EXECUTION
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AURORA LOAN SERVICES INC.,
as Servicer
and
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
-----------------------------
Structured Asset Securities Corporation
Amortizing Residential Collateral Trust
Mortgage Pass-Through Certificates, Series 2000-BC3
SERVICING AGREEMENT
Dated as of August 1, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I.
DEFINITIONS
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files..........................................12
Section 2.02 Books and Records..............................................................................12
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service............................................................................13
Section 3.02 Collection of Mortgage Loan Payments...........................................................14
Section 3.03 Establishment of and Deposits to Custodial Account.............................................15
Section 3.04 Permitted Withdrawals From Custodial Account...................................................16
Section 3.05 Establishment of and Deposits to Escrow Account................................................17
Section 3.06 Permitted Withdrawals From Escrow Account......................................................18
Section 3.07 [Reserved].....................................................................................18
Section 3.08 Fidelity Bond and Errors and Omissions Insurance...............................................18
Section 3.09 Notification of Adjustments....................................................................18
Section 3.10 [Reserved].....................................................................................19
Section 3.11 Protection of Accounts.........................................................................19
Section 3.12 Title, Management and Disposition of REO Property..............................................19
Section 3.13 Real Estate Owned Reports......................................................................22
Section 3.14 MERS...........................................................................................22
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances....................................................................................22
Section 4.02 Statements to Master Servicer..................................................................23
Section 4.03 Monthly Advances by Servicer...................................................................24
Section 4.04 Compensating Interest..........................................................................25
Section 4.05 Credit Reporting...............................................................................25
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.........................................................................25
Section 5.02 Annual Audit Report............................................................................25
Section 5.03 Annual Officer's Certificate...................................................................26
ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.....................................26
Section 6.02 Remedies for Breach of Representations and Warranties of the Servicer..........................27
Section 6.03 Additional Indemnification by the Servicer; Third Party Claims.................................28
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer........................................................29
Section 7.02 Limitation on Liability of the Servicer and Others.............................................29
Section 7.03 Limitation on Resignation and Assignment by the Servicer.......................................30
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause..........................................................................31
Section 8.02 Termination Without Cause......................................................................32
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer......................................................................33
Section 9.02 Costs..........................................................................................35
Section 9.03 Notices........................................................................................35
Section 9.04 Severability Clause............................................................................36
Section 9.05 No Personal Solicitation.......................................................................37
Section 9.06 Counterparts...................................................................................37
Section 9.07 Place of Delivery and Governing Law............................................................37
Section 9.08 Further Agreements.............................................................................37
Section 9.09 Intention of the Parties.......................................................................37
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement......................................38
Section 9.11 Assignment by Xxxxxx Capital...................................................................38
Section 9.12 [[Reserved.]]..................................................................................38
Section 9.13 Waivers........................................................................................38
Section 9.14 Exhibits.......................................................................................38
Section 9.15 Intended Third Party Beneficiaries.............................................................38
Section 9.16 Guarantor Audit and Inspection Rights: Access to Financial Statements..........................39
Section 9.17 Guarantor Right of Termination or Declaration of Event of Default..............................39
Section 9.18 Fees for Failure to Provide Timely Reports.....................................................39
Section 9.19 Confidentiality................................................................................40
Section 9.20 Deficiency Judgments...........................................................................40
Section 9.21 General Interpretive Principles................................................................40
Section 9.22 Reproduction of Documents......................................................................41
EXHIBITS & SCHEDULES
EXHIBIT A-1 Mortgage Loan Schedule
EXHIBIT A-2 Monthly Reporting Format to Master Servicer
EXHIBIT B Custodial Account Letter Agreement
EXHIBIT C Escrow Account Letter Agreement
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of August, 2000, by and between XXXXXX BROTHERS HOLDINGS INC., a Delaware
corporation (the "Seller") and AURORA LOAN SERVICES INC., a Delaware
corporation ("the Servicer") recites and provides as follows:
RECITAL
WHEREAS, the Servicer and Xxxxxx Brothers Bank, FSB (the "Bank") are
parties to a Flow Servicing Agreement, dated as of August 31, 1999 (the
"8/31/99 Flow Agreement"), pursuant to which the Servicer services certain
residential adjustable and fixed rate mortgage loans for the Bank;
WHEREAS, the Servicer and Xxxxxx Capital, a division of the Seller, are
parties to a Flow Servicing Agreement, dated as of February 15, 2000 as
amended (the "2/15/00 Flow Agreement") pursuant to which the Servicers
services certain residential adjustable and fixed rate mortgage loans for
Xxxxxx Capital;
WHEREAS, pursuant to an Assignment, Assumption and Recognition Agreement
dated as of September 8, 2000, the Bank has assigned all of its rights, title
and interest in the Serviced Mortgage Loans (as defined below) and the Flow
Servicing Agreement and delegated all of its obligations under such Agreement
to the Seller, and the Seller has accepted such assignment and delegation;
WHEREAS, the Seller has conveyed certain of the Mortgage Loans serviced
under the 2/15/00 Flow Agreement and 8/31/99 Flow Agreement (as identified on
Schedule I hereto) (hereafter, the "Serviced Mortgage Loans") on a
servicing-retained basis to Structured Asset Securities Corporation (the
"Depositor"), which in turn has conveyed the Serviced Mortgage Loans to First
Union National Bank, as trustee (the "Trustee") under a trust agreement dated
as of August 1, 2000 (the "Trust Agreement"), among the Trustee, Xxxxx Fargo
Bank Minnesota, National Association, as master servicer (together with any
successor Master Servicer appointed pursuant to the provisions of the Trust
Agreement, the "Master Servicer"), the Depositor, Xxxxxx Brothers Holdings
Inc., as seller, The Murrayhill Company, as loss mitigation advisor, and the
Federal Home Loan Mortgage Corporation, as guarantor (the "Guarantor");
WHEREAS, multiple classes of certificates (the "Certificates"), including
the Class X Certificate, will be issued on the Closing Date pursuant to the
Trust Agreement, and Xxxxxx Brothers Inc. or a nominee thereof (together with
any successor in interest thereto and any permitted assignee or transferee
thereof, the "Directing Holder") is expected to be the initial registered
holder of the Class X Certificates;
WHEREAS, the Seller desires that the Servicer service the Serviced
Mortgage Loans pursuant to this Agreement, and the Servicer has agreed to do
so, subject to the right of the Directing Holder, the Master Servicer and the
Guarantor to terminate the rights and obligations of the Servicer hereunder
subject to the other conditions set forth herein;
WHEREAS, the Seller and the Servicer desire (i) to consolidate the
servicing of the Serviced Mortgage Loans currently serviced under the 8/31/99
Flow Agreement and the 2/15/00 Flow Agreement under this Agreement and that
(ii) the provisions of this Agreement (and not the 8/31/99 Flow Agreement and
the 2/15/00 Flow Agreement) will govern the Serviced Mortgage Loans for so
long as the Serviced Mortgage Loans remain subject to the provisions of the
Trust Agreement;
WHEREAS, the Master Servicer and any successor Master Servicer shall be
obligated under the Trust Agreement, among other things, to supervise the
servicing of the Mortgage Loans on behalf of the Trustee, and shall have the
right, under certain circumstances, to terminate the rights and obligations of
the Servicer under this Servicing Agreement;
WHEREAS, the Seller and the Servicer intend that each of the Master
Servicer, the Trustee, the Directing Holder and the Guarantor be an intended
third party beneficiary of this Agreement;
WHEREAS, the Seller and the Servicer acknowledge and agree that Xxxxxx
Capital will assign all of its rights and delegate all of its obligations
hereunder (excluding Xxxxxx Capital's rights and obligations as owner of the
servicing rights relating to the Mortgage Loans) to the Trustee, and that each
reference herein to either Xxxxxx Capital or the Seller is intended, unless
otherwise specified, to mean the Seller or the Trustee, as assignee, whichever
is the owner of the Mortgage Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Servicer hereby agree as
follows:
ARTICLE I.
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed in
writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions that
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan serviced pursuant to this
Agreement under which the Mortgage Interest Rate is adjusted from time to time
in accordance with the terms and provisions of the Mortgage Note.
Adverse REMIC Event: As defined in Article X of the Trust Agreement.
Agreement: This Servicing Agreement and all amendments hereof and
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other than
Servicing Fees and Prepayment Penalty Amounts, including but not limited to
late charges, fees received with respect to checks or bank drafts returned by
the related bank for non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges.
Appraised Value: The value set forth in an appraisal made in connection
with the origination or the refinance of the related Mortgage Loan as the
value of the Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
Best Efforts: Efforts determined to be reasonably diligent by the Seller
or Servicer, as the case may be, in its sole discretion. Such efforts do not
require the Seller or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Seller or Servicer, as the case may be, to advance or expend fees
or sums of money in addition to those specifically set forth in this
Agreement.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the States of New York,
Florida and Minnesota are authorized or obligated by law or executive order to
be closed.
Certificates: Any or all of the Certificates issued pursuant to the Trust
Agreement.
