchasers of Mortgage Loans, and various Mortgagors - T & I". All
deposits in the account shall be subject to withdrawal therefrom by order signed
by the Company. This letter is submitted to you in duplicate. Please execute and
return one original to us.
XXXXX FARGO BANK, N.A.
Company
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ________, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above..
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
EXHIBIT G
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company][Name of
Subservicer] shall address, as a minimum, the criteria identified below as
"Applicable Servicing Criteria"
APPLICABLE INAPPLICABLE
REG AB SERVICING SERVICING
REFERENCE SERVICING CRITERIA CRITERIA CRITERIA
------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any X
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a X
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect X
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash X
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized X
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two X
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree X
with cancelled checks, or other form of payment, or custodial
bank statements.
APPLICABLE INAPPLICABLE
REG AB SERVICING SERVICING
REFERENCE SERVICING CRITERIA CRITERIA CRITERIA
------------------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as X
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool X
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
unpaid principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or
other requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during X
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage X
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents, on at
least an annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such
support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to X
be made on behalf of an obligor are paid from the
Servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within X
two business days to the obligor's records maintained by
the servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item X
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
EXHIBIT H
SARBANES CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer] (the "Servicer"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with the
servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and 15d-18
under Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Item 1122 of Regulation AB (the "Servicing Assessment"), the registered
public accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b) of
Regulation AB (the "Attestation Report"), and all servicing reports,
officer's certificates and other information relating to the servicing of
the Mortgage Loans by the Servicer during 200[ ] that were delivered by the
Servicer to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Servicer Servicing
Information");
(2) Based on my knowledge, the Servicer Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in the light
of the circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Servicer Servicing
Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee];
(4) I am responsible for reviewing the activities performed by the Servicer
under the Agreement, and based on my knowledge and the compliance review
conducted in preparing the Compliance Statement and except as disclosed in
the Compliance Statement, the Servicing Assessment or the Attestation
Report, the Servicer has fulfilled its obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the Servicer
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Servicer and by each Subservicer ad
Subcontractor pursuant to the Agreement have been provided to the
[Depositor] [Master Servicer]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] [Master
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports.
Date:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT I
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
___________________, 20__ between _________________, a _________________
corporation having an office at _________________ ("Assignor") and
_________________, having an office at _________________ ("Assignee"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of the
right, title and interest of Assignor, as Purchaser, in, to and under that
certain Seller's Warranties and Servicing Agreement, (the "Seller's Warranties
and Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"), and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Company with
respect to the Seller's Warranties and Servicing Agreement or the Mortgage
Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the
Mortgage Loans or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest in the
Mortgage Loans or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933 (the "33 Act") or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the 33
Act or require registration pursuant thereto.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Company pursuant to Section 12.10 of the Seller's Warranties
and Servicing Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of the terms,
covenants and conditions of the Seller's Warranties and Servicing Agreement, the
Mortgage Loans and the Custodial Agreement, and from and after the date hereof,
the Assignee assumes for the benefit of each of the Company and the Assignor all
of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage
Loans are in excess of $250,000.00 and will be paid by cash remittance of the
full purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its
own account only and not for any other person. In this connection, neither the
Assignee nor any person authorized to act therefor has offered to Mortgage Loans
by means of any general advertising or general solicitation within the meaning
of Rule 502(c) of US Securities and Exchange Commission Regulation D,
promulgated under the 1933 Act;
e. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information regarding the
Mortgage Loans that it has requested from the Assignor or the Company;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the 33 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 Act or
require registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the Mortgage
Loans; and
h. Either (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result
in a prohibited transaction under section 406 of ERISA or section 4975 of the
Code.
i. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreements is:
__________________________________
__________________________________
__________________________________
Attention: _________________
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreement is:
__________________________________
__________________________________
__________________________________
Attention: _________________
4. From and after the date hereof, the Company shall note the transfer of
the Mortgage Loans to the Assignee in its books and records, the Company shall
recognize the Assignee as the owner of the Mortgage Loans and the Company shall
service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Seller's Warranties and Servicing Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.
[Signatures Follow]
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
to be executed by their duly authorized officers as of the date first above
written.
------------------------------------- ----------------------------------------
Assignor Assignee
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Its: Its:
-------------------------------- -----------------------------------
Acknowledged by:
XXXXX FARGO BANK, N.A.
