FLOW INTERIM SERVICING AGREEMENT
between
Xxxxxx Brothers Bank, FSB,
Purchaser
and
Greenpoint Mortgage Funding, Inc.
Interim Servicer
Dated as of December 12, 2001
CONVENTIONAL FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
Group No. 2001-
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................................................1
ARTICLE II
SERVICING
Section 2.01 Interim Servicer to Act as Servicer...........................................................5
Section 2.02 Liquidation of Mortgage Loans.................................................................6
Section 2.03 Collection of Mortgage Loan Payments..........................................................7
Section 2.04 Establishment of and Deposits to Custodial Account............................................7
Section 2.05 Permitted Withdrawals From Custodial Account..................................................8
Section 2.06 Establishment of and Deposits to Escrow Account...............................................9
Section 2.07 Permitted Withdrawals From Escrow Account....................................................10
Section 2.08 Payment of Taxes, Insurance and Other Charges................................................10
Section 2.09 PMI Obligations..............................................................................10
Section 2.10 Protection of Accounts.......................................................................11
Section 2.11 Maintenance of Hazard Insurance..............................................................11
Section 2.12 Maintenance of Mortgage Impairment Insurance.................................................13
Section 2.13 Maintenance of Fidelity Bond and Errors and Omissions Insurance..............................13
Section 2.14 Inspections..................................................................................14
Section 2.15 Restoration of Mortgaged Property............................................................14
Section 2.16 Maintenance of PMI Policy; Claims............................................................14
Section 2.17 Title, Management and Disposition of REO Property............................................15
Section 2.18 Permitted Withdrawals with respect to REO Property...........................................16
Section 2.19 Real Estate Owned Reports....................................................................16
Section 2.20 Liquidation Reports..........................................................................16
Section 2.21 Notification of Adjustments..................................................................17
Section 2.22 Reports of Foreclosures and Abandonments of Mortgaged Property...............................17
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances..................................................................................17
Section 3.02 Statements to Purchaser......................................................................17
Section 3.03 Principal and Interest Advances by Interim Servicer..........................................18
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property..............................................................18
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files......................................19
Section 4.03 Servicing Compensation.......................................................................19
Section 4.04 Annual Statement as to Compliance............................................................20
Section 4.05 Annual Independent Public Accountants' Servicing Report......................................20
Section 4.06 Right to Examine Interim Servicer Records....................................................20
ARTICLE V
INTERIM SERVICER TO COOPERATE
Section 5.01 Provision of Information.....................................................................20
Section 5.02 Financial Statements; Servicing Facilities...................................................21
ARTICLE VI
TERMINATION
Section 6.01 Damages......................................................................................21
Section 6.02 Termination Upon Transfer of Servicing.......................................................21
Section 6.03 Servicing Transfer Provisions................................................................22
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date.....................................24
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification..............................................................................25
Section 8.02 Limitation on Liability of Interim Servicer and Others.......................................26
Section 8.03 Limitation on Resignation and Assignment by Interim Servicer.................................26
Section 8.04 Assignment by Purchaser......................................................................27
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
Section 9.01 Authority and Capacity.......................................................................27
Section 9.02 Assistance...................................................................................27
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ARTICLE X
REPRESENTATIONS AND WARRANTIES OF INTERIM SERVICER
Section 10.01 Due Organization and Authority...............................................................28
Section 10.02 Ordinary Course of Business..................................................................28
Section 10.03 No Conflicts.................................................................................28
Section 10.04 Ability to Service...........................................................................28
Section 10.05 Ability to Perform...........................................................................28
Section 10.06 No Litigation Pending........................................................................28
Section 10.07 No Consent Required..........................................................................29
Section 10.08 No Untrue Information........................................................................29
Section 10.09 Computer Systems.............................................................................29
ARTICLE XI
DEFAULT
Section 11.01 Events of Default............................................................................29
Section 11.02 Waiver of Defaults...........................................................................30
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices......................................................................................31
Section 12.02 Waivers......................................................................................31
Section 12.03 Entire Agreement; Amendment..................................................................31
Section 12.04 Execution; Binding Effect....................................................................31
Section 12.05 Headings.....................................................................................32
Section 12.06 Applicable Law...............................................................................32
Section 12.07 Relationship of Parties......................................................................32
Section 12.08 Severability of Provisions...................................................................32
Section 12.09 Recordation of Assignments of Mortgage.......................................................32
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EXHIBITS
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EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
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FLOW INTERIM SERVICING AGREEMENT
This Flow Interim Servicing Agreement (the "Agreement") is
entered into as of the 12th day of December 2001, by and between GREENPOINT
MORTGAGE FUNDING INC. (the "Interim Servicer"), a California corporation and
XXXXXX BROTHERS BANK, FSB, a Delaware corporation (the "Purchaser").
WHEREAS, the Purchaser and Interim Servicer entered into a
Mortgage Loan Purchase and Warranties Agreement dated as of the date hereof (the
"Purchase Agreement") pursuant to which the Purchaser shall, from time to time,
purchase from the Seller certain conventional, residential, fixed and adjustable
rate first and second lien mortgage loans (the "Mortgage Loans") delivered as
whole loans on a servicing released basis (each delivery of Mortgage Loans, a
"Mortgage Loan Package"); and
WHEREAS, the Purchaser desires to have the Interim Servicer
service the Mortgage Loans in each Mortgage Loan Package during the period
between the related Closing Date and the related Transfer Date (the "Interim
Period"), the Interim Servicer desires to service and administer the Mortgage
Loans on behalf of the Purchaser during the Interim Period, and the parties
desire to provide the terms and conditions of such interim servicing by the
Interim Servicer.
NOW, THEREFORE, in consideration of the mutual covenants made
herein and for other good and valuable consideration the sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise
defined herein have the respective meanings set forth in the Purchase Agreement.
The following terms are defined as follows (except as otherwise agreed by the
parties).
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.
Agreement: This agreement between the Purchaser and the
Interim Servicer for the interim servicing and administration of the Mortgage
Loans.
Custodial Account: The separate account or accounts created
and maintained pursuant to Section 2.04.
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.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, or any agency or instrumentality of
the United States of America the obligations of which are backed by the
full faith and credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates
of deposits of, or bankers' acceptances issued by, any depository
institution or trust company incorporated or organized under the laws
of the United States of America or any state thereof and subject to
supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment or contractual
commitment providing for such investment the commercial paper or other
short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding company) are
rated "P-1" by Xxxxx'x Investors Service, Inc. and the long-term debt
obligations of such holding company) are rated "P-1" by Xxxxx'x
Investors Service, Inc. and the long-term debt obligations of such
depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the long-term debt obligations of such
holding company) are rated at least "Aa" by Xxxxx'x Investors Service,
Inc.
provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: 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 document.
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Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
Fidelity Bond: A fidelity bond to be maintained by the Interim
Servicer pursuant to Section 2.13.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx
Mae Servicing Guide and all amendments or additions thereto.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interim Period: The period between the related Closing Date
and the related Transfer Date.
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.
Mortgage Impairment Insurance Policy: A mortgage impairment or
blanket hazard insurance policy as described in Section 2.12.
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 Mortgage Interest Rate minus the Servicing Fee.
PMI Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer, as required by this Agreement with respect to
certain Mortgage Loans.
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.
Purchase Agreement: The Flow Mortgage Loan Purchase and
Warranties Agreement between the Purchaser and the Interim Servicer related to
the purchase of the Mortgage Loans dated as of the related Cut-off Date.
Qualified Depository: A depository the accounts of which are
insured by the FDIC through the BIF or the SAIF and the debt obligations of
which are rated AA or better by Standard & Poor's Corporation.
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 Xxx or Xxxxxxx Mac.
Remittance Date: The 10th day (or if such 10th day is not a
Business Day, the first Business Day immediately following) of any month,
beginning with the first Remittance Date.
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REO Disposition: The final sale by the Interim Servicer of any
REO Property.
REO Disposition Proceeds: All amounts received with respect to
an REO Disposition pursuant to Section 2.17.
REO Property: A Mortgaged Property acquired by the Interim
Servicer on behalf of the Purchaser through foreclosure or by deed in lieu of
foreclosure, as described in Section 2.17.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Interim Servicer of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of the Mortgaged Property if the Mortgaged Property is acquired
in satisfaction of the Mortgage and (d) compliance with the obligations under
Section 2.08.