Closing Date: September 8, 2000.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Condemnation Proceeds: All awards of 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.
Conventional Loan: A conventional residential first or second lien fixed
or adjustable rate Mortgage Loan that is neither FHA insured nor VA
guaranteed.
Costs: For any Person, any claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses of such Person.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 3.03.
Custodial Agreement: The custodial agreements relating to custody of
certain of the Mortgage Loans (as identified in such agreement), among the
Custodian, the Trustee, and the Depositor, dated as of August 1, 2000.
Custodian: Each of The Chase Manhattan Bank (successor by merger with
Chase Bank of Texas, National Association), LaSalle National Bank and U.S.
Bank Trust, National Association, as Custodian pursuant to the related
Custodial Agreement, and any successor thereto. Such Custodial Agreement will
identify by schedule the Serviced Mortgage Loans covered under such agreement.
Determination Date: The last day (or if such day is not a Business Day,
the Business Day immediately preceding such last day) of the Due Period
immediately preceding the related Remittance Date.
Depositor: Structured Asset Securities Corporation, or any successor in
interest.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the
first day of the month, such Mortgage Loans will be treated as if the Monthly
Payment is due on the first day of the immediately succeeding month.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month immediately preceding the month of the
Remittance Date and ending on the first day of the month of the Remittance
Date.
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 as to
timely payment of principal and interest 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, including Federal Housing Administration debentures, but excluding
any of such securities whose terms do not provide for a payment of a fixed
dollar amount upon maturity or call for redemption ("Direct Obligations") and
FHLMC senior debt obligations;
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories and the
Trustee or any agent of the Trustee, acting in its respective commercial
capacity) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the 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 or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA or FHLMC with any registered broker/dealer
subject to Securities Investors' Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency
in its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time
of investment or the contractual commitment providing for such investment, at
least equal to one of the two highest long-term credit rating categories of
each Rating Agency; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
investment therein will cause the then outstanding principal amount of
securities issued by such corporation and held as part of the Custodial
Account to exceed 20% of the aggregate principal amount of all Eligible
Investments in the Custodial Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 180 days after the date of issuance thereof)
rated by each Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC (as defined in the Trust Agreement);
(vii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States of
America) held by a custodian in safekeeping on behalf of the holders of such
receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment,
(A) rated in the highest rating category by each Rating Agency or (B) that
would not adversely affect the then current rating by either Rating Agency of
any of the Certificates. Such investments in this subsection (viii) may
include money market mutual funds or common trust funds, including any fund
for which the Trustee, the Master Servicer or an affiliate thereof serves as
an investment advisor, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (x) the Trustee, the Master
Servicer or an affiliate thereof charges and collects fees and expenses from
such funds for services rendered, (y) the Trustee, the Master Servicer or an
affiliate thereof charges and collects fees and expenses for services rendered
pursuant to this Agreement, and (z) services performed for such funds and
pursuant to this Agreement may converge at any time.
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.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with FHLMC Guide.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 3.05.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any event set forth in Section 8.01.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within HUD or any
successor thereto and including the Federal Housing Commissioner and the
Secretary of HUD where appropriate under the FHA Regulation.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
FHLMC Guide: The FHLMC Selling/Servicing Guide and all amendments or
additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer in
accordance with the FHLMC Guide.
Fixed Rate Mortgage Loan: Any individual Mortgage Loan serviced pursuant
to this Agreement as to which the Mortgage Interest Rate set forth in the
Mortgage Note is fixed for the term of such Mortgage Loan.
Fitch: Fitch, Inc., or any successor in interest.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
GNMA: The Government National Mortgage Association, or any successor
thereto.
Guarantor: FHLMC and its successors or assigns.
HOEPA: The Home Ownership and Equity Protection Act, as amended.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the
functions thereof with regard to FHA Mortgage Insurance. The term "HUD," for
purposes of this Agreement, is also deemed to include subdivisions thereof
such as the FHA and GNMA.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property including proceeds from the MGIC PMI Insurance Policy.
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 REO Property, if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Master Servicer: Xxxxx Fargo Bank Minnesota, National Association, or any
successor in interest, or if any successor master servicer shall be appointed
as provided in the Trust Agreement, then such successor master servicer.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Mortgage Loan that has been designated
by the Servicer as recordable in the name of MERS.
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage,
or an Assignment of Mortgage, has been or will be recorded in the name of
MERS, as agent for the holder from time to time of the related Mortgage Note.
MGIC: Mortgage Guaranty Insurance Corporation and its successors and
assigns.
MGIC PMI Insurance Policy: The primary mortgage insurance policy (No.
32-110-4-1013) acquired by the Seller for the Trust Fund from MGIC for those
Mortgage Loans included in the Trust Fund with loan-to-value ratios determined
as of the date of origination of greater than 60% (which policy provides
separate certificate numbers for each Mortgage Loan covered thereby) and which
Mortgage Loans shall be specifically identified to the Servicer in a separate
schedule to be provided to the Servicer by the Depositor.
Monthly Advance: With respect to each Remittance Date and each Mortgage
Loan, an amount equal to the Monthly Payment (with the interest portion of
such Monthly Payment adjusted to the Mortgage Loan Remittance Rate) that was
due on the Mortgage Loan, and that was delinquent at the close of business on
the first day of the month in which such Remittance Date occurs, but only to
the extent that such amount is expected, in the reasonable judgment of the
Servicer, to be recoverable from collections or other recoveries in respect of
such Mortgage Loan. To the extent that the Servicer determines that any such
amount is not recoverable from collections or other recoveries in respect of
such Mortgage Loan, such determination shall be evidenced by a certificate of
a Servicing Officer delivered to the Master Servicer setting forth such
determination and the procedures and considerations of the Servicer forming
the basis of such determination, which shall include a copy of any broker's
price opinion and any other information or reports obtained by the Servicer
which may support such determinations.
Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc. or any successor in interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in the FHLMC Guide.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note net of any Relief Act Reduction.
Mortgage Loan: An individual Mortgage Loan that is the subject of this
Agreement, each Mortgage Loan subject to this Agreement being identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation
the Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Master Servicer, which shall be equal
to the Mortgage Interest Rate minus the applicable Servicing Fee.
Mortgage Loan Schedule: A schedule of the Mortgage Loans setting forth
information with respect to such Mortgage Loans as agreed to by the Seller,
the Master Servicer and the Guarantor (including any MERS identification
number (if available) with respect to each MERS Mortgage Loan or MERS Eligible
Mortgage Loan), attached hereto as Exhibit A-2.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Sale Proceeds: The proceeds from the sale of REO Property, net of all
expenses incurred by the Servicer in connection with such sale, including,
without limitation, legal fees and expenses, referral fees, brokerage
commissions, conveyance taxes and any other related expense.
Non-MERS Eligible Mortgage Loan: Any Mortgage Loan other than a MERS
Eligible Mortgage Loan.
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage
Loan.
Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Servicer, reasonably acceptable to the Seller and the Guarantor,
provided that any Opinion of Counsel relating to (a) qualification of the
Mortgage Loans in a REMIC or (b) compliance with the REMIC Provisions, must be
an opinion of counsel acceptable to the Trustee, the Guarantor and Xxxxxx
Capital, who (i) is in fact independent of any Seller, the Servicer and any
Master Servicer of the Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the Servicer or any Master Servicer of the
Mortgage Loans or in an affiliate of any such entity and (iii) is not
connected with any Seller, the Servicer or any Master Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar
functions.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, including the MGIC PMI Insurance Policy, as required by
this Agreement and the Trust Agreement with respect to certain Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part during any Due
Period, which Principal Prepayment was applied to such Mortgage Loan prior to
such Mortgage Loan's Due Date in such Due Period, the amount of interest (net
of the related Servicing Fee for Principal Prepayments in full) that would
have accrued on the amount of such Principal Prepayment during the period
commencing on the date as of which such Principal Prepayment was applied to
such Mortgage Loan and ending on the day immediately preceding such Due Date,
inclusive.
Prepayment Penalty Amount: With respect to any Remittance Date, all
premiums or charges paid by the Mortgagors due to Principal Prepayments
collected by the Servicers during the immediately preceding Prepayment Period.
Prime Rate: The prime rate published from time to time, as published as
the average rate in The Wall Street Journal Northeast Edition.
Principal Prepayment: Any Mortgagor payment of principal (other than a
Balloon Payment) or other recovery of principal on a Mortgage Loan that is
recognized as having been received or recovered in advance of its scheduled
Due Date and applied to reduce the principal balance of the Mortgage Loan in
accordance with the terms of the Mortgage Note.
Qualified Depository: Any of (i) a depository the accounts of which are
insured by the FDIC and the debt obligations of which are rated AA (or its
equivalent) or better by each Rating Agency; (ii) the corporate trust
department of any bank the debt obligations of which are rated at least A-1 or
its equivalent by each Rating Agency; or (iii) the Bank.
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 FNMA, FHLMC and GNMA.
Rating Agency: Each of S&P, Xxxxx'x and Fitch.