By:
---------------------------------
Name:
Its:
--------------------------------
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Purchase Agreement (the "Agreement"), dated as of April 1, 2006
by and between Xxxxxx Brothers Bank, FSB, having an office at 000 0xx Xxxxxx,
0xx Xxxxx, Xxx Xxxx, XX 00000 (the "Purchaser") and Xxxxx Fargo Bank, N.A.,
having an xxxxxx xx 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000 (the "Seller").
WITNESSETH
WHEREAS, the Seller agrees to sell, and the Purchaser agrees to purchase,
certain pools of conventional residential fixed rate mortgage loans (each a
"Pool" and collectively, the "Mortgage Loans") on a servicing retained basis as
described herein:
WHEREAS, the Mortgage Loans shall be delivered as whole loans; and
WHEREAS, the parties intend hereby to set forth the terms and conditions
upon which the proposed transactions will be effected.
NOW THEREFORE, in consideration of the promises and the mutual agreements
set forth herein, the parties hereto agree as follows:
SECTION 1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the "Seller's Warranties and Servicing
Agreement"). The following terms are defined as follows (except as otherwise
agreed by the parties):
Cut-off Date: April 1, 2006
Closing Date: April 26, 2006
First Remittance Date: May 18, 2006
Servicing Fee Rate: 0.875 per annum for the Mortgage Loans listed on
Exhibit 1 and 0.250 per annum for the Mortgage
Loans listed on Exhibit 1-A
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, certain Pools of Mortgage Loans having an
aggregate principal balance on the Cut-off Date in an amount as set forth in the
respective Commitment Letters, each dated as of April 5, 2006 (the "Commitment
Letter"), or in such other amount as agreed to by the Purchaser and the Seller
as evidenced by the aggregate scheduled principal balance of the Mortgage Loans
accepted by the Purchaser on the Closing Date. The Mortgage Loans will be
delivered pursuant to a Seller's Warranties and Servicing Agreement, between the
Purchaser and the Seller.
SECTION 3. Mortgage Schedules. The Seller has provided the Purchaser with
certain information constituting a listing of the Mortgage Loans to be purchased
under this Agreement (the "Mortgage Loan Schedule") substantially in the form
attached hereto as Exhibit 1 and Exhibit 1-A. The Mortgage Loan Schedules shall
conform to the definition of "Mortgage Loan Schedule" under the Seller's
Warranties and Servicing Agreement.
SECTION 4. Purchase Price. The purchase price for the Mortgage Loans (the
"Purchase Price") shall be the percentage of par as stated in the Commitment
Letter, multiplied by the aggregate scheduled principal balance, as of the
Cut-off Date, of the Mortgage Loans listed on the Mortgage Loan Schedules, after
application of scheduled payments of principal due on or before the Cut-off Date
whether or not collected. The Purchase Price may be adjusted as stated in the
Commitment Letter.
In addition to the Purchase Price as described above, the Purchaser shall
pay to the Seller, at closing, accrued interest on the aggregate scheduled
principal amount of the Mortgage Loans at the weighted average Mortgage Loan
Remittance Rate from the Cut-off Date through the day prior to the Closing Date,
inclusive.
The Purchaser shall be entitled to (1) all scheduled principal due after
the Cut-off Date, (2) all other recoveries of principal collected after the
Cut-off Date (provided, however, that all scheduled payments of principal due on
or before the Cut-off Date and collected by the Seller after the Cut-off Date
shall belong to the Seller), and (3) all payments of interest on the Mortgage
Loans at the Mortgage Loan Remittance Rate (minus that portion of any such
payment which is allocable to the period prior to the Cut-off Date). The
principal balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a Due Date beyond the Cut-off Date shall not be applied to
the principal balance as of the Cut-off Date. Such prepaid amounts (minus
interest at the Servicing Fee Rate) shall be the property of the Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser for subsequent
remittance by the Seller to the Purchaser.
SECTION 5. Examination of Custodial Mortgage Files. Prior to the Closing
Date, the Seller shall (a) deliver to the Purchaser in escrow, for examination,
the Custodial Mortgage File for each Mortgage Loan, including a copy of the
Assignment of Mortgage, pertaining to each Mortgage Loan, or (b) make the
Custodial Mortgage Files and the Retained Mortgage Files available to the
Purchaser for examination at the Seller's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Seller. Such examination
may be made by the Purchaser or by any prospective purchaser of the Mortgage
Loans from the Purchaser, at any time before or after the Closing Date upon
prior reasonable notice to the Seller. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Custodial Mortgage Files and
the Retained Mortgage Files shall not affect the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other relief or remedy
as provided under the related Seller's Warranties and Servicing Agreement.