Servicing Fee: With respect to each Mortgage Loan, an amount
equal to $7.00 per month. Such fee shall be payable monthly and shall be pro
rated for any portion of a month during which the Mortgage Loans is serviced
pursuant to this Agreement. 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 interest from Liquidation
Proceeds, to the extent permitted by Section 2.05) of such Monthly Payment
collected by the Interim Servicer, or as otherwise provided under Section 2.05.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian for the
benefit of the Purchaser and copies of the Mortgage Loan Documents listed on
Exhibit B to the Purchase Agreement.
Servicing Officer: Any officer of the Interim Servicer
involved in or responsible for, the administration and servicing of the Mortgage
Loans whose name appears on a list of servicing officers furnished by the
Interim Servicer to the Purchaser upon request, as such list may from time to
time be amended.
Transfer Date: With respect to any Mortgage Loan Package, the
date mutually agreed upon by the Interim Servicer and the Purchaser and set
forth on the Acknowledgment Agreement, which shall not be more than 60 days
following the related Closing Date, unless Purchaser notifies the Interim
Servicer that a longer period of time is needed.
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ARTICLE II
SERVICING
Section 2.01 Interim Servicer to Act as Servicer. With respect
to the Mortgage Loans in each Mortgage Loan Package purchased by the Purchaser
from the Interim Servicer, from and after the related Closing Date the Interim
Servicer, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone, to do any
and all things in connection with such servicing and administration which the
Interim Servicer may deem necessary or desirable, consistent with the terms of
this Agreement and with Accepted Servicing Practices.
Consistent with the terms of this Agreement, the Interim
Servicer may waive, modify or vary any term of any Mortgage Loan or consent to
the postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Interim Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser, provided, however, that unless the Interim
Servicer has obtained the prior written consent of the Purchaser, the Interim
Servicer shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Interest Rate, defer or forgive the payment of
principal or interest, reduce or increase the outstanding principal balance
(except for actual payments of principal) or change the final maturity date on
such Mortgage Loan. In the event of any such modification which permits the
deferral of interest or principal payments on any Mortgage Loan, the Interim
Servicer shall, on the Business Day immediately preceding the Remittance Date in
any month in which any such principal or interest payment has been deferred,
deposit in the Custodial Account from its own funds, in accordance with Section
2.04, 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 Interim Servicer
shall be entitled to reimbursement for such advances to the same extent as for
all other advances made pursuant to Section 2.05. Without limiting the
generality of the foregoing, the Interim Servicer 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 Interim Servicer, the Purchaser shall furnish the Interim
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Interim Servicer to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Interim
Servicer shall employ procedures (including collection procedures) and exercise
the same care that it customarily employs and exercises in servicing and
administering mortgage loans for its own account, giving due consideration to
Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, and the Purchaser's reliance on the Interim
Servicer.
The Interim Servicer shall keep at its servicing office books
and records in which, subject to such reasonable regulations as it may
prescribe, the Interim Servicer shall note transfers of Mortgage Loans. No
transfer of a Mortgage Loan may be made unless such transfer is in compliance
with the terms hereof. For the purposes of this Agreement, Interim Servicer
shall be under no obligation to deal with any Person with respect to this
Agreement or the Mortgage Loans unless the Interim Servicer has been notified of
such transfers as provided in this Section 2.01. The Purchaser may sell and
transfer, in whole or in part, the Mortgage Loans, provided that no such sale
and transfer shall be binding upon Interim Servicer unless such transferee shall
agree in writing in the form of the Assignment and Assumption Agreement attached
to the Purchase Agreement as Exhibit H, to be bound by the terms of this
Agreement and the Purchase Agreement, and an executed copy of the same shall
have been delivered to the Interim Servicer. Upon receipt thereof, Interim
Servicer shall xxxx its books and records to reflect the ownership of the
Mortgage Loans by such assignee, and the previous Purchaser shall be released
from its obligations hereunder. This Agreement shall be binding upon and inure
to the benefit of the Purchaser and Interim Servicer and their permitted
successors, assignees and designees.
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Section 2.02 Liquidation of Mortgage Loans. In the event that
any payment due under any Mortgage Loan and not postponed pursuant to Section
2.01 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 Interim
Servicer shall take such action as (1) the Interim Servicer would take under
similar circumstances with respect to a similar mortgage loan held for its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, (3) the Interim Servicer 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 2.01 and remains delinquent for a period of 90 days or any other default
continues for a period of 90 days beyond the expiration of any grace or cure
period, the Interim Servicer shall commence foreclosure proceedings, provided
that, prior to commencing foreclosure proceedings, the Interim Servicer shall
notify the Purchaser in writing of the Interim Servicer's intention to do so,
and the Interim Servicer shall not commence foreclosure proceedings if the
Purchaser objects to such action within 10 Business Days of receiving such
notice. In such connection, the Interim Servicer shall from its own funds make
all necessary and proper Servicing Advances, provided, however, that the Interim
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, 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 2.05) or through Insurance Proceeds
(respecting which it shall have similar priority).
Section 2.03 Collection of Mortgage Loan Payments.
Continuously from the related Cut-off Date until the related Transfer Date the
Interim Servicer shall proceed diligently to collect all payments due under each
of the Mortgage Loans when the same shall become due and payable and shall take
special care in ascertaining and estimating Escrow Payments and all other
charges that will become due and payable with respect to the Mortgage Loans and
each related 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 2.04 Establishment of and Deposits to Custodial
Account. The Interim Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans 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 "Greenpoint
Mortgage Funding Inc. in trust for Xxxxxx Brothers Bank, FSB, Residential Fixed
and Adjustable Rate Mortgage Loans, Group No. 2001- ___ and various Mortgagors".
The Custodial Account shall be established with a Qualified Depository
acceptable to the Purchaser. Any funds deposited in the Custodial Account shall
at all times be fully insured to the full extent permitted under applicable law.
Funds deposited in the Custodial Account may be drawn on by the Interim Servicer
in accordance with Section 2.05. The creation of any Custodial Account shall be
evidenced by a certification in the form of Exhibit 2 hereto, in the case of an
account established with the Interim Servicer, or by a letter agreement in the
form of Exhibit 3 hereto, in the case of an account held by a depository other
than the Interim Servicer. A copy of such certification or letter agreement
shall be furnished to the Purchaser and, upon request, to any subsequent
Purchaser.
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The Interim Servicer shall deposit in the Custodial Account on
a daily basis, and retain therein, the following collections received by the
Interim Servicer after the related Cut-off Date (other than with respect to each
LPMI Loan, in the amount of the LPMI Fee):
(i) all payments on account of principal on the Mortgage
Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.11 (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 2.15), Section 2.12 and Section 2.16;
(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 2.15;
(vi) any amount required to be deposited in the Custodial
Account pursuant to Section 2.01, 2.10, 2.17, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase of
any Mortgage Loan pursuant to the terms of the Purchase Agreement; and
(viii) any amounts required to be deposited by the Interim
Servicer pursuant to Section 2.11 in connection with the deductible
clause in any blanket hazard insurance policy.
(ix) any prepayment penalties, late payment charges and
assumption fees received in connection with the Mortgage Loans.
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 assumption
fees, to the extent permitted by Section 4.01, need not be deposited by the
Interim Servicer into the Custodial Account. Any interest paid on funds
deposited in the Custodial Account by the depository institution shall accrue to
the benefit of the Interim Servicer and the Interim Servicer shall be entitled
to retain and withdraw such interest from the Custodial Account pursuant to
Section 2.05.
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Section 2.05 Permitted Withdrawals From Custodial Account. The
Interim Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in
the manner provided for in Section 3.01;
(ii) to reimburse itself for unreimbursed Servicing Advances,
any unpaid Servicing Fees and for unreimbursed advances of Interim
Servicer funds made pursuant to Section 2.17, the Interim Servicer's
right to reimburse itself pursuant to this subclause (iii) with respect
to any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may
be collected by the Interim Servicer from the Mortgagor or otherwise
relating to the Mortgage Loan, it being understood that, in the case of
any such reimbursement, the Interim Servicer's right thereto shall be
prior to the rights of the Purchaser except that, where the Interim
Servicer is required to repurchase a Mortgage Loan pursuant to the
terms of the Purchase Agreement or Section 4.02 of this Agreement, the
Interim Servicer'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 pay itself interest on funds deposited in the
Custodial Account;
(iv) to reimburse itself for expenses incurred and
reimbursable to it pursuant to Section 4.03;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(vi) to withdraw funds deposited in error.
In the event that the Custodial Account is interest bearing,
on each Remittance Date, the Interim Servicer shall withdraw all funds from the
Custodial Account except for those amounts which, pursuant to Section 3.01, the
Interim Servicer is not obligated to remit on such Remittance Date. The Interim
Servicer may use such withdrawn funds only for the purposes described in this
Section 2.05.