Relief Act Reduction: With respect to any Mortgage Loan as to which there
has been a reduction in the amount of the interest collectible thereon as a
result of the application of the Soldiers' and Sailors' Civil Relief Act of
1940, as amended, any amount by which interest collectible on such Mortgage
Loan for the Due Date in the related Due Period is less than the interest
accrued thereon for the applicable one-month period at the Mortgage Interest
Rate without giving effect to such reduction.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.12.
REO Property: A Mortgaged Property acquired by the Trustee on behalf of
the Trust through foreclosure or by deed in lieu of foreclosure, pursuant to
Section 3.12.
Retained Interest: With respect to each Mortgage Loan identified on
Schedule 2 hereto, interest in respect of each such Mortgage Loan retained by
the Retained Interest Holder at the Retained Interest Rate.
Retained Interest Holder: Not Applicable.
Retained Interest Rate: Not Applicable.
S&P: Standard & Poor's Rating Services, a division of the XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
Seller: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc., or
its successors in interest and assigns.
Servicer: Aurora Loan Services Inc. or its successor in interest or
assigns or any successor to the Servicer under this Agreement as herein
provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorneys' fees and disbursements) incurred in the performance by the 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 administrative 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, (d) taxes,
assessments, water rates, sewer rents and other charges which are or may
become a lien upon the Mortgaged Property, and PMI Policy premiums and fire
and hazard insurance coverage, (e) any losses sustained by the Servicer with
respect to the liquidation of the Mortgaged Property and (f) compliance with
the obligations pursuant to the provisions of the FHLMC Guide.
Servicing Fee: An amount equal to one-twelfth the product of (i) the
Servicing Fee Rate and (ii) the outstanding principal balance of such Mortgage
Loan. The obligation of the Trustee 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 3.02 of this Agreement) of such Monthly Payment collected
by the Servicer, or as otherwise provided under this Agreement.
Servicing Fee Rate: 0.50% per annum.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Trustee by the Servicer.
Servicing Officer: Any officer of the 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 Servicer to the Master
Servicer or Trustee (or its Custodian) upon request, as such list may from
time to time be amended.
Trust Agreement: As defined in the fourth RECITAL of this Agreement.
Trust Fund: The trust fund established by the Trust Agreement, the assets
of which consist of the Mortgage Loans and any related assets.
Trustee: First Union National Bank, or any successor in interest, or if
any successor trustee or co-trustee shall be appointed as provided in the
Trust Agreement, then such successor trustee or such co-trustee, as the case
may be.
VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto, including the Administration of Veterans
Affairs.
VA Approved Lender: Those lenders which are approved by the VA to act as
a lender in connection with the origination of VA Loans.
Any capitalized terms used and not defined in this Agreement shall have
the meanings ascribed to such terms in the Trust Agreement.
ARTICLE II.
SELLER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES
Section 2.01 Contract for Servicing; Possession of Servicing Files.
The Seller, by execution and delivery of this Agreement, does hereby
contract with the Servicer, subject to the terms of this Agreement, for the
servicing of the Mortgage Loans. On or before the Closing Date, the Seller
shall cause to be delivered the Servicing Files with respect to the Mortgage
Loans listed on the Mortgage Loan Schedule to the Servicer. Each Servicing
File delivered to a Servicer shall be held in trust by such Servicer for the
benefit of the Trustee, provided, however, that the Servicer shall have no
liability for any Servicing Files (or portions thereof) not delivered by the
Seller. The Servicer's possession of any portion of the Mortgage Loan
documents shall be at the will of the Trustee for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to this
Agreement, and such retention and possession by the Servicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and
the contents of the Servicing File shall be vested in the Trustee and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Servicer shall
immediately vest in the Trustee and shall be retained and maintained, in
trust, by the Servicer at the will of the Trustee in such custodial capacity
only. The portion of each Servicing File retained by the Servicer pursuant to
this Agreement shall be segregated from the other books and records of the
Servicer and shall be appropriately marked to clearly reflect the ownership of
the related Mortgage Loan by the Trustee. The Servicer shall release from its
custody the contents of any Servicing File retained by it only in accordance
with this Agreement.
Section 2.02 Books and Records.
(a) Subject to Section 3.01(a) hereof, as soon as practicable after the
Closing Date or the date on which a Qualifying Substitute Mortgage Loan is
delivered pursuant to Section 2.05 of the Trust Agreement, as applicable (but
in no event more than 90 days thereafter except to the extent delays are
caused by the applicable recording office), the Servicer, at the expense of
the Depositor, shall cause the Mortgage or Assignment of Mortgage, as
applicable, with respect to each MERS Eligible Mortgage Loan, to be properly
recorded in the name of MERS in the public recording office in the applicable
jurisdiction, or shall ascertain that such have previously been so recorded.
(b) Subject to Section 3.01(a) hereof, an Assignment of Mortgage in favor
of the Trustee shall be recorded as to each Non-MERS Mortgage Loan unless
instructions to the contrary are delivered to the Servicer, in writing, by the
Trustee. Subject to the preceding sentence, as soon as practicable after the
Closing Date (but in no event more than 90 days thereafter except to the
extent delays are caused by the applicable recording office), the Servicer, at
the expense of the Depositor, shall cause to be properly recorded in each
public recording office where such Non-MERS Eligible Mortgage Loans are
recorded each Assignment of Mortgage.
(c) Additionally, the Servicer shall prepare and execute, at the
direction of the Trustee, any note endorsements relating to any of the
Non-MERS Mortgage Loans.
(d) All rights arising out of the Mortgage Loans shall be vested in the
Trustee, subject to the Servicer's right to service and administer the
Mortgage Loans hereunder in accordance with the terms of this Agreement. All
funds received on or in connection with a Mortgage Loan, other than the
Servicing Fee and other compensation to which the Servicer is entitled as set
forth herein, including but not limited to in Section 5.01 below, shall be
received and held by the Servicer in trust for the benefit of the Trustee
pursuant to the terms of this Agreement.
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01 Servicer to Service.
The Servicer, as an independent contractor, shall service and administer
the Mortgage Loans from and after the Closing Date and shall have full power
and authority, acting alone, to do any and all things in connection with such
servicing and administration which the Servicer may deem necessary or
desirable, consistent with the terms of this Agreement and with Accepted
Servicing Practices.
The Seller and the Servicer additionally agree as follows:
(a) The Servicer shall (A) record or cause to be recorded the Mortgage or
the Assignment of Mortgage, as applicable, with respect to all MERS Eligible
Mortgage Loans, in the name of MERS, or shall ascertain that such have
previously been so recorded; (B) prepare or cause to be prepared all
Assignments of Mortgage with respect to all Non-MERS Eligible Mortgage Loans;
(C) record or cause to be recorded, subject to Section 2.02(b) hereof, all
Assignments of Mortgage with respect to Non-MERS Mortgage Loans in the name of
the Trustee; (D) pay the recording costs pursuant to Section 2.02 hereof;
and/or (E) track such Mortgages and Assignments of Mortgage to ensure they
have been recorded. The Servicer shall be entitled to be paid by the Seller
the fees set forth on Schedule 1 hereto for the preparation and recordation of
the Mortgages and Assignments of Mortgage. After the expenses of such
recording costs pursuant to Section 2.02 hereof shall have been paid by the
Servicer, the Servicer shall submit to the Depositor a reasonably detailed
invoice for reimbursement of recording costs it incurred hereunder.
(b) The Servicer shall, in accordance with the relevant provisions of the
Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990, as the same may be
amended from time to time, and the regulations provided in accordance with the
Real Estate Settlement Procedures Act, provide notice to the Mortgagor of each
Mortgage of the transfer of the servicing thereto to the Servicer.
(c) The Servicer shall be responsible for the preparation of and costs
associated with notifications to Mortgagors of the assumption of servicing by
the Servicer.
(d) To the best of its knowledge, the Servicer, in its origination
practices, is currently materially in compliance with HOEPA and will continue
to operate its business in compliance with HOEPA.
Consistent with the terms of this Agreement, the Servicer may waive any
late payment charge, assumption fee or other fee that may be collected in the
ordinary course of servicing the Mortgage Loans. The Servicer shall not make
any future advances to any Mortgagor under any Mortgage Loan, and (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is,
in the judgment of the Servicer, reasonably foreseeable) the Servicer shall
not permit any modification of any material term of any Mortgage Loan,
including any modification 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 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, make a Monthly Advance in accordance with
Section 4.03, in an amount equal to 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 Servicer shall be entitled to reimbursement for such advances
to the same extent as for all other advances made pursuant to Section 4.03.
Without limiting the generality of the foregoing, the Servicer shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself and the Trustee, 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.
Upon the request of the Servicer, the Trustee shall execute and deliver to the
Servicer any powers of attorney and other documents, furnished to it by the
Servicer and reasonably satisfactory to the Trustee, necessary or appropriate
to enable the Servicer to carry out its servicing and administrative duties
under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the Servicer
shall not (unless the Servicer determines, in its own discretion, that there
exists a situation of extreme hardship to the Mortgagor), waive any premium or
penalty in connection with a prepayment of principal of any Mortgage Loan, and
shall not consent to the modification of any Mortgage Note to the extent that
such modification relates to payment of a prepayment premium or penalty.