2
Prior to Seller's receipt of the Purchase Price, the Purchaser shall cause
the Custodian to act as bailee for the sole and exclusive benefit of the Seller
pursuant to the Custodial Agreement and act only in accordance with Seller's
instructions. Upon the Seller's receipt of the Purchase Price, the Seller shall
provide notification to the Custodian to release ownership of the Mortgage Loan
Documents specified above to the Purchaser. Such notification shall be in a form
of a written notice by facsimile or other electronic media, with a copy sent to
the Purchaser. Subsequent to such release, such Mortgage Loan Documents shall be
retained by the Custodian for the benefit of the Purchaser. All Mortgage Loan
Documents related to Mortgage Loans not purchased by the Purchaser on the
Closing Date, shall be maintained by the Custodian for the benefit of the Seller
and shall be returned to the Seller within two (2) Business Days after the
Closing Date.
SECTION 6. Representations, Warranties and Agreements of Seller. The Seller
agrees and acknowledges that it shall, as a condition to the consummation of the
transactions contemplated hereby, make the representations and warranties
specified in Section 3.01 and 3.02 of the Seller's Warranties and Servicing
Agreement, as of the Closing Date. The meaning of the term "Agreement" as used
in Sections 3.01 and 3.02 of the Seller's Warranties and Servicing Agreement
shall include this Agreement. The Seller, without conceding that the Mortgage
Loans are securities, hereby makes the following additional representations,
warranties and agreements which shall be deemed to have been made as of the
Closing Date:
a) neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loans, any
interest in any Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loans, any interest in any Mortgage Loans or
any other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loans, any interest in any Mortgage Loans or any
other similar security with, any Person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act or which would render the
disposition of any Mortgage Loans a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any Person to act, in such
manner with respect to the Mortgage Loans; and
b) the Seller has not dealt with any broker or agent or anyone else who
might be entitled to a fee or commission in connection with this
transaction other than the Purchaser.
SECTION 7. Representation, Warranties and Agreement of Purchaser. The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall have
been deemed to have been made as of the Closing Date.
a) the Purchaser understands that the Mortgage Loans have not been
registered under the Securities Act or the securities laws of any state;
3
b) the Purchaser is acquiring the Mortgage Loans for its own account only
and not for any other Person;
c) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Mortgage Loans;
d) the Purchaser has been furnished with all information regarding the
Mortgage Loans which it has requested from the Seller or the Company; and
e) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan, any
interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security from, or otherwise approached or negotiated with
respect to any Mortgage Loan, any interest in any Mortgage Loan or any
other similar security with, any Person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act or which would render the
disposition of any Mortgage Loan a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any Person to act, in such manner with
respect to the Mortgage Loans.
SECTION 8. Closing. The closing for the purchase and sale of the Mortgage
Loans, shall take place on the Closing Date. At the Purchaser's option, the
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree; or conducted in Person, at such place as the parties shall
agree.
The closing shall be subject to each of the following conditions:
a) all of the representations and warranties of the Seller under this
Agreement and under the Seller's Warranties and Servicing Agreement shall
be true and correct as of the Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a default under
this Agreement or an Event of Default under the related Seller's Warranties
and Servicing Agreement;
b) the Purchaser shall have received, or the Purchaser's attorneys shall
have received in escrow, all Closing Documents as specified in Section 9 of
this Agreement, in such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof;
c) the Seller shall have delivered and released to the Custodian all
documents required under the Seller's Warranties and Servicing Agreement;
and
d) all other terms and conditions of this Agreement and the Seller's
Warranties and Servicing Agreement shall have been complied with.