Section 2.06 Establishment of and Deposits to Escrow Account.
The Interim Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Greenpoint Mortgage Funding Inc., in trust for Xxxxxx Brothers Bank, FSB
Residential Fixed and Adjustable Rate Mortgage Loans, Group No. 2001- ____, and
various Mortgagors". The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the Interim
Servicer in accordance with Section 2.07. The creation of any Escrow Account
shall be evidenced by a certification in the form of Exhibit 4 hereto, in the
case of an account established with the Interim Servicer, or by a letter
agreement in the form of Exhibit 5 hereto, in the case of an account held by a
depository other than the Interim Servicer. A copy of such certification shall
be furnished to the Purchaser and, upon request, to any subsequent Purchaser.
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The Interim Servicer shall deposit in the Escrow Account or
Accounts on a daily basis, 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; and
(ii) all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or
repair of any Mortgaged Property.
The Interim Servicer shall make withdrawals from the Escrow
Account only to effect such payments as are required under this Agreement, as
set forth in Section 2.07. The Interim Servicer shall be entitled to retain any
interest paid on funds deposited in the Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid to
the Mortgagor. To the extent required by law, the Interim Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Interim
Servicer only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting
Escrow Payments for the related Mortgage;
(ii) to reimburse the Interim Servicer for any Servicing
Advance made by the Interim Servicer pursuant to Section 2.08 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 restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.15;
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(vi) to pay to the Interim Servicer, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Interim Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Interim Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. To the extent that a Mortgage does not
provide for Escrow Payments, the Interim Servicer shall determine that any such
payments are made by the Mortgagor at the time they first become due. The
Interim Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payment of all such charges irrespective of each
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments, and the Interim Servicer shall make advances from its own funds
to effect such payments.
Section 2.09 PMI Obligations. The Interim Servicer shall
comply with all provisions of applicable state and federal law relating to the
cancellation of, or collection of premiums with respect to, PMI Policies,
including, but not limited to, the provisions of the Homeowners Protection Act
of 1998, and all regulations promulgated thereunder, as amended from time to
time. If the Mortgagor fails to pay any PMI Policy premium, the Interim Servicer
shall be obligated to make such premium payments.
Section 2.10 Protection of Accounts. The Interim Servicer may
transfer the Custodial Account or the Escrow Account to a different Qualified
Depository from time to time. Such transfer shall be made only upon obtaining
the consent of the Purchaser, which consent shall not be withheld unreasonably.
The Interim Servicer 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.
Amounts on deposit in the Custodial Account and the Escrow
Account may at the option of the Interim Servicer be invested in Eligible
Investments; provided that in the event that amounts on deposit in the Custodial
Account or the Escrow Account exceed the amount fully insured by the FDIC (the
"Insured Amount") the Interim Servicer shall be obligated to invest the excess
amount over the Insured Amount in Eligible Investments on the same Business Day
as such excess amount becomes present in the Custodial Account or the Escrow
Account. Any such Eligible Investment shall mature no later than the
Determination Date next following the date of such Eligible Investment,
provided, however, that if such Eligible Investment is an obligation of a
Qualified Depository (other than the Interim Servicer) that maintains the
Custodial Account or the Escrow Account, then such Eligible Investment may
mature on such Remittance Date. Any such Eligible Investment shall be made in
the name of the Interim Servicer in trust for the benefit of the Purchaser. All
income on or gain realized from any such Eligible Investment shall be for the
benefit of the Interim Servicer and may be withdrawn at any time by the Interim
Servicer. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Interim
Servicer out of its own funds immediately as realized.
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Section 2.11 Maintenance of Hazard Insurance. The Interim
Servicer shall cause to be maintained for each Mortgage Loan, hazard insurance
such that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer rated A:VI or better in the current Best's Key Rating Guide
("Best's") 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) the maximum insurable
value of the improvements securing such Mortgage Loan and (ii) the greater of
(a) the outstanding principal balance of the Mortgage Loan and (b) an amount
such that the proceeds thereof shall be sufficient to prevent the Mortgagor or
the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related
Mortgaged Property was located in an area identified in the Federal Register by
the Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) 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 rated A:VI or better
in Best's 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 Interim Servicer determines in accordance with
applicable law and pursuant to the FNMA Guides that a Mortgaged Property is
located in a special flood hazard area and is not covered by flood insurance or
is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Interim Servicer shall notify the
related Mortgagor that the Mortgagor must obtain such flood insurance coverage,
and if said Mortgagor fails to obtain the required flood insurance coverage
within forty-five (45) days after such notification, the Interim Servicer shall
immediately force place the required flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project,
the Interim Servicer shall verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is being
maintained in accordance with then current Xxxxxx Mae requirements, and secure
from the owner's association its agreement to notify the Interim Servicer
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.
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The Interim Servicer shall cause to be maintained on each
Mortgaged Property earthquake or such other or additional insurance as may be
required pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required to
conform with Accepted Servicing Practices.
In the event that the Purchaser or the Interim Servicer shall
determine that the Mortgaged Property should be insured against loss or damage
by hazards and risks not covered by the insurance required to be maintained by
the Mortgagor pursuant to the terms of the Mortgage, the Interim Servicer shall
communicate and consult with the Mortgagor with respect to the need for such
insurance and bring to the Mortgagor's attention the desirability of protection
of the Mortgaged Property.
All policies required hereunder shall name the Interim
Servicer as loss payee and shall be endorsed with standard or New York mortgagee
clauses, without contribution, which shall provide for at least 30 days prior
written notice of any cancellation, reduction in amount or material change in
coverage.
The Interim Servicer shall not interfere with the Mortgagor's
freedom of choice in selecting either his insurance carrier or agent, provided,
however, that the Interim Servicer shall not accept any such insurance policies
from insurance companies unless such companies are rated A:VI or better in
Best's and are licensed to do business in the jurisdiction in which the
Mortgaged Property is located. The Interim Servicer shall determine that such
policies provide sufficient risk coverage and amounts, that they insure the
property owner, and that they properly describe the property address. The
Interim Servicer shall furnish to the Mortgagor a formal notice of expiration of
any such insurance in sufficient time for the Mortgagor to arrange for renewal
coverage by the expiration date.
Pursuant to Section 2.04, any amounts collected by the Interim
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the related Mortgaged
Property, or property acquired in liquidation of the Mortgage Loan, or to be
released to the Mortgagor, in accordance with the Interim Servicer's normal
servicing procedures as specified in Section 2.15) shall be deposited in the
Custodial Account subject to withdrawal pursuant to Section 2.05.
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Section 2.12 Maintenance of Mortgage Impairment Insurance. In
the event that the Interim Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 2.11 and
otherwise complies with all other requirements of Section 2.11, it shall
conclusively be deemed to have satisfied its obligations as set forth in Section
2.11. Any amounts collected by the Interim Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 2.11, and there
shall have been a loss which would have been covered by such policy, the Interim
Servicer shall deposit in the Custodial Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to be deposited from the Interim Servicer's funds, without
reimbursement therefor. Upon request of the Purchaser, the Interim Servicer
shall cause to be delivered to the Purchaser a certified true copy of such
policy and a statement from the insurer thereunder that such policy shall in no
event be terminated or materially modified without 30 days' prior written notice
to the Purchaser.
Section 2.13 Maintenance of Fidelity Bond and Errors and
Omissions Insurance. The Interim Servicer 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 ("Interim Servicer
Employees"). Any such Fidelity Bond and Errors and Omissions Insurance Policy
shall be in the form of the Mortgage Banker's Blanket Bond and shall protect and
insure the Interim Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such Interim
Servicer Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Interim Servicer against losses in connection
with the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 2.13 requiring such Fidelity Bond and Errors and Omissions Insurance
Policy shall diminish or relieve the Interim Servicer from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by Xxxxxx Xxx in the Xxxxxx Mae Guides or by Xxxxxxx Mac in the Xxxxxxx
Mac Interim Servicers' & Servicers' Guide. Upon the request of the Purchaser,
the Interim Servicer shall cause to be delivered to the Purchaser a certified
true copy of such fidelity bond and insurance policy and a statement from the
surety and the insurer that such fidelity bond and insurance policy shall in no
event be terminated or materially modified without 30 days' prior written notice
to the Purchaser.
Section 2.14 Inspections. The Interim Servicer shall inspect
the Mortgaged Property as often as deemed necessary by the Interim Servicer to
assure itself that the value of the Mortgaged Property is being preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent, the Interim
Servicer immediately shall inspect the Mortgaged Property and shall conduct
subsequent inspections in accordance with Accepted Servicing Practices or as may
be required by the primary mortgage guaranty insurer. The Interim Servicer shall
keep a written report of each such inspection.