Section 3.02 Collection of Mortgage Loan Payments.
Continuously from the Closing Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the 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 3.03 Establishment of and Deposits to Custodial Account.
The 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 "in trust for
Xxxxx Fargo Bank Minnesota, National Association, as Master Servicer for ARC
2000-BC3 Trust." The Custodial Account shall be established with a Qualified
Depository. Any funds deposited in the Custodial Account may be invested in
Eligible Investments subject to the provisions of Section 3.11 hereof. Funds
deposited in the Custodial Account may be drawn on by the Servicer in
accordance with Section 3.04 hereof. The creation of any Custodial Account
shall be evidenced by a letter agreement in the form of Exhibit B. A copy of
such certification or letter agreement shall be furnished to the Master
Servicer and, upon request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein, the following collections received by the Servicer and
payments made by the Servicer after the Closing Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
(including Prepayment Penalty Amounts) adjusted to the Mortgage Loan
Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds;
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) any Prepayment Interest Shortfall Amount required to be paid by
the Servicer;
(vii) all Advances made by the Servicer pursuant to Section 4.03;
(viii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(ix) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds; and
(x) any other amount required hereunder to be deposited by the
Servicer in the Custodial Account.
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 (i) late payment charges
and insufficient fund charges, (ii) assumption fees, (iii) other Ancillary
Income and (iv) Servicing Fees need not be deposited by the Servicer into the
Custodial Account.
On each Remittance Date, the Servicer shall remit the Retained Interest
to the Retained Interest Holder.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement
and accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.
Section 3.04 Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Master Servicer in the amounts and in
the manner provided for in Section 4.01;
(ii) in the event the Servicer has elected not to retain the
Servicing Fee out of any Mortgagor payments on account of interest or other
recovery of interest with respect to a particular Mortgage Loan (including
late collections of interest on such Mortgage Loan, or interest portions of
Insurance Proceeds or Liquidation Proceeds) prior to the deposit of such
Mortgagor payment or recovery in the Custodial Account, to pay to itself the
related Servicing Fee from all such Mortgagor payments on account of interest
or other such recovery for interest with respect to that Mortgage Loan;
(iii) to pay itself investment earnings on funds deposited in the
Custodial Account;
(iv) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(v) to transfer funds to another Qualified Depository in accordance
with Section 3.11 hereof;
(vi) to invest funds in certain Eligible Investments in accordance
with Section 3.11 hereof;
(vii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 4.03. The Servicer's right to reimburse itself
pursuant to this subclause (vii) with respect to any Mortgage Loan shall be
limited to amounts received on or in respect of the related Mortgage Loan
which represent late recoveries of payments of principal or interest with
respect to which a Monthly Advance was made, it being understood that, in the
case of any such reimbursement, the Servicer's right thereto shall be prior to
the rights of the Trust Fund; provided, however, that following the final
liquidation of a Mortgage Loan, the Servicer may reimburse itself for
previously unreimbused Monthly Advances in excess of Liquidation Proceeds or
Insurance Proceeds with respect to such Mortgage Loan from the Custodial
Account, it being understood, in the case of any such reimbursement, that the
Servicer's right thereto shall be prior to the rights of the Trust Fund; and
(viii) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Servicer's right to reimburse itself
pursuant to this subclause (viii) with respect to any Mortgage Loan being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and other amounts received in respect of
the related REO Property, and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Trust Fund.
Section 3.05 Establishment of and Deposits to Escrow Account.
The 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 "in trust for Xxxxx Fargo Bank Minnesota, National Association, as
Master Servicer for ARC 2000-BC3 Trust." The Escrow Accounts shall be
established with a Qualified Depository in a manner that shall provide maximum
available insurance thereunder. Funds deposited in the Escrow Account may be
drawn on by the Servicer in accordance with Section 3.06. The creation of any
Escrow Account shall be evidenced by a letter agreement in the form of Exhibit
C. A copy of such certification or letter agreement shall be furnished to the
Master Servicer and, upon request, to any subsequent owner of the Mortgage
Loans.
The 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 that are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall 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. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required
by law, the 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 3.06 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, sewer rents, mortgage insurance premiums, condominium charges,
fire and hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
(iii) 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;
(iv) for application to restoration or repair of the Mortgaged
Property in accordance with the FHLMC Guide;
(v) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account; and
(vi) to clear and terminate the Escrow Account on the termination of
this Agreement.
Section 3.07 [Reserved]
Section 3.08 Fidelity Bond and Errors and Omissions Insurance.
The Servicer shall keep in force during the term of this Agreement a
Fidelity Bond and Errors and Omissions Insurance. Such Fidelity Bond and
Errors and Omissions Insurance shall be maintained with recognized insurers
and shall be in such form and amount as would permit the Servicer to be
qualified as a FHLMC servicer. The Servicer shall be deemed to have complied
with this provision if an affiliate of the Servicer has such errors and
omissions and fidelity bond coverage and, by the terms of such insurance
policy or fidelity bond, the coverage afforded thereunder extends to the
Servicer. The Servicer shall furnish to the Master Servicer a copy of each
such bond and insurance policy if the Master Servicer so requests.
Section 3.09 Notification of Adjustments.
With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The 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 and Monthly Payment adjustments. The Servicer shall
promptly, upon written request therefor, deliver to the Master Servicer 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 Servicer or the receipt of notice from the Master Servicer
that the Servicer has failed to adjust a Mortgage Interest Rate or Monthly
Payment in accordance with the terms of the related Mortgage Note, the
Servicer shall immediately deposit in the Custodial Account from its own funds
the amount of any interest loss or deferral caused thereby.
Section 3.10 [Reserved]
Section 3.11 Protection of Accounts.
The 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 Master Servicer, which consent
shall not be withheld unreasonably.
The Servicer shall bear any expenses, losses or damages sustained by the
Master Servicer or the Trustee if 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 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
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 Business Day immediately
preceding the related Remittance Date, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Servicer) that maintains the Custodial Account or the Escrow Account, then
such Eligible Investment may mature on the related Remittance Date. Any such
Eligible Investment shall be made in the name of the Servicer in trust for the
benefit of the Trustee. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer and may be withdrawn at
any time by the Servicer. Any losses incurred in respect of any such
investment shall be deposited in the Custodial Account or the Escrow Account,
by the Servicer out of its own funds immediately as realized.
Section 3.12 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 Trustee (or MERS, as applicable), or in the
event the Trustee is not authorized or permitted to hold title to real
property in the state where the REO Property is located, or would be adversely
affected under the "doing business" or tax laws of such state by so holding
title, the deed or certificate of sale shall be taken in the name of such
Person or Persons as shall be consistent with an Opinion of Counsel obtained
by the Servicer from any attorney duly licensed to practice law in the state
where the REO Property is located. The Person or Persons holding such title
other than the Trustee shall acknowledge in writing that such title is being
held as nominee for the Trustee.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the
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 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 Servicer deems to be in the best interest of the Trustee.
Notwithstanding anything to the contrary contained in this Section 3.12,
in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, in the event the Servicer has reasonable cause to believe that a
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
or if the Trustee or the Master Servicer otherwise requests, an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector shall be arranged by the Servicer. Upon completion of the
inspection, the Servicer shall provide the Trustee, the Master Servicer and
the Guarantor with a written report of such environmental inspection. In the
event that the environmental inspection report indicates that the Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, the
Servicer shall not proceed with foreclosure or acceptance of a deed in lieu of
foreclosure. In the event that the environmental inspection report is
inconclusive as to the whether or not the Mortgaged Property is contaminated
by hazardous or toxic substances or wastes, the Servicer shall not, without
the prior approval of the Trustee and the Guarantor, proceed with foreclosure
or acceptance of a deed in lieu of foreclosure. In such instance, the Trustee
and the Guarantor shall be deemed to have approved such foreclosure or
acceptance of a deed in lieu of foreclosure unless either of them notifies the
Servicer in writing, within five (5) days after its receipt of written notice
of the proposed foreclosure or deed in lieu of foreclosure from the Servicer,
that it disapproves of the related foreclosure or acceptance of a deed in lieu
of foreclosure. The Servicer shall be reimbursed for all Servicing Advances
made pursuant to this paragraph with respect to the related Mortgaged Property
from the Custodial Account.