4
Subject to the foregoing conditions, the Purchaser shall pay to the Seller
on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 9. Closing Documents. With respect to the Mortgage Loans, the
Closing Documents shall consist of the following documents:
1. the Seller's Warranties and Servicing Agreement in three counterparts;
2. this Agreement in three counterparts;
3. an originally executed Side Letter (the "Side Letter") regarding
repurchase price, by and between the Seller and the Purchaser, dated
as of April 1, 2006;
4. the originally executed Custodial Assignment and Assumption Agreement
by and between the Purchaser and Seller dated as of April 26, 2006 in
three counter-parts assigning the Purchaser's rights as Initial
Servicer under the Custodial Agreement, dated as of April 1, 2000, by
and between the Purchaser, as owner and the Initial Servicer and Xxxxx
Fargo Bank, N.A., successor by merger to Xxxxx Fargo Bank Minnesota,
N.A. (the "Custodian");
5. the Mortgage Loan Schedules, one copy to be attached to each
counterpart of the Seller's Warranties and Servicing Agreement, to
each counterpart of this Agreement, and to each counterpart of the
Custodial Agreement, as the Mortgage Loan Schedules thereto;
6. an Officer's Certificate of the Seller;
7. a trust receipt and certification, as required under the Custodial
Agreement; and
8. an Opinion of Counsel of the Seller, in the form of Exhibit 2 hereto.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen, the legal fees and expenses of its attorneys and the costs and
expenses associated with the Custodian. The Seller shall be responsible for
reasonable costs and expenses associated with any preparation and recording of
the initial Assignments of Mortgage. All other costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including fees
for title policy endorsements and continuations and the Seller's attorney fees,
shall be paid by the Seller.
SECTION 11. Servicing. The Mortgage Loans shall be serviced by the Seller
in accordance with the terms of the applicable Seller's Warranties and Servicing
Agreement. The Seller shall be entitled to servicing fees calculated as provided
therein, at the Servicing Fee Rate shown on the first page of this Agreement
unless otherwise agreed by the parties.
5
SECTION 12. Financial Statements. The Seller understands that in connection
with the Purchaser's marketing of the Mortgage Loans, the Purchaser may request
from the Seller and make available to prospective purchasers a Consolidated
Statement of Operations of the Seller for the most recently completed two (2)
fiscal years respecting which such a statement is available, as well as a
Consolidated Statement of Condition at the end of the last two (2) fiscal years
covered by such Consolidated Statement of Operations. The Purchaser, upon
request, shall also make available any comparable interim statements to the
extent any such statements have been prepared by the Seller in a format intended
or otherwise suitable for the public at large. The Seller, upon request, agrees
to furnish promptly to the Purchaser copies of the statements specified above.
The Seller shall also make available information on its servicing performance
with respect to loans in its own portfolio and loans serviced for others (if
any), including foreclosure and delinquency ratios.
The Seller also agrees to allow access to a knowledgeable (as shall be
determined by the Seller) financial or accounting officer for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the Seller.
SECTION 13. Mandatory Delivery. The sale and delivery on the Closing Date
of the Mortgage Loans described on the related Mortgage Loan Schedule is
mandatory, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver the Mortgage
Loans on or before the Closing Date. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 14. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address shown on the first page hereof,
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice of communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 15. Severability Clause. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable
6
law, the parties hereto waive any provision of law which prohibits or renders
void or unenforceable any provision hereof. If the invalidity of any part,
provision, representation or warranty of this Agreement shall deprive any party
of the economic benefit intended to be conferred by this Agreement, the parties
shall negotiate, in good-faith, to develop a structure the economic effect of
which is as close as possible to the economic effect of this Agreement without
regard to such invalidity.
SECTION 16. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts. Each counterpart shall be deemed to be an original,
and all such counterparts shall constitute one and the same instrument. The
parties agree that this Agreement and signature pages thereof may be transmitted
between them by facsimile and that faxed signatures may constitute original
signatures and that a faxed signature page containing the signature of an
authorized individual (faxed or original) is binding on the respective parties.
XXXXXXX 00. Xxxxx of Delivery and Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the laws of the State of New York, except to the extent
preempted by Federal Law.
Each of the Seller and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Seller or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
SECTION 18. Further Agreements. The Purchaser and the Seller each agree to
execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without limiting the generality of the foregoing, the Seller shall
reasonably cooperate with the Purchaser in connection with the initial resales
of the Mortgage Loans by the Purchaser. In that connection, the Seller shall
provide to the Purchaser: (i) any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request, and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser in connection with such
resales. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION 19. Intention of the Parties. It is the intention of the parties
that the Purchaser is purchasing, and the Seller is selling, an undivided 100%
ownership interest in the Mortgage Loans and not a debt instrument of the Seller
or another security. Accordingly, the parties hereto each intend to treat the
transaction for Federal income tax purposes as a sale by the Seller, and a
7
purchase by the Purchaser, of the Mortgage Loans. The Purchaser shall have the
right to review the Mortgage Loans and the related Custodial Mortgage Files to
determine the characteristics of the Mortgage Loans which shall affect the
Federal income tax consequences of owning the Mortgage Loans and the Seller
shall cooperate with all reasonable requests made by the Purchaser in the course
of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the Purchaser.