Section 2.15 Restoration of Mortgaged Property. The Interim
Servicer 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. At a minimum, the Interim Servicer
shall comply with the following conditions in connection with any such release
of Insurance Proceeds or Condemnation Proceeds:
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(i) the Interim Servicer shall receive satisfactory
independent verification of completion of repairs and issuance of any
required approvals with respect thereto;
(ii) the Interim Servicer shall take all steps necessary to
preserve the priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and
materialmen's liens;
(iii) the Interim Servicer shall verify that the Mortgage Loan
is not in default; and
(iv) pending repairs or restoration, the Interim Servicer
shall place the Insurance Proceeds or Condemnation Proceeds in the
Escrow Account.
If the Purchaser is named as an additional loss payee, the
Interim Servicer is hereby empowered to endorse any loss draft issued in respect
of such a claim in the name of the Purchaser.
Section 2.16 Maintenance of PMI Policy and LPMI Policy;
Claims.
(a) With respect to each Mortgage Loan with a LTV in excess of
80%, the Interim Servicer shall:
(i) with respect to Mortgage Loans which are not LPMI Loans,
in accordance with state and federal laws, the Interim Servicer shall,
without any cost to the Purchaser, maintain or cause the Mortgagor to
maintain in full force and effect a PMI Policy insuring that portion of
the Mortgage Loan in excess of 75% of value, and shall pay or shall
cause the Mortgagor to pay the premium thereon on a timely basis, until
the LTV of such Mortgage Loan is reduced to 80%. In the event that such
PMI Policy shall be terminated, the Interim Servicer shall obtain from
another Qualified Insurer a comparable replacement policy, with a total
coverage equal to the remaining coverage of such terminated PMI Policy.
If the insurer shall cease to be a Qualified Insurer, the Interim
Servicer 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 Interim Servicer shall in no
event have any responsibility or liability for any failure to recover
under the PMI Policy for such reason. If the Interim Servicer
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 Interim Servicer
shall not take any action which would result in noncoverage under any
applicable PMI Policy of any loss which, but for the actions of the
Interim Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered
into pursuant to Section 4.01, the Interim Servicer shall promptly
notify the insurer under the related PMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of
such PMI Policy and shall take all actions which may be required by
such insurer as a condition to the continuation of coverage under such
PMI Policy. If such PMI Policy is terminated as a result of such
assumption or substitution of liability, the Interim Servicer shall
obtain a replacement PMI Policy as provided above.
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(ii) with respect to LPMI Loans, maintain in full force and
effect an LPMI Policy insuring that portion of the Mortgage Loan in
excess of 75% (or such other percentage as stated in the related
Acknowledgment Agreement) of value, and from time to time, withdraw the
LPMI Fee with respect to such LPMI Loan from the Custodial Account in
order to pay the premium thereon on a timely basis, until the LTV of
such Mortgage Loan is reduced to 80%. In the event that the interest
payments made with respect to any LPMI Loan are less than the LPMI Fee,
the Interim Servicer shall advance from its own funds the amount of any
such shortfall in the LPMI Fee, in payment of the premium on the
related LPMI Policy. Any such advance shall be a Servicing Advance
subject to reimbursement pursuant to the provisions on Section 2.05. In
the event that such LPMI Policy shall be terminated, the Interim
Servicer shall obtain from another Qualified Insurer a comparable
replacement policy, with a total coverage equal to the remaining
coverage of such terminated LPMI Policy, at substantially the same fee
level. If the insurer shall cease to be a Qualified Insurer, the
Interim Servicer shall determine whether recoveries under the LPMI
Policy are jeopardized for reasons related to the financial condition
of such insurer, it being understood that the Interim Servicer shall in
no event have any responsibility or liability for any failure to
recover under the LPMI Policy for such reason. If the Interim Servicer
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 Interim Servicer
shall not take any action which would result in noncoverage under any
applicable LPMI Policy of any loss which, but for the actions of the
Interim Servicer would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered
into pursuant to Section 6.01, the Interim Servicer shall promptly
notify the insurer under the related LPMI Policy, if any, of such
assumption or substitution of liability in accordance with the terms of
such LPMI 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 LPMI Policy is terminated as a result of such
assumption or substitution of liability, the Interim Servicer shall
obtain a replacement LPMI Policy as provided above.
(b) In connection with its activities as servicer, the Interim
Servicer 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 or LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Pursuant to Section 2.04, any
amounts collected by the Interim Servicer under any PMI Policy or LPMI Policy
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 2.05.
(c) Purchaser, in its sole discretion, at any time, may (i)
either obtain an additional PMI Policy on any Mortgage Loan which already has a
PMI Policy in place, or (ii) obtain a PMI Policy for any Mortgage Loan which
does not already have a PMI Policy in place. In any event, the Interim Servicer
agrees to administer such PMI Policies in accordance with the Agreement or any
Reconstitution Agreement.
Section 2.17 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 Interim Servicer, or such other name as the
Purchaser should designate. 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.
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The Interim Servicer shall manage, conserve, protect and
operate each REO Property for the Purchaser solely for the purpose of its prompt
disposition and sale. The Interim Servicer, either itself or through an agent
selected by the Interim Servicer, shall manage, conserve, protect and operate
the REO Property in the same manner that it manages, conserves, protects and
operates other foreclosed property for its own account, and in the same manner
that similar property in the same locality as the REO Property is managed. The
Interim Servicer shall attempt to sell the same (and may temporarily rent the
same for a period not greater than one year, except as otherwise provided below)
on such terms and conditions as the Interim Servicer deems to be in the best
interest of the Purchaser.
The Interim Servicer shall use its best efforts to dispose of
the REO Property as soon as possible and shall sell such REO Property in any
event within one year after title has been taken to such REO Property, unless
the Interim Servicer determines, and gives an appropriate notice to the
Purchaser to such effect, that a longer period is necessary for the orderly
liquidation of such REO Property. If a period longer than one year is permitted
under the foregoing sentence and is necessary to sell any REO Property, (i) the
Interim Servicer shall report monthly to the Purchaser as to the progress being
made in selling such REO Property and (ii) if, with the written consent of the
Purchaser, a purchase money mortgage is taken in connection with such sale, such
purchase money mortgage shall name the Interim Servicer as mortgagee, and such
purchase money mortgage shall not be held pursuant to this Agreement, but
instead a separate participation agreement among the Interim Servicer and
Purchaser shall be entered into with respect to such purchase money mortgage.
The Interim Servicer shall also maintain on each REO Property
fire and hazard insurance with extended coverage in an amount which is at least
equal to the maximum insurable value of the improvements which are a part of
such property, liability insurance and, to the extent required and available
under the Flood Disaster Protection Act of 1973, as amended, flood insurance in
the amount required above.
The disposition of REO Property shall be carried out by the
Interim Servicer at such price, and upon such terms and conditions, as the
Interim Servicer 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 Interim Servicer shall reimburse itself for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed advances
made pursuant to this Section, and 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.
With respect to each REO Property, the Interim Servicer shall
hold all funds collected and received in connection with the operation of the
REO Property in the Custodial Account. The Interim Servicer shall cause to be
deposited on a daily basis upon the receipt thereof in each Custodial Account
all revenues received with respect to the conservation and disposition of the
related REO Property.
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Notwithstanding the foregoing, at any time and from time to
time, the Purchaser may at its election terminate this Agreement with respect to
one or more REO Properties as provided by Section 6.03(c).
Section 2.18 Permitted Withdrawals with respect to REO
Property. The Interim Servicer shall withdraw REO funds on deposit in the
Custodial Account with respect to each related REO Property necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 2.11 and the fees
of any managing agent acting on behalf of the Interim Servicer. The Interim
Servicer 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 Section 2.17
and of any reserves reasonably required from time to time to be maintained to
satisfy anticipated liabilities for such expenses).
Section 2.19 Real Estate Owned Reports. Together with the
statement furnished pursuant to Section 2.20, the Interim Servicer shall furnish
to the Purchaser on or before the 10th day of each month a statement with
respect to any REO Property covering the operation of such REO Property for the
previous month and the Interim Servicer's efforts in connection with the sale of
such REO Property and any rental of such REO Property incidental to the sale
thereof for the previous month. That statement shall be accompanied by such
other information as the Purchaser shall reasonably request.
Section 2.20 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 Interim Servicer shall submit to the Purchaser
a liquidation report with respect to such Mortgaged Property.