In the event that the Trust Fund acquires any REO Property in connection
with a default or imminent default on a Mortgage Loan, the Servicer shall
dispose of such REO Property not later than the end of the third taxable year
after the year of its acquisition by the Trust Fund unless the Servicer has
applied for and received a grant of extension from the Internal Revenue
Service to the effect that, under the REMIC Provisions and any relevant
proposed legislation and under applicable state law, the applicable Trust
REMIC may hold REO Property for a longer period without adversely affecting
the REMIC status of such REMIC or causing the imposition of a federal or state
tax upon such REMIC. If the Servicer has received such an extension, then the
Servicer shall continue to attempt to sell the REO Property for its fair
market value for such period longer than three years as such extension permits
(the "Extended Period"). If the Servicer has not received such an extension
and the Servicer is unable to sell the REO Property within the period ending 3
months before the end of such third taxable year after its acquisition by the
Trust Fund or if the Servicer has received such an extension, and the Servicer
is unable to sell the REO Property within the period ending three months
before the close of the Extended Period, the Servicer shall, before the end of
the three year period or the Extended Period, as applicable, (i) purchase such
REO Property at a price equal to the REO Property's fair market value or (ii)
auction the REO Property to the highest bidder (which may be the Servicer) in
an auction reasonably designed to produce a fair price prior to the expiration
of the three-year period or the Extended Period, as the case may be. The
Trustee shall sign any document or take any other action reasonably requested
by the Servicer which would enable the Servicer, on behalf of the Trust Fund,
to request such grant of extension.
Notwithstanding any other provisions of this Agreement, no REO Property
acquired by the Trust Fund shall be rented (or allowed to continue to be
rented) or otherwise used by or on behalf of the Trust Fund in such a manner
or pursuant to any terms that would: (i) cause such REO Property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code; or (ii) subject any Trust REMIC to the imposition of any federal
income taxes on the income earned from such REO Property, including any taxes
imposed by reason of Sections 860F or 860G(c) of the Code, unless the Servicer
has agreed to indemnify and hold harmless the Trust Fund with respect to the
imposition of any such taxes.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
Subject to the approval of the Master Servicer as described in this
paragraph, the disposition of REO Property shall be carried out by the
Servicer at such price, and upon such terms and conditions, as the Servicer
deems to be in the best interests of the Trust Fund. Prior to acceptance by
the Servicer of an offer to sell any REO Property, the Servicer shall notify
the Master Servicer and the Trustee of such offer in writing which
notification shall set forth all material terms of said offer (each a "Notice
of Sale"). The Master Servicer shall approve the sale of any REO Property in
writing within 2 Business Days after its receipt of the related Notice of Sale
and the Master Servicer's failure to provide such approval within such time
period shall be deemed its approval of such sale. With respect to any REO
Property, upon a REO Disposition, the Servicer shall be entitled to retain
from REO Disposition Proceeds a disposition fee equal to the lesser of (A)
1.5% of the Net Sale Proceeds or (B) $1,250; provided, however, that (1) in
the event that the REO Disposition Proceeds exceed $25,000, such disposition
fee shall not be less than $500 and (2) in the event that the REO Disposition
Proceeds are $25,000 or less, such disposition fee shall be equal to $250. The
proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account. After the expenses of such disposition shall have been
paid, the Servicer shall reimburse itself pursuant to Section 3.04 hereof for
any Servicing Advances it incurred with respect to such REO Property.
The Servicer shall withdraw from the Custodial Account funds necessary
for the proper operation, management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to the FHLMC
Guides. The Servicer shall make monthly distributions on each Remittance Date
to the Master Servicer of the net cash flow from the REO Property (which shall
equal the revenues from such REO Property net of the expenses described in
this Section 3.12 and of any reserves reasonably required from time to time to
be maintained to satisfy anticipated liabilities for such expenses).
Section 3.13 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall furnish to the Master Servicer on or before the Remittance Date
each month a statement with respect to any REO Property covering the operation
of such REO Property for the previous month and the 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 Master Servicer shall
reasonably request.
Section 3.14 MERS.
(a) The Servicer shall take such actions as are necessary to cause the
Trustee to be clearly identified as the owner of each MERS Mortgage Loan on
the records of MERS for purposes of the system of recording transfers of
beneficial ownership of mortgages maintained by MERS.
(b) The Servicer shall maintain in good standing its membership in MERS.
In addition, the Servicer shall comply with all rules, policies and procedures
of MERS, including the Rules of Membership, as amended, and the MERS
Procedures Manual, as amended.
(c) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall promptly notify MERS as to any transfer of beneficial ownership
or release of any security interest in such Mortgage Loans.
(d) With respect to all MERS Mortgage Loans serviced hereunder, the
Servicer shall notify MERS as to any transfer of servicing pursuant to Section
3.15 or Section 9.01 within 10 Business Days of such transfer of servicing.
The Servicer shall cooperate with the Trustee, the Master Servicer and any
successor Servicer to the extent necessary to ensure that such transfer of
servicing is appropriately reflected on the MERS system.
ARTICLE IV.
PAYMENTS TO MASTER SERVICER
Section 4.01 Remittances.
On each Remittance Date the Servicer shall remit on a scheduled/scheduled
basis by wire transfer of immediately available funds to the Master Servicer
(a) all amounts deposited in the Custodial Account as of the close of business
on the last day of the related Due Period (net of charges against or
withdrawals from the Custodial Account pursuant to Section 3.04), plus (b) all
Monthly Advances, if any, which the Servicer is obligated to make pursuant to
Section 4.03, minus (c) any amounts attributable to Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or REO
Disposition Proceeds received after the applicable Due Period, which amounts
shall be remitted on the following Remittance Date, together with any
additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 3.03(vi),
and minus (d) any amounts attributable to Monthly Payments collected but due
on a Due Date or Due Dates subsequent to the first day of the month in which
such Remittance Date occurs, which amounts shall be remitted on the Remittance
Date next succeeding the Due Date related to such Monthly Payment.
With respect to any remittance received by the Master Servicer after the
Business Day on which such payment was due, the Servicer shall pay to the
Master Servicer interest on any such late payment at an annual rate equal to
the Prime Rate, adjusted as of the date of each change, plus two (2)
percentage points, but in no event greater than the maximum amount permitted
by applicable law. Such interest shall be deposited in the Custodial Account
by the Servicer on the date such late payment is made and shall cover the
period commencing with the day following such 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 Servicer of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Servicer.
All remittances required to be made to the Master Servicer shall be made
to the following wire account or to such other account as may be specified by
the Master Servicer from time to time:
Xxxxx Fargo Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account #: 0000000000
Account Name: Corporate Trust Clearing
For further credit to: Collection Account No. 00000000 (ARC 2000-BC3)
Section 4.02 Statements to Master Servicer.
Not later than the 10th calendar day of each month (or if such 10th
calendar day is not a Business Day, the immediately preceding Business Day),
the Servicer shall furnish to the Master Servicer (a) a monthly remittance
advice in the form of Exhibit A-1 attached hereto or other format mutually
acceptable to the Servicer, the Master Servicer, the Trustee and the Guarantor
as to the accompanying remittance and the period ending on the last day of the
preceding Determination Date and (b) all such information required pursuant to
clause (a) above on a magnetic tape or other similar media reasonably
acceptable to the Master Servicer.
Such monthly remittance advice shall also include on a cumulative and
aggregate basis (i) the amount of claims filed, (ii) the amount of any claim
payments made, (iii) the amount of claims denied and (iv) policies cancelled
with respect to those Serviced Mortgage Loans covered by the MGIC PMI
Insurance Policy or any other provider of primary mortgage insurance purchased
by the Trust. The Master Servicer will convert such data into a format
acceptable to the Guarantor and provide monthly reports to the Guarantor
pursuant to the Trust Agreement; provided, however, notwithstanding anything
to the contrary contained in the MGIC PMI Insurance Policy, the Servicer shall
not be required to submit any reports to MGIC until a reporting date that is
at least 15 days after the Servicer has received sufficient loan level detail
information from the Depositor to appropriately code its servicing system in
accordance with MGIC requirements.
In addition, not more than 60 days after the end of each calendar year,
commencing December 31, 2000, the Servicer shall provide (as such information
becomes reasonably available to the Servicer) the Master Servicer such
information concerning the Mortgage Loans and annual remittances to the Master
Servicer therefrom as is necessary for each Certificateholder to prepare its
federal income tax return. Such obligation of the Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Servicer to the Master Servicer pursuant to any
requirements of the Code as from time to time are in force.
Beginning with calendar year 2001, the Servicer shall prepare and file
any and all tax returns, information statements or other filings for the
portion of the tax year 2000 and the portion of subsequent tax years for which
the Servicer has serviced some or all of the Mortgage Loans hereunder as such
returns, information statements or other filings are required to be delivered
to any governmental taxing authority or to the Master Servicer pursuant to any
applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby. In addition, the Servicer shall provide the Master
Servicer with such information concerning the Mortgage Loans as is necessary
for the Master Servicer to prepare the Trust Fund's federal income tax return.
Section 4.03 Monthly Advances by Servicer.