SECTION 21. Waivers; Other Agreements. No term or provision of this
Agreement may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
SECTION 22. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 23. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
a) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
b) accounting terms not otherwise defined herein have the meanings assigned
to them in accordance with generally accepted accounting principles;
c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
d) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 24. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial
8
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
[Signatures Follow]
9
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date first above written.
XXXXXX BROTHERS BANK, FSB
(Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXX FARGO BANK, N.A.
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
10
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
(WFHM 2006-W26)
[Intentionally Omitted]
EXHIBIT 1-A
MORTGAGE LOAN SCHEDULE
(WFHM 2006-W27)
[Intentionally Omitted]
EXHIBIT 2
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Xxxxx Fargo Bank, N.A.
Mortgage Loan Series @
Dear Sir/Madam:
I am @ of Xxxxx Fargo Bank, N.A. and have acted as counsel to Xxxxx Fargo Bank,
N.A. (the "Company"), with respect to certain matters in connection with the
sale by the Company of the mortgage loans designated as Mortgage Loan Series @
(the "Mortgage Loans") pursuant to that certain Seller's Warranties and
Servicing Agreement and Mortgage Loan Purchase Agreement by and between the
Company and @ (the "Purchaser"), dated as of @, 2006, (the "Agreements"), which
sale is in the form of whole Mortgage Loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Seller's Warranties and
Servicing Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Mortgage Loan Purchase Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that:
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States and is
qualified to transact business.
2. The Company has the power to engage in the transactions contemplated by the
Agreements, the Custodial Agreement and all requisite power, authority and
legal right to execute and deliver the Agreements, the Custodial Agreement
and the Mortgage Loans, and to perform and observe the terms and conditions
of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Agreements, each dated as of @, 2006, by and between the Company
and the Purchaser, and (b) any other document delivered prior hereto or on
the date hereof in connection with the sale and servicing of the Mortgage
Loans in accordance with the Agreements was, at the respective times of
such signing and delivery, and is, as of the date hereof, duly elected or
appointed, qualified and acting as such officer or attorney-in-fact, and
the signatures of such persons appearing on such documents are their
genuine signatures.
4. Each of the Agreements, the Custodial Agreement and the Mortgage Loans, has
been duly authorized, executed and delivered by the Company and is a legal,
valid and binding agreement enforceable in accordance with its terms
against the Company, subject to the effect of insolvency, liquidation,
conservatorship and other similar laws administered by the Federal Deposit
Insurance Corporation affecting the enforcement of contract obligations of
insured banks and subject to the application of the rules of equity,
including those respecting the availability of specific performance, none
of which will materially interfere with the realization of the benefits
provided thereunder or with the Purchaser's ownership of the Mortgage
Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in order
to complete the transactions contemplated by the Agreements and the
Custodial Agreement in order to execute the endorsements to the Mortgage
Notes and the assignments of the Mortgages, and the original or facsimile
signature of the officer at the Company executing the Agreements, the
Custodial Agreement, the endorsements to the Mortgage Notes and the
assignments of the Mortgages represents the legal and valid signature of
said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions
contemplated by the Agreements and the Custodial Agreement; or (ii) any
required consent, approval, authorization or order has been obtained by the
Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws of
the Company, the terms of any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties
or assets of the Company or in any material impairment of the right or
ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which
would draw into question the validity of the Agreements, and the Custodial
Agreement, or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the terms of the
Agreements and the Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested to
the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate such
proceedings; nor have I regarded any legal or governmental actions,
investigations or proceedings as including those that are conducted by
state or federal authorities in connection with their routine regulatory
activities. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient fully to transfer all
right, title and interest of the Company thereto as noteholder and
mortgagee, apart from the rights to service the Mortgage Loans pursuant to
the Agreements.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes to
the Purchaser. Upon the completion of the endorsement of the Mortgage Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the
Custodian of the completed assignments of the Mortgages, and the delivery
of the original endorsed Mortgage Notes to the Custodian would be
sufficient to permit the entity to which such Mortgage Note is initially
endorsed at the Purchaser's direction, and to whom such assignment of
Mortgages is initially assigned at the Purchaser's direction, to avail
itself of all protection available under applicable law against the claims
of any present or future creditors of the Company, and would be sufficient
to prevent any other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by the Company from
being enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
@
@
@/@