Section 2.21 Notification of Adjustments. With respect to each
ARM Mortgage Loan, the Interim Servicer 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 Interim
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. The Interim Servicer shall promptly,
upon written request therefor, deliver to the Purchaser such notifications and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by the Interim
Servicer or the receipt of notice from the Purchaser that the Interim Servicer
has failed to adjust a Mortgage Interest Rate in accordance with the terms of
the related Mortgage Note, the Interim Servicer shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or deferral
caused the Purchaser thereby.
Section 2.22 Reports of Foreclosures and Abandonments of
Mortgaged Property. Following the foreclosure sale or abandonment of any
Mortgaged Property, the Interim Servicer shall report such foreclosure or
abandonment as required pursuant to Section 6050J of the Code.
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ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Interim
Servicer 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 2.05), plus (b) all amounts, if any,
which the Interim Servicer is obligated to distribute pursuant to Section 2.03.
With respect to any remittance received by the Purchaser after
the second Business Day following the Business Day on which such payment was
due, the Interim Servicer 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 Interim Servicer on the date such late payment is
made and shall cover the period commencing with the day following such second
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. The payment by the Interim
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Interim Servicer.
Section 3.02 Statements to Purchaser. Not later than the
Remittance Date, the Interim Servicer shall furnish to the Purchaser a Monthly
Remittance Advice, with a trial balance report attached thereto, in the form of
Exhibit 1 annexed hereto in hard copy and electronic medium mutually acceptable
to the parties as to the preceding remittance and the period ending on the
preceding Determination Date.
In addition, not more than 60 days after the end of each
calendar year, the Interim Servicer shall furnish to each Person who was a
Purchaser at any time during such calendar year an annual statement in
accordance with the requirements of applicable federal income tax law as to the
aggregate of remittances for the applicable portion of such year.
Such obligation of the Interim Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Interim Servicer pursuant to any requirements of the
Internal Revenue Code as from time to time are in force.
The Interim Servicer shall prepare and file any and all tax
returns, information statements or other filings required to be delivered to any
governmental taxing authority or to the Purchaser pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Interim Servicer shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as the Purchaser may reasonably request from time to
time.
Section 3.03 Principal and Interest Advances by Interim
Servicer. The Interim Servicer shall have no obligation to advance any amounts
constituting delinquent principal and interest payments.
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Interim
Servicer shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the person
to whom the Mortgaged Property has been or is about to be sold whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains liable on the Mortgage and the Mortgage Note. When the Mortgaged
Property has been conveyed by the Mortgagor, the Interim Servicer shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Interim Servicer shall not exercise such
rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related PMI Policy or
LPMI Policy, if any.
If the Interim Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Interim Servicer shall
enter into (i) an assumption and modification agreement with the person to whom
such property has been conveyed, pursuant to which such person becomes liable
under the Mortgage Note and the original Mortgagor remains liable thereon or
(ii) in the event the Interim Servicer is unable under applicable law to require
that the original Mortgagor remain liable under the Mortgage Note and the
Interim Servicer has the prior consent of the primary mortgage guaranty insurer,
a substitution of liability agreement with the purchaser of the Mortgaged
Property pursuant to which the original Mortgagor is released from liability and
the purchaser of the Mortgaged Property is substituted as Mortgagor and becomes
liable under the Mortgage Note. If an assumption fee is collected by the Interim
Servicer for entering into an assumption agreement, a portion of such fee, up to
an amount equal to one-half of one percent (0.5%) of the outstanding principal
balance of the related Mortgage Loan, will be retained by the Interim Servicer
as additional servicing compensation, and any portion thereof in excess of
one-half of one percent (0.5%) shall be deposited in the Custodial Account for
the benefit of the Purchaser. In connection with any such assumption, neither
the Mortgage Interest Rate borne by the related Mortgage Note, the term of the
Mortgage Loan nor the outstanding principal amount of the Mortgage Loan shall be
changed.
To the extent that any Mortgage Loan is assumable, the Interim
Servicer shall inquire diligently into the creditworthiness of the proposed
transferee, and shall use the underwriting criteria for approving the credit of
the proposed transferee which are used by Xxxxxx Xxx with respect to
underwriting mortgage loans of the same type as the Mortgage Loans. If the
credit of the proposed transferee does not meet such underwriting criteria, the
Interim Servicer diligently shall, to the extent permitted by the Mortgage or
the Mortgage Note and by applicable law, accelerate the maturity of the Mortgage
Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files. Upon the payment in full of any Mortgage Loan, or the receipt by the
Interim Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Interim Servicer shall notify the
Purchaser in the Monthly Remittance Advice as provided in Section 3.02, and may
request the release of any Mortgage Loan Documents from the Purchaser in
accordance with this Section 4.02 hereof.
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If the Interim Servicer satisfies or releases a Mortgage
without first having obtained payment in full of the indebtedness secured by the
Mortgage or should the Interim Servicer otherwise prejudice any rights the
Purchaser may have under the mortgage instruments, upon written demand of the
Purchaser, the Interim Servicer shall repurchase the related Mortgage Loan at
the Repurchase Price by deposit thereof in the Custodial Account within 2
Business Days of receipt of such demand by the Purchaser. The Interim Servicer
shall maintain the Fidelity Bond and Errors and Omissions Insurance Policy as
provided for in Section 2.13 insuring the Interim Servicer against any loss it
may sustain with respect to any Mortgage Loan not satisfied in accordance with
the procedures set forth herein.
Section 4.03 Servicing Compensation. As consideration for
servicing the Mortgage Loans during the period from the related Closing Date up
to but not including the related Transfer Date, the Interim Servicer shall
retain a Servicing Fee with respect to each Mortgage Loan in the amount of $7.00
per month, which amount shall be prorated for any portion of a month during
which the Mortgage Loan is serviced by the Interim Servicer pursuant to this
Agreement. 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 interest from Condemnation Proceeds or
Liquidation Proceeds, to the extent permitted by Section 2.02), of such Monthly
Payment collected by the Interim Servicer, or as otherwise provided under
Section 2.03.
Additional servicing compensation in the form of assumption
fees, to the extent provided in Section 4.01, shall be retained by the Interim
Servicer to the extent not required to be deposited in the Custodial Account.
The Interim Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 4.04 Annual Statement as to Compliance. The Interim
Servicer shall deliver to the Purchaser, on or before March 31 each year
beginning March 31, 2002, and on the related Transfer Date an Officer's
Certificate, stating that (i) a review of the activities of the Interim Servicer
during the preceding calendar year and of performance under this Agreement has
been made under such officer's supervision, and (ii) the Interim Servicer has
complied fully with the provisions of Article II and Article IV, and (iii) to
the best of such officer's knowledge, based on such review, the Interim Servicer
has fulfilled all its obligations under this Agreement throughout such year, or,
if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and the action being taken by the Interim Servicer to cure such default.
Section 4.05 Annual Independent Public Accountants' Servicing
Report. On or before March 31st of each year beginning March 31, 2002, the
Interim Servicer, at its expense, shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to each Purchaser to the effect that such
firm has examined certain documents and records relating to the servicing of the
Mortgage Loans and this Agreement and that such firm is of the opinion that the
provisions of Article II and Article III have been complied with, and that, on
the basis of such examination conducted substantially in compliance with the
Single Audit 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.
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Section 4.06 Right to Examine Interim Servicer Records. The
Purchaser shall have the right to examine and audit any and all of the books,
records, or other information of the Interim Servicer, whether held by the
Interim Servicer or by another on its behalf, with respect to or concerning this
Agreement or the Mortgage Loans, during business hours or at such other times as
may be reasonable under applicable circumstances, upon reasonable advance
notice.
ARTICLE V
INTERIM SERVICER TO COOPERATE
Section 5.01 Provision of Information. During the term of this
Agreement, the Interim Servicer shall furnish to the Purchaser such periodic,
special, or other reports or information, whether or not provided for herein, as
shall be necessary, reasonable, or appropriate with respect to the Purchaser or
the purposes of this Agreement. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser may give.
The Interim Servicer 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 5.02 Financial Statements; Servicing Facilities. In
connection with marketing the Mortgage Loans, the Purchaser may make available
to a prospective Purchaser a Consolidated Statement of Operations of the Interim
Servicer for the most recently completed three fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Interim Servicer also shall make available any comparable
interim statements to the extent any such statements have been prepared by or on
behalf of the Interim Servicer (and are available upon request to members or
stockholders of the Interim Servicer or to the public at large). If it has not
already done so, the Interim Servicer shall furnish promptly to the Purchaser
copies of the statement specified above.