On the Business Day immediately preceding each Remittance Date, the
Servicer shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
which were due on the Mortgage Loans during the applicable Due Period and
which were delinquent at the close of business on the immediately preceding
Determination Date. Any amounts held for future distribution and so used shall
be replaced by the Servicer by deposit in the Custodial Account on or before
any future Remittance Date if funds in the Custodial Account on such
Remittance Date shall be less than remittances to the Master Servicer required
to be made on such Remittance Date. The Servicer shall keep appropriate
records of such amounts and will provide such records to the Master Servicer
and the Guarantor upon request. The Guarantor, in its reasonable judgment,
shall have the right to require the Servicer to remit from its own funds to
the Custodial Account an amount equal to all Monthly Advances previously made
out of funds held in the Custodial Account and not previously reimbursed from
collections on the Mortgage Loans, and in such event, the Servicer shall
thereafter remit all Monthly Advances from its own funds. In no event shall
the preceding sentence be construed as limiting the Servicer's right to (i)
pass through late collections on the related Mortgage Loans in lieu of making
Monthly Advances or (ii) reimburse itself for such Monthly Advances from late
collections on the related Mortgage Loans.
The Servicer shall make Monthly Advances through the Distribution Date
immediately preceding the distribution of all Liquidation Proceeds and other
payments or recoveries (including insurance proceeds and condemnation
proceeds) with respect to the related Mortgage Loans.
Section 4.04 Compensating Interest.
The Servicer shall deposit in the Custodial Account on a daily basis, and
retain therein with respect to each Principal Prepayment, the Prepayment
Interest Shortfall Amount, if any, for the month of such distribution. Such
deposit shall be made from the Servicer's own funds, without reimbursement
therefor up to a maximum amount per month of the Servicing Fee actually
received for such month for the Mortgage Loans.
Section 4.05 Credit Reporting.
For each Mortgage Loan, in accordance with its current servicing
practices, the Servicer will accurately and fully report its underlying
borrower credit files to each of the following credit repositories or their
successors: Equifax Credit Information Services, Inc., Trans Union, LLC and
Experian Information Solution, Inc., on a monthly basis in a timely manner.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01 Servicing Compensation.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain (a) the relevant Servicing Fee for each
Mortgage Loan remaining subject to this Agreement during any month and (b)
Ancillary Income. The Servicing Fee shall be payable monthly. The Servicing
Fees shall be payable only at the time of and with respect to those Mortgage
Loans for which payment is in fact made of the entire amount of the Monthly
Payment or as otherwise provided in Section 3.04. The obligation of the
Trustee to pay the Servicing Fees is limited as provided in Section 3.04. The
aggregate of the Servicing Fees payable to the Servicer for any month with
respect to the Mortgage Loans shall be reduced by any Prepayment Interest
Shortfall Amount with respect to such month.
The 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 5.02 Annual Audit Report.
On or before April 30 of each year, beginning with April 30, 2001,
Servicer shall, at its own expense, cause a firm of independent public
accountants (who may also render other services to Servicer), which is a
member of the American Institute of Certified Public Accountants, to furnish
to the Seller, the Master Servicer and the Guarantor (i) year-end audited (if
available) financial statements of the Servicer and (ii) a statement to the
effect that such firm has examined certain documents and records for the
preceding fiscal year (or during the period from the date of commencement of
such servicer's duties hereunder until the end of such preceding fiscal year
in the case of the first such certificate) and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, such firm is of the opinion that
Servicer's overall servicing operations have been conducted in compliance with
the Uniform Single Attestation Program for Mortgage Bankers except for such
exceptions that, in the opinion of such firm, the Uniform Single Attestation
Program for Mortgage Bankers requires it to report, in which case such
exceptions shall be set forth in such statement.
Section 5.03 Annual Officer's Certificate.
On or before April 30 of each year, beginning with April 30, 2001, the
Servicer, at its own expense, will deliver to the Seller, the Master Servicer
and the Guarantor a Servicing Officer's certificate stating, as to each signer
thereof, that (i) a review of the activities of the Servicer during such
preceding fiscal year and of performance under this Agreement has been made
under such officers' supervision, and (ii) to the best of such officers'
knowledge, based on such review, the Servicer has fulfilled all its
obligations under this Agreement for such year, or, if there has been a
default in the fulfillment of all such obligations, specifying each such
default known to such officers and the nature and status thereof including the
steps being taken by the Servicer to remedy such default.
ARTICLE VI.
REPRESENTATIONS, WARRANTIES
AND AGREEMENTS
Section 6.01 Representations, Warranties and Agreements of the Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Seller as of the Closing Date:
(a) Due Organization and Authority. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware 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 Servicer, and in any event the Servicer is in compliance with the laws
of any such state to the extent necessary to ensure the enforceability of the
terms of this Agreement; the Servicer has the full power and authority to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
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 Servicer and all requisite action has been
taken by the Servicer to make this Agreement valid and binding upon the
Servicer in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the servicing responsibilities by the Servicer or the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Servicer's
organizational documents or any legal restriction or any agreement or
instrument to which the 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 Servicer or its property is subject, or impair the ability
of the Servicer to service the Mortgage Loans, or impair the value of the
Mortgage Loans;
(d) Ability to Perform. The 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;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the 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
Servicer, or in any material impairment of the right or ability of the
Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer, or which would draw into
question the validity of this Agreement or of any action taken or to be taken
in connection with the obligations of the Servicer contemplated herein, or
which would be likely to impair materially the ability of the Servicer to
perform under the terms of this Agreement;
(f) 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 Servicer of or compliance by the Servicer with
this Agreement;
(g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for FNMA, FHLMC or GNMA, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is in good standing to service mortgage loans for either FNMA, FHLMC
or GNMA. The Servicer is a member in good standing of the MERS system;
(h) 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; and
(i) No Commissions to Third Parties. The Servicer has not dealt with any
broker or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than the Seller.
Section 6.02 Remedies for Breach of Representations and Warranties of the
Servicer.
It is understood and agreed that the representations and warranties set
forth in Section 6.01 shall survive the engagement of the Servicer to perform
the servicing responsibilities as of the Closing Date hereunder and the
delivery of the Servicing Files to the Servicer and shall inure to the benefit
of the Seller, the Trustee and the Guarantor. Upon discovery by either the
Servicer, the Master Servicer, the Guarantor, the Trustee or the Seller of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the ability of the Servicer to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property or the interest of the Seller,
the Trustee or the Guarantor the party discovering such breach shall give
prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section
6.01 which materially and adversely affects the ability of the Servicer to
perform its duties and obligations under this Agreement or otherwise
materially and adversely affects the value of the Mortgage Loans, the
Mortgaged Property or the priority of the security interest on such Mortgaged
Property, the Servicer shall use its Best Efforts promptly to cure such breach
in all material respects and, if such breach cannot be cured, the Servicer
shall, at the Trustee's or the Master Servicer's option, assign the Servicer's
rights and obligations under this Agreement (or respecting the affected
Mortgage Loans) to a successor Servicer. Such assignment shall be made in
accordance with Sections 9.01 and 9.02.
In addition, the Servicer shall indemnify the Seller, the Guarantor, the
Trustee and the Master Servicer and hold each of them harmless against any
Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Servicer representations and
warranties contained in this Agreement. It is understood and agreed that the
remedies set forth in this Section 6.02 constitute the sole remedies of the
Master Servicer, the Guarantor and the Trustee respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
the Seller, the Guarantor, the Trustee or Master Servicer to the Servicer,
(ii) failure by the Servicer to cure such breach within the applicable cure
period, and (iii) demand upon the Servicer by the Seller, the Trustee, the
Guarantor or the Master Servicer for compliance with this Agreement.
Section 6.03 Additional Indemnification by the Servicer; Third Party
Claims.
The Servicer shall indemnify the Seller, the Master Servicer, the
Guarantor and the Trust Fund and hold them harmless against any and all Costs
that the indemnified party may sustain in any way related to (i) the failure
of the Servicer to perform its duties and service the Mortgage Loans in
material compliance with the terms of this Agreement or (ii) the failure of
the Servicer to cause any event to occur which requires its "Best Efforts"
under this Agreement. The Servicer shall immediately notify the Seller, the
Master Servicer, the Guarantor, the Trustee, or any other relevant party if a
claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the prior written consent of the indemnified party) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or any indemnified party in respect of
such claim and follow any written instructions received from such indemnified
party in connection with such claim. The Servicer shall be promptly reimbursed
from the Trust Fund for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Servicer's
indemnification pursuant to Section 6.02, or the failure of the Servicer to
service and administer the Mortgage Loans in material compliance with the
terms of this Agreement. In the event a dispute arises between an indemnified
party and the Servicer with respect to any of the rights and obligations of
the parties pursuant to this Agreement, and such dispute is adjudicated in a
court of law, by an arbitration panel or any other judicial process, then the
losing party shall indemnify and reimburse the winning party for all
attorney's fees and other costs and expenses related to the adjudication of
said dispute.
ARTICLE VII.
THE SERVICER
Section 7.01 Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a corporation, and shall obtain and preserve its qualification
to do business as a foreign entity in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer, shall, with the prior written consent of the Guarantor, be the
successor of the Servicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor
or surviving Person shall be an institution (i) having a net worth of not less
than $25,000,000, and (ii) which is a FHLMC-approved servicer in good
standing.