The Interim Servicer shall make available to the Purchaser or
any prospective Purchaser a knowledgeable financial or accounting officer for
the purpose of answering questions respecting recent developments affecting the
Interim Servicer or the financial statements of the Interim Servicer, and to
permit any prospective Purchaser to inspect the Interim Servicer's servicing
facilities for the purpose of satisfying such prospective Purchaser that the
Interim Servicer have the ability to service the Mortgage Loans as provided in
this Agreement.
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ARTICLE VI
TERMINATION
Section 6.01 Damages. The Purchaser shall have the right at
any time to seek and recover from the Interim Servicer any damages or losses
suffered by it as a result of any failure by the Interim Servicer to observe or
perform any duties, obligations, covenants or agreements herein contained.
Section 6.02 Termination Upon Transfer of Servicing.
(a) Termination Procedures. . This Agreement shall terminate
with respect to the Mortgage Loans or portion thereof transferred on the related
Transfer Date as set forth in the related Purchase Price and Terms Letter.
The Purchaser may elect to terminate this Agreement and
transfer the servicing from the Interim Servicer prior to the related Transfer
Date with respect to all or any portion of the Mortgage Loans by providing
written notice to the Interim Servicer at least 10 Business Days prior to the
date on which it intends to transfer the servicing of its intent to transfer the
servicing from the Interim Servicer. On or before the date specified by the
Purchaser in accordance with this paragraph (a) for the transfer of servicing
from the Interim Servicer, the Interim Servicer 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
Mortgage Loan Documents 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 Interim
Servicer's sole expense. The Interim Servicer shall cooperate with the Purchaser
and such successor in effecting the termination of the Interim Servicer's
responsibilities and rights hereunder.
On the related Transfer Date, the Interim Servicer shall
comply with all of the provisions of Section 5 of the Purchase Agreement to
effect a complete transfer of the Servicing Rights. On the related Transfer Date
for each Mortgage Loan, this Agreement, except for Articles VI, VIII, IX and X
which shall survive the related Transfer Date, shall terminate.
(b) Mortgage Loans in Foreclosure. The servicing with respect
to Mortgage Loans in foreclosure on or before the related Transfer Date shall
not be transferred from the Interim Servicer to the Purchaser or the successor
servicer, as the case may be, and such Mortgage Loans shall continue to be
serviced by the Interim Servicer pursuant to the terms of this Agreement.
However, if the Purchaser so elects, the Purchaser may waive the provisions of
this paragraph (b) and accept transfer of servicing of such Mortgage Loans and
all amounts received by the Interim Servicer thereunder.
(c) Servicing Advances. Notwithstanding the fact that the
related Transfer Date has occurred, the Interim Servicer shall not be reimbursed
for any Servicing Advances with respect to any Mortgage Loan until the Interim
Servicer or the successor servicer receives a Monthly Payment or Liquidation
Proceeds with respect to such Mortgage Loan. At such time, the Interim Servicer
shall be entitled to be reimbursed for all unreimbursed Servicing Advances with
respect to such Mortgage Loan on a first priority basis (but subject to any
successor servicer's rights to reimbursement with respect to Servicing Advances)
from the Monthly Payment or Liquidation Proceeds received with respect to such
Mortgage Loan. This Section 6.03(c) shall survive the related Transfer Date.
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(d) Additional Termination Provisions. Notwithstanding and in
addition to the foregoing, in the event that (i) a Mortgage Loan becomes
delinquent for a period of 120 days or more (a "Delinquent Mortgage Loan") or
(ii) a Mortgage Loan becomes an REO Property, the Purchaser may at its election
terminate this Agreement with respect to such Delinquent Mortgage Loan or REO
Property, upon 15 days' written notice to the Interim Servicer.
Section 6.03 Pass Through Transfer.
(a) The Purchaser may convey the Mortgage Loans to one or more
securitized trust structures ("Pass-Through Transfers"). In each case
temporarily retaining the Interim Servicer as the servicer thereof. The date on
which any Mortgage Loans are included in a Pass-Through Transfer shall be a
Reconstitution Date. On any Reconstitution Date, the Mortgage Loans transferred
shall cease to be covered by the Interim Servicing Agreement.
(b) The Interim Servicer shall cooperate with the Purchaser in
connection with any Pass-Through Transfer contemplated by the Purchaser pursuant
to this Section 28. In that connection, the Interim Servicer shall (a) execute
any agreements related to any Pass-Through Transfers ("Reconstitution
Agreements") within a reasonable period of time after receipt of any
Reconstitution Agreement which time shall be sufficient for the Interim Servicer
and Interim Servicer's counsel to review such Reconstitution Agreement, but such
time shall not exceed ten (10) Business Days after such receipt, and (b) provide
to the trustee or a third party purchaser, as the case may be, subject to any
Reconstitution Agreement and/or the Purchaser: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Interim Servicer, whether through letters of its auditors (the reasonable
out-of-pocket cost of which will be borne by the Purchaser) and counsel or
otherwise, as the Purchaser shall reasonably request; (ii) to bring each of the
Mortgage Loan representations and warranties set forth in the Agreement current
as of the date the Mortgage Loans are being transferred pursuant to a
Pass-Through Transfer, provided that, such Mortgage Loan representations and
warranties shall be revised, to the extent allowed or required by the rating
agencies and the certificate insurer and acceptable to the Purchaser, to reflect
the actual pool of Mortgage Loans being securitized; notwithstanding the
foregoing, Interim Servicer shall, at the time of reconstitution, be entitled to
state certain exceptions to the Mortgage Loan representations and warranties
necessary to make same true and correct as of the time of the Pass-Through
Transfer and (iii) such additional representations, warranties, covenants,
opinions of counsel, letters from auditors, and certificates of public officials
or officers of the Interim Servicer as are reasonably believed necessary by the
trustee, such third party purchaser, any master servicer, any rating agency or
the Purchaser, as the case may be, in connection with such transactions;
provided, however, that these items shall not be more onerous than such similar
items set forth herein.
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(c) In the event the Purchaser has elected to have the Interim
Servicer hold record title to the Mortgages, prior to a Reconstitution Date the
Interim Servicer or its designee shall prepare an assignment of mortgage in
blank from the Interim Servicer, acceptable to the trustee or such third party,
as the case may be, for each Mortgage Loan that is part of a Pass-Through
Transfer and shall pay all preparation and recording costs associated therewith.
The Interim Servicer shall execute each assignment of mortgage, track such
assignments of mortgage to ensure they have been recorded and deliver them as
required by the trustee or such third party, as the case may be, upon the
Interim Servicer's receipt thereof, provided, that the Interim Servicer need not
record an assignment of mortgage if, at the sole option of the Purchaser, the
Interim Servicer delivers an opinion of counsel in the applicable jurisdiction
that it is not necessary to record the assignment of mortgage to protect the
Purchaser's interest. Additionally, the Interim Servicer shall prepare and
execute, at the direction of the Purchaser, any Mortgage Note endorsements in
connection with any and all Reconstitution Agreements.
(d) The Reconstitution Agreement will require the Interim
Servicer to advance principal and interest payments on each Mortgage Loan at the
Mortgage Loan Interest Rate less the Reconstituted Servicing Fee (defined below)
on the remittance date of the Reconstitution Agreement. The Reconstitution
Agreement will also require in connection with any prepayments, in addition to
any prepayment penalties received by the Interim Servicer on the prepaid
Mortgage Loan, the Interim Servicer shall contribute from its own funds to the
extent that such contributions do not exceed the Reconstituted Servicing Fee,
payable to the Interim Servicer for such prior month, any shortfall in the
interest component thereof, such that one month's interest shall be deposited in
the Custodial Account, (as defined in the Interim Servicing Agreement), prior to
the remittance date of the Reconstitution Agreement. The Interim Servicer's
obligation to remit payments of principal and interest shall continue through
the liquidation of the Mortgaged Property on the related Mortgage Loan, or until
such time that the Interim Servicer deems that any future advances of principal
and interest would be otherwise non-recoverable. The Reconstituted Servicing Fee
shall be .25% per annum times the outstanding principal balance of the Mortgage
Loans included in the respective Pass-Through Transfer.
(e) The Interim Servicer shall do all things necessary and
required by a servicer who services Mortgage Loans under a Pass-Through Transfer
which is a REMIC (defined as a "real estate mortgage conduit" within the meaning
Section 860D of the Internal Revenue Code of 1986, as it may be amended from
time to time).
(f) All Mortgage Loans not sold or transferred pursuant to a
Pass-Through Transfer and any Mortgage Loans repurchased by the Purchaser, shall
be subject to the Interim Servicing Agreement and shall continue to be serviced
in accordance with the terms of the Interim Servicing Agreement and with respect
thereto the Interim Servicing Agreement shall remain in full force and effect.
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ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the
Transfer Date. Prior to the related Transfer Date, the contents of each
Servicing File are and shall be held in trust by the Interim Servicer for the
benefit of the Purchaser as the owner thereof. The Interim Servicer shall
maintain in the Servicing File a copy of the contents of each Mortgage File and
the originals of the documents in each Mortgage File not delivered to the
Purchaser. The possession of the Servicing File by the Interim Servicer is at
the will of the Purchaser for the sole purpose of servicing the related Mortgage
Loan, pursuant to this Agreement, and such retention and possession by the
Interim Servicer is in its capacity as Servicer only and at the election of the
Purchaser. The Interim Servicer shall release its custody of the contents of any
Servicing File only in accordance with written instructions from the Purchaser,
unless such release is required as incidental to the Interim Servicer's
servicing of the Mortgage Loans pursuant to this Agreement, or is in connection
with a repurchase of any Mortgage Loan pursuant to the terms of the Purchase
Agreement.
The Interim Servicer 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 Interim Servicer shall maintain in its possession,
available for inspection by the Purchaser or its designee, and shall deliver to
the Purchaser or its designee upon demand, evidence of compliance with all
federal, state and local laws, rules and regulations, and requirements of Xxxxxx
Mae 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 and periodic inspection reports as required by Section
2.14.
The Interim Servicer shall keep at its servicing office books
and records in which, subject to such reasonable regulations as it may
prescribe, the Interim Servicer shall note transfers of Mortgage Loans. No
transfer of a Mortgage Loan may be made unless such transfer is in compliance
with the terms hereof. For the purposes of this Agreement, the Interim Servicer
shall be under no obligation to deal with any person with respect to this
Agreement or the Mortgage Loans unless the books and records show such person as
the owner of the Mortgage Loan. The Purchaser may, subject to the terms of this
Agreement, sell or transfer one or more of the Mortgage Loans. The Purchaser
also shall advise the Interim Servicer of the transfer. Upon receipt of notice
of the transfer, the Interim Servicer 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.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Interim Servicer agrees to
indemnify the Purchaser and hold it harmless against any and all claims, losses,
damages, penalties, fines, and forfeitures, including, but not limited to
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 Interim Servicer to (a) perform its duties and service the
Mortgage Loans in strict compliance with the terms of this Agreement and/or (b)
comply with applicable law. The Interim Servicer immediately shall notify the
Purchaser if a claim is made by a third party with respect to this Agreement,
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 Interim Servicer shall
follow any written instructions received from the Purchaser in connection with
such claim. The Purchaser promptly shall reimburse the Interim Servicer for all
amounts advanced by it pursuant to the preceding sentence except when the claim
is in any way related to the Interim Servicer's indemnification pursuant to
Section 8 of the Purchase Agreement, or the failure of the Interim Servicer to
(a) service and administer the Mortgage Loans in strict compliance with the
terms of this Agreement and/or (b) comply with applicable law.
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Section 8.02 Limitation on Liability of Interim Servicer and
Others. Neither the Interim Servicer nor any of the directors, officers,
employees or agents of the Interim Servicer 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 Interim Servicer or any such
person against any breach of warranties or representations made herein, or
failure to perform its obligations in strict compliance with any standard of
care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Interim Servicer and any director, officer, employee or agent of the Interim
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Interim Servicer shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties to service the
Mortgage loans in accordance with this Agreement and which in its opinion may
involve it in any expense or liability, provided, however, that the Interim
Servicer 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 Interim Servicer shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by
Interim Servicer. The Purchaser has entered into this Agreement with the Interim
Servicer and subsequent Purchasers will purchase the Mortgage Loans in reliance
upon the independent status of the Interim Servicer, and the representations as
to the adequacy of its servicing facilities, plant, personnel, records and
procedures, its integrity, reputation and financial standing, and the
continuance thereof. Therefore, the Interim Servicer shall neither assign this
Agreement or the servicing hereunder or delegate its rights or duties hereunder
or any portion hereof or sell or otherwise dispose of all or substantially all
of its property or assets without the prior written consent of the Purchaser,
which consent shall be granted or withheld in the sole discretion of the
Purchaser.
The Interim Servicer shall not resign from the obligations and
duties hereby imposed on it except by mutual consent of the Interim Servicer 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
Interim Servicer. Any such determination permitting the resignation of the
Interim Servicer 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 Interim Servicer's
responsibilities and obligations hereunder in the manner provided in Section
6.02.
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Without in any way limiting the generality of this Section
8.03, in the event that the Interim Servicer either shall assign this Agreement
or the servicing responsibilities hereunder or delegate its duties hereunder or
any portion thereof or sell or otherwise dispose of all or substantially all of
its property or assets, without the prior written consent of the Purchaser, then
the Purchaser shall have the right to terminate this Agreement upon notice given
as set forth in Section 6.03, without any payment of any penalty or damages and
without any liability whatsoever to the Interim Servicer or any third party.
Section 8.04 Assignment by Purchaser. The Purchaser shall have
the right, without the consent of the Interim Servicer but subject to the limit
set forth in Section 2.01 hereof, 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 and Assumption Agreement substantially in the form of
Exhibit H to the Purchase Agreement. Upon such assignment of rights and
assumption of obligations, the assignee or designee shall accede to the rights
and obligations hereunder of the Purchaser with respect to such Mortgage Loans
and the Purchaser as assignor shall be released from all obligations hereunder
with respect to such Mortgage Loans from and after the date of such assignment
and assumption. All references to the Purchaser in this Agreement shall be
deemed to include its assignee or designee.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
The Purchaser warrants and represents to, and covenants and
agrees with, the Interim Servicer as follows:
Section 9.01 Authority and Capacity. The execution, delivery
and performance by the Purchaser of this Agreement has been and will remain duly
and validly authorized by all necessary corporate action. This Agreement
constitutes and will continue to constitute a legal, valid and enforceable
obligation of the Purchaser.
Section 9.02 Assistance. To the extent possible, the Purchaser
shall cooperate with and assist the Interim Servicer as requested by the Interim
Servicer, in carrying out Interim Servicer's covenants, agreements duties and
responsibilities under the Purchase Agreement and in connection therewith shall
execute and deliver all such papers, documents and instruments as may be
necessary and appropriate in furtherance thereof.
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ARTICLE X
REPRESENTATIONS AND WARRANTIES OF INTERIM SERVICER
The Interim Servicer warrants and represents to, and covenants
and agrees with, the Purchaser as follows:
Section 10.01 Due Organization and Authority. The Interim
Servicer is a corporation duly organized, validly existing and in good standing
under the laws of the state of California 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 Interim Servicer, and in any event the Interim
Servicer is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; the Interim Servicer has the full
corporate 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 or transfer to be delivered pursuant to
this Agreement) by the Interim Servicer and the consummation of the transactions
contemplated hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the Interim Servicer;
and all requisite corporate action has been taken by the Interim Servicer to
make this Agreement valid and binding upon the Interim Servicer in accordance
with its terms;
Section 10.02 Ordinary Course of Business. The consummation of
the transactions contemplated by this Agreement are in the ordinary course of
business of the Interim Servicer;
Section 10.03 No Conflicts. Neither the execution and delivery
of this Agreement, 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, conditions or provisions of the Interim Servicer's charter or by-laws
or any legal restriction or any agreement or instrument to which the Interim
Servicer is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the Interim
Servicer 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;
Section 10.04 Ability to Service. The Interim Servicer is an
approved Interim Servicer/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 Interim Servicer 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 Interim Servicer unable to comply with Xxxxxx Mae or Xxxxxxx Mac
eligibility requirements or which would require notification to either Xxxxxx
Mae or Xxxxxxx Mac;
Section 10.05 Ability to Perform. The Interim Servicer does
not believe, nor does it have any reason or cause to believe, that it cannot
perform each and every covenant contained in this Agreement;
Section 10.06 No Litigation Pending. There is no action, suit,
proceeding or investigation pending or threatened against the Interim Servicer
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 Interim Servicer, or in any material impairment of
the right or ability of the Interim Servicer to carry on its business
substantially as now conducted, or in any material liability on the part of the
Interim Servicer, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Interim Servicer contemplated herein, or
which would be likely to impair materially the ability of the Interim Servicer
to perform under the terms of this Agreement;
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Section 10.07 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 Interim Servicer of or
compliance by the Interim Servicer with this Agreement or the Servicing 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
related Closing Date;
Section 10.08 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.