Section 7.02 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Seller, the Master
Servicer, the Guarantor or the Trustee 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 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 Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer 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 Servicer may, with the consent of the Master
Servicer, undertake any such action which it may deem necessary or desirable
in respect of this Agreement and the rights and duties of the parties hereto.
In such event, the Servicer shall be entitled to reimbursement from the Trust
Fund for the reasonable legal expenses and costs of such action.
Section 7.03 Limitation on Resignation and Assignment by the Servicer.
The Seller has entered into this Agreement with the Servicer in reliance upon
the independent status of the 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 Servicer shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets without, in each case, the prior
written consent of the Seller, the Guarantor and the Master Servicer, which
consent, in the case of an assignment of rights or delegation of duties, shall
be granted or withheld in the discretion of the Seller, the Guarantor and the
Master Servicer, and which consent, in the case of a sale or disposition of
all or substantially all of the property or assets of the Servicer, shall not
be unreasonably withheld; provided, that in each case, there must be delivered
to the Master Servicer, the Trustee and the Guarantor a letter from each
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates.
Notwithstanding the foregoing, the Servicer, without the consent of the
Seller, the Master Servicer, the Guarantor or the Trustee, may retain third
party contractors to perform certain servicing and loan administration
functions, including without limitation, hazard insurance administration, tax
payment and administration, flood certification and administration, collection
services and similar functions; provided, that the retention of such
contractors by Servicer shall not limit the obligation of the Servicer to
service the Mortgage Loans pursuant to the terms and conditions of this
Agreement.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer, the Master Servicer
and the Guarantor or upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Servicer. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Master Servicer, the Guarantor and the Trustee which Opinion of Counsel
shall be in form and substance acceptable to the Master Servicer, the
Guarantor and the Trustee. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder in the manner provided in Section 9.01.
Without in any way limiting the generality of this Section 7.03, in the
event that the 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 Seller, the
Guarantor and the Master Servicer, then such parties shall have the right to
terminate this Agreement upon notice given as set forth in Section 8.01,
without any payment of any penalty or damages and without any liability
whatsoever to the Servicer or any third party.
ARTICLE VIII.
TERMINATION
Section 8.01 Termination for Cause.
This Agreement shall be terminable at the option of the Seller or the
Master Servicer if any of the following events of default exist on the part of
the Servicer:
(i) any failure by the Servicer to remit to the Master Servicer any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Days after the date upon which written
notice of such failure, requiring the same to be remedied, shall have been
given to the Servicer by the Master Servicer; or
(ii) failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period
of 15 days; or
(iii) failure by the Servicer to maintain its license to do business
or service residential mortgage loans in any jurisdiction, if required by such
jurisdiction, where the Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged or
unstayed for a period of 60 days; or
(v) the 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
Servicer or of or relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an
assignment for the benefit of its creditors, voluntarily suspend payment of
its obligations or cease its normal business operations for three Business
Days; or
(vii) the Servicer ceases to meet the qualifications of a FNMA,
FHLMC or GNMA lender/servicer; or
(viii) the Servicer attempts to assign the servicing of the Mortgage
Loans or its right to servicing compensation hereunder or the Servicer
attempts 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 case without complying fully with the provisions of Section
7.03.
In each and every such case, so long as an event of default shall not
have been remedied within the applicable cure period, in addition to whatever
rights the Seller or the Master Servicer may have at law or equity to damages,
including injunctive relief and specific performance, the Seller or the Master
Servicer, by notice in writing to the Servicer, may terminate all the rights
and obligations of the Servicer under this Agreement and in and to the
servicing contract established hereby and the proceeds thereof.
Upon receipt by the Servicer of such written notice, all authority and
power of the Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in a successor
Servicer appointed by the Seller and the Master Servicer. Upon written request
from the Seller, the Servicer shall prepare, execute and deliver to the
successor entity designated by the Seller any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement or assignment of the Mortgage Loans and
related documents, at the Servicer's sole expense. The Servicer shall
cooperate with the Seller and the Master Servicer and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited
by the Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
By a written notice, the Seller and the Master Servicer, with the consent
of the Guarantor, may waive any default by the 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.
Section 8.02 Termination Without Cause.
(a) This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Trust Fund, and (b) the disposition of all REO Property acquired
upon foreclosure of the last Mortgage Loan and the remittance of all funds due
hereunder or (ii) mutual consent of the Servicer and the Trustee in writing,
provided such termination is also acceptable to the Master Servicer, the
Guarantor and the Rating Agencies. In addition, with the prior written consent
of the Guarantor, the Directing Holder may terminate this Agreement with
respect to all of the Mortgage Loans, without cause, provided, that the
Directing Holder gives the Servicer 30 days' notice. Any such notice of
termination shall be in writing and delivered to the Servicer by registered
mail to the address set forth in Section 9.03. The Directing Holder and the
Servicer shall comply with the termination procedures set forth in Section
9.01 hereof. In connection with any termination pursuant to clause (ii) of the
first sentence of this Section 8.02(a), all unreimbursed Servicing Fees,
Servicing Advances and Monthly Advances still owing the Servicer shall be paid
at the time of such termination by the Trust Fund. Upon a termination of the
Servicer for cause pursuant to this Section 8.02 or Section 9.17, all
unreimbursed Servicing Fees, Servicing Advances and Monthly Advances still
owing the Servicer shall be paid by the Trust Fund as such amounts are
received from the related Mortgage Loans. In connection with any termination
pursuant to the second sentence of this Section 8.02(a), the Directing Holder
will be responsible for reimbursing the Servicer for all unreimbursed
out-of-pocket Servicing Advances, Monthly Advances and Servicing Fees and
other reasonable and necessary out-of-pocket costs associated with any
transfer of servicing at the time of such transfer of servicing.
(b) In the event that the Servicer decides to terminate its obligations
under this Agreement as set forth in clause (ii) of Section 8.02(a), the
Servicer agrees that it will continue to service the Mortgage Loans beyond the
prescribed termination date until such time as the Master Servicer, using
reasonable commercial efforts, is able to identify a successor servicer
meeting the characteristics of Sections 7.01 and 9.01.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.01 Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement (a) pursuant to Sections 6.02, 7.03, 8.01 or
8.02(a)(ii), the Master Servicer shall (i) succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of Section 7.01 and which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement; or (b) pursuant
to Section 8.02(a)(iii), the Seller shall appoint a successor having the
characteristics set forth in clauses (i) and (ii) of Section 7.01 and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement simultaneously with the
termination of the Servicer's responsibilities, duties and liabilities under
this Agreement. Any successor to the Servicer shall be subject to the approval
of the Master Servicer and the Guarantor and, to the extent required by the
Trust Agreement, the Trustee, shall be a member in good standing of the MERS
system (if any of the Mortgage Loans are MERS Eligible Mortgage Loans, unless
such Mortgage Loans are withdrawn from MERS and Assignments of Mortgage are
recorded in favor of the Trustee at the expense of the successor Servicer).
Any approval of a successor servicer by the Master Servicer and, to the extent
required by the Trust Agreement, the Trustee, shall be conditioned upon the
receipt by the Master Servicer, the Trustee and the Guarantor of a letter from
each Rating Agency to the effect that such transfer of servicing will not
result in a qualification, withdrawal or downgrade of the then-current rating
of any of the Certificates. In connection with such appointment and
assumption, the Master Servicer or the Seller, as applicable, may make such
arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree, provided, however, that
no such compensation shall be in excess of that permitted the Servicer under
this Agreement. In the event that the Servicer's duties, responsibilities and
liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the
Servicer pursuant to the aforementioned sections shall not become effective
until a successor shall be appointed pursuant to this Section 9.01 and shall
in no event relieve the Servicer of the representations and warranties made
pursuant to Section 6.01 and the remedies available to the Master Servicer,
the Guarantor and the Seller under Section 6.02 and 6.03, it being understood
and agreed that the provisions of such Sections 6.01, 6.02 and 6.03 shall be
applicable to the Servicer notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement.
Within a reasonable period of time, but in no event longer than 30 days
of the appointment of a successor entity, the Servicer shall prepare, execute
and deliver to the successor entity any and all documents and other
instruments, place in such successor's possession all Servicing Files, and do
or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement of the Mortgage Notes and related documents,
and the preparation and recordation of Assignments of Mortgage. The Servicer
shall cooperate with the Trustee, the Master Servicer or the Seller, as
applicable, and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Servicer, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Trustee, the Servicer, the Master Servicer and the Seller an
instrument (i) accepting such appointment, wherein the successor shall make
the representations and warranties set forth in Section 6.01 (including a
representation that the successor Servicer is a member of MERS, unless none of
the Mortgage Loans are MERS Mortgage Loans or MERS Eligible Mortgage Loans or
any such Mortgage Loans have been withdrawn from MERS and Assignments of
Mortgage are recorded in favor of the Trustee) and (ii) an assumption of the
due and punctual performance and observance of each covenant and condition to
be performed and observed by the Servicer under this Agreement, whereupon such
successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Servicer or termination of this Agreement pursuant to
Sections 6.02, 7.03, 8.01 or 8.02 shall not affect any claims that the Master
Servicer, the Guarantor or the Trustee may have against the Servicer arising
out of the Servicer's actions or failure to act prior to any such termination
or resignation. In addition, in the event any successor Servicer is appointed
pursuant to Section 8.02(a)(iii) of this Agreement, such successor Servicer
must satisfy the conditions relating to the transfer of servicing set forth in
the Trust Agreement.