ARTICLE XI
DEFAULT
Section 11.01 Events of Default. The following shall
constitute an Event of Default under this Agreement on the part of the Interim
Servicer:
(a) any failure by the Interim Servicer 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 days after the date upon which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Interim Servicer by the Purchaser; or
(b) the failure by the Interim Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Interim Servicer set forth in this Agreement which continues
unremedied for a period of 30 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Interim Servicer by the Purchaser; or
(c) 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, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Interim Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period of 60
days; or
(d) the Interim Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Interim Servicer or of or relating to all or substantially all of its
property; or
(e) the Interim Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its obligations;
or
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(f) the Interim Servicer ceases to meet the qualifications of
a Xxxxxx Mae servicer; or
(g) the Interim Servicer fails to maintain a minimum net worth
of $25,000,000; or
(h) the Interim Servicer attempts to assign its right to
servicing compensation hereunder or the Interim Servicer attempts, without the
consent of the Purchaser, to sell or otherwise dispose of all or substantially
all of its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof.
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 Interim Servicer, may
terminate all the rights and obligations of the Interim Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof.
Upon receipt by the Interim Servicer of such written notice,
all authority and power of the Interim Servicer under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the successor appointed pursuant to Section 6.03.
Section 11.02 Waiver of Defaults. By a written notice, the
Purchaser may waive any default by the Interim Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Notices. All notices, requests, demands and
other communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given upon
the delivery or mailing thereof, as the case may be, sent by registered or
certified mail, return receipt requested:
(a) If to Purchaser to:
Xxxxxx Brothers Bank, FSB
3 World Financial Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Contract Finance
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With copies to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
And electronically, to xxxxxxx@xxxxxx.xxx
(b) If to Interim Servicer to:
Greenpoint Mortgage Funding Inc.
000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Section 12.02 Waivers. Either the Interim Servicer or
Purchaser may upon consent of all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or
covenants required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of
the others hereunder.
The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 12.03 Entire Agreement; Amendment. This Agreement and
the Purchase Agreement constitute the entire agreement between the parties with
respect to servicing of the Mortgages during the Interim Period. This Agreement
may be amended and any provision hereof waived, but, only in writing signed by
the party against whom such enforcement is sought.
Section 12.04 Execution; Binding Effect. 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 8.03, this Agreement shall inure to the benefit of
and be binding upon the Interim Servicer and the Purchaser and their respective
successors and assigns.
Section 12.05 Headings. Headings of the Articles and Sections
in this Agreement are for reference purposes only and shall not be deemed to
have any substantive effect.
Section 12.06 Applicable Law. This Agreement shall be
construed in accordance with the laws of the State of New York.
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Section 12.07 Relationship of Parties. Nothing herein
contained shall be deemed or construed to create a partnership or joint venture
between the parties. The duties and responsibilities of the Interim Servicer
shall be rendered by them as independent contractors and not as an agent of
Purchaser. The Interim Servicer shall have full control of all of its acts,
doings, proceedings, relating to or requisite in connection with the discharge
of its duties and responsibilities under this Agreement.
Section 12.08 Severability of Provisions. If any one or more
of the covenants, agreements, provisions or terms of this Agreement shall be
held invalid for any reason whatsoever, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect the
validity or enforceability of the other provisions of this Agreement.
Section 12.09 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
Interim Servicer's expense in the event recordation is either necessary under
applicable law or requested by the Purchaser at its sole option.
Section 12.10 Appointment and Designation of Master Servicer.
The Purchaser hereby appoints and designates Aurora Loan Services, Inc. as its
master servicer (the "Master Servicer") for the Mortgage Loans subject to this
Agreement. The Interim Servicer is hereby authorized and instructed to take any
and all instructions with respect to servicing the Mortgage Loans hereunder as
if the Master Servicer were the Purchaser hereunder. The authorization and
instruction set forth herein shall remain in effect until such time as the
Interim Servicer shall receive written instruction from the Purchaser that such
authorization and instruction is terminated.
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IN WITNESS WHEREOF, the parties have executed this Agreement
under seal as of the date and year first above written.
XXXXXX BROTHERS BANK, FSB
(the Purchaser)
By:
---------------------------------
Name:
Title:
GREENPOINT MORTGAGE FUNDING INC.
(the Interim Servicer)
By:
---------------------------------
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
1-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 2001
_____________________________________________ hereby certifies
that it has established the account described below as a Custodial Account
pursuant to Section 2.04 of the Flow Interim Servicing Agreement, dated as of
December 12, 2001, Fixed and Adjustable Rate Mortgage Loans, Group 2001-_____.
Title of Account: "Greenpoint Mortgage Funding Inc. in
trust for the registered Purchaser, Group 2001-____."
Account Number:______________________________________
Address of office or branch
of the Interim Servicer at
which Account is maintained:_________________________
GREENPOINT MORTGAGE FUNDING INC.
Interim Servicer
By:
-------------------------------
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 2001
To: _____________________________
_____________________________
_____________________________
(the "Depository")
As Interim Servicer under the Flow Interim Servicing
Agreement, dated as of December 12, 2001, Fixed and Adjustable Rate Mortgage
Loans, Group 2001-1 (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 2.04 of the
Agreement, to be designated as "Greenpoint Mortgage Funding Inc. in trust for
the Fixed and Adjustable Rate Mortgage Loans - Group 2001-____." All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Interim Servicer. You may refuse any deposit which would result in violation of
the requirement that the account be fully insured as described below. This
letter is submitted to you in duplicate. Please execute and return one original
to us.
GREENPOINT MORTGAGE FUNDING INC.
--------------------------------
Interim Servicer
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. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
3-1
------------------------------------
Depository
By:
--------------------------------
Name:
Title:
Date:
3-2
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICTION
_________ ___, 200_
Greenpoint Mortgage Funding Inc. hereby certifies that it has
established the account described below as an Escrow Account pursuant to Section
2.06 of the Flow Interim Servicing Agreement, dated as of December 12, 2001,
Fixed and Adjustable Rate Mortgage Loans, Group 2001-____.
Title of Account: "Greenpoint Mortgage Funding Inc. in
trust for the Purchaser of the Fixed and Adjustable Rate Mortgage Loans,
Group ___, and various Mortgagors."
Account Number:______________________________________
Address of office or branch
of the Interim Servicer at
which Account is maintained:_________________________
GREENPOINT MORTGAGE FUNDING INC.
Interim Servicer
By:
-----------------------------
Name:
Title:
Date:
4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 200_
To: ______________________________
______________________________
______________________________
(the "Depository")
As Interim Servicer under the Flow Interim Servicing
Agreement, dated as of December 12, 2001, Fixed and Adjustable Rate Mortgage
Loans, Group 2001-____ (the "Agreement"), we hereby authorize and request you to
establish an account, as an Escrow Account pursuant to Section 2.06 of the
Agreement, to be designated as "Greenpoint Mortgage Funding Inc., in trust for
the Purchasers of Fixed and Adjustable Rate Mortgage Loans - Group 2001-____."
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Interim Servicer. You may refuse any deposit which would result in
violation of the requirement that the account be fully insured as described
below. This letter is submitted to you in duplicate. Please execute and return
one original to us.
GREENPOINT MORTGAGE FUNDING INC.
Interim Servicer
By:
-------------------------------
Name:
Title:
Date:
5-1
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. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through the
Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF").
-------------------------------
Depository
By:
-------------------------------
Name:
Title:
Date:
5-2
EXHIBIT 6
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Xxxxxx Brothers Bank,
FSB, (the "Purchaser") as the Purchaser under that certain Flow Interim
Servicing Agreement dated as of December 12, 2001, (the "Agreement"), does
hereby contract with Greenpoint Mortgage Funding Inc. (the "Seller") as Seller
under the Agreement, for the servicing responsibilities related to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto. The Seller hereby
accepts the servicing responsibilities transferred hereby and on the date hereof
assumes all servicing responsibilities related to the Mortgage Loans identified
on the attached Mortgage Loan Schedule all in accordance with the Agreement. The
contents of each Servicing File required to be delivered to service the Mortgage
Loans pursuant to the Agreement have been or shall be delivered to the Seller by
the Purchaser in accordance with the terms of the Agreement.
With respect to the Mortgage Loans made subject to the
Agreement hereby, the Closing Date shall be ___________________ and the Transfer
Date shall be _______________.
All other terms and conditions of this transaction shall be
governed by the Agreement.
Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement.
6-1
This Acknowledgment 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.
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
PURCHASER:
XXXXXX BROTHERS BANK, FSB
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SELLER:
GREENPOINT MORTGAGE FUNDING INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
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