The Servicer shall deliver promptly to the successor Servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Loan documents
and related documents and statements held by it hereunder and the Servicer
shall account for all funds and shall execute and deliver such instruments and
do such other things as may reasonably be required to more fully and
definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify the Trustee, the Seller, the Guarantor and Master Servicer of such
appointment in accordance with the procedures set forth in Section 9.03.
Section 9.02 Costs.
The Seller shall pay any legal fees and expenses of its attorneys. Costs
and expenses incurred in connection with the transfer of the servicing
responsibilities, including fees for delivering Servicing Files, shall be paid
by the Seller. Subject to Sections 2.02 and 3.01(a), the Depositor shall pay
the costs associated with the preparation, delivery and recording of
Assignments of Mortgages.
Section 9.03 Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if sent by facsimile or mailed by
overnight courier, addressed as follows (or such other address as may
hereafter be furnished to the other party by like notice):
(i) if to the Seller:
Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc.
Three World Financial Center
New York, New York 10285
Attention: Manager, Contract Finance
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(ii) if to the Servicer:
Aurora Loan Services Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
and
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Loan Administration
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(iii) if to the Master Servicer:
Xxxxx Fargo Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, ARC 2000-BC3
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iv) If to the Trustee:
First Union National Bank
000 X. Xxxxx Xxxxxx XX.0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Structured Finance Trust Services (ARC 2000-BC3)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(v) If to the Guarantor:
Federal Home Loan Mortgage Corporation
0000 Xxxxx Xxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Attention: Structured Finance - Director of Specialized
Business Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee.
Section 9.04 Severability Clause.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable
any provision hereof. If the invalidity of any part, provision, representation
or warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
Section 9.05 No Personal Solicitation.
From and after the Closing Date, the Servicer hereby agrees that it will
not take any action or permit or cause any action to be taken by any of its
agents or affiliates, or by any independent contractors on the Servicer's
behalf, to personally, by telephone or mail, solicit the borrower or obligor
under any Mortgage Loan (on a targeted basis) for any purposes of prepayment,
refinancing or modification of the related Mortgage Loan, provided, however,
that this limitation shall not prohibit Servicer from soliciting such
Mortgagor for purposes of prepayment, refinance or modification of any loan
owned or serviced by Servicer other than a Mortgage Loan. It is understood and
agreed that, among other marketing activities, promotions undertaken by
Servicer which are directed of the general public at large or which are
directed generally to a segment of the then existing customers of Servicer or
any of its direct or indirect subsidiaries (including, without limitation, the
mailing of promotional materials to Servicer's deposit customers by inserting
such materials into customer account statements, mass mailings based on
commercially acquired mailing lists and newspaper, radio and television
advertisements) shall not constitute solicitation under this section. In the
event the Servicer does refinance any Mortgage Loan as a result of a violation
of the requirements set forth in this Section 9.05, Servicer hereby agrees to
pay to the Trust Fund an amount equal to the difference, if any, between the
amount that the Trust Fund would have received if it had sold the Mortgage
Loan to a third party, and the proceeds received by the Trust Fund as result
of such refinancing.
Section 9.06 Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 9.07 Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Seller in the State of New York and
shall be deemed to have been made in the State of New York. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
Section 9.08 Further Agreements.
The Seller and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
Section 9.09 Intention of the Parties.
It is the intention of the parties that the Seller is conveying, and the
Servicer is receiving, only a contract for servicing the Mortgage Loans.
Accordingly, the parties hereby acknowledge that the Trust Fund remains the
sole and absolute owner of the Mortgage Loans and all rights (other than the
servicing rights) related thereto.
Section 9.10 Successors and Assigns; Assignment of Servicing Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable
by the Servicer, the Seller, the Trustee, the Master Servicer and the
Guarantor and their respective successors and assigns. This Agreement shall
not be assigned, pledged or hypothecated by the Servicer to a third party
except in accordance with Section 7.03.
Section 9.11 Assignment by Xxxxxx Capital.
The Seller shall have the right, upon notice to but without the consent
of the Servicer, to assign, in whole or in part, its interest under this
Agreement to the Depositor, which in turn shall assign such rights to the
Trustee, and the Trustee then shall succeed to all rights of the Seller under
this Agreement. All references to the Seller in this Agreement shall be deemed
to include its assignee or designee and any subsequent assignee or designee,
specifically including the Trustee.
Section 9.12 [[Reserved.]]
Section 9.13 Waivers.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
Section 9.14 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 9.15 Intended Third Party Beneficiaries.
Notwithstanding any provision herein to the contrary, the parties to this
Agreement agree that it is appropriate, in furtherance of the intent of such
parties as set forth herein, that the Master Servicer, the Trustee, the
Guarantor and the Directing Holder receive the benefit of the provisions of
this Agreement as intended third party beneficiaries of this Agreement to the
extent of such provisions. The Servicer shall have the same obligations to the
Master Servicer, the Trustee, the Guarantor and the Directing Holder as if
they were parties to this Agreement, and the Master Servicer, the Trustee, the
Guarantor and the Directing Holder shall have the same rights and remedies to
enforce the provisions of this Agreement as if they were parties to this
Agreement. The Servicer shall only take direction from the Master Servicer (if
direction by the Master Servicer is required under this Agreement) unless
otherwise directed by this Agreement or the Loss Mitigation Advisory
Agreement. Notwithstanding the foregoing, all rights and obligations of the
Master Servicer and the Trustee hereunder (other than the right to
indemnification) shall terminate upon termination of the Trust Agreement and
of the Trust Fund pursuant to the Trust Agreement, and all rights of the
Guarantor hereunder (other than the right to indemnification) shall terminate
upon termination of the Trust Fund.
Section 9.16 Guarantor Audit and Inspection Rights: Access to Financial
Statements.
(a) During business hours, or at such other times as may be reasonable
under the applicable circumstances, and upon reasonable advance notice to the
Servicer, the Guarantor, with the assistance and cooperation of an appropriate
Servicing Officer or other knowledgeable financial officer of the Servicer,
shall have the right to (i) review and audit the Servicer's servicing
procedures as they relate to the Serviced Mortgage Loans and (ii) examine and
audit the Servicing Files and related book, records and other information of
the Servicer, but solely as they relate to the Serviced Mortgage Loans and
this Agreement.
(b) Within ninety days after the Closing Date, to the extent the
Servicing Files contain information relating to the underwriting criteria used
in the origination of each Mortgage Loan, the Guarantor will have the right to
review up to 800 of the Servicing Files and the related underwriting
documentation in order to ascertain whether each such Mortgage Loan was
originated generally in accordance with the applicable underwriting standards.
If the Guarantor determines that more than 20% (by number) of such 800
Mortgage Loans were not originated in accordance with the applicable
underwriting standards, the Guarantor will have the right to review additional
Servicing Files until the Guarantor obtains a sample containing less than 20%
(by number) of Mortgage Loans not so originated.
(c) With respect to any Mortgage Loan that goes into foreclosure, the
Guarantor will have the right to request the Servicer to deliver a copy of the
related Servicing File to the Guarantor to review.
(d) The Servicer shall make available upon the request of the Guarantor
any comparable interim financial statements, but only to the extent that such
statements have been prepared by or on behalf of the Servicer in the normal
course of its business and are available upon request to its members or
stockholders or to the public at large.
Section 9.17 Guarantor Right of Termination or Declaration of Event of
Default.
Notwithstanding any other provision of this Agreement, in the event
either (i) any Class of Certificates issued by the Trust Fund with an initial
rating assigned by the Rating Agencies of "AA" (or an equivalent rating) is
downgraded to "A" (or an equivalent rating) or lower, or (ii) a Realized Loss
is applied to reduce the principal balance of the Class B Certificates, the
Guarantor, in its sole discretion, shall have the right to terminate the
Servicer or Servicers (or any subservicers) of the Serviced Mortgage Loans to
which such applied Realized Loss is attributable and to appoint a successor
servicer in accordance with the procedures set forth in Section 9.01.
Section 9.18 Fees for Failure to Provide Timely Reports.
In the event the Master Servicer fails to provide certain reports to the
Guarantor accurately, completely and timely due to the Servicer's failure to
timely provide the necessary information to the Master Servicer, and the
Master Servicer is required to pay a fee to the Guarantor, such fee shall be
paid by the Servicer. The fees are as follows:
1. For the first such failure, the amount of $500.
2. For the second such failure, the amount of $750.
3. For the third such failure, the amount of $1,000.
4. The fourth such failure in any successive two-year period shall
constitute a Servicer Event of Default under this Agreement.
Neither the Servicer nor the Master Servicer shall be required to make
any such payments upon the first such failure during each successive two year
period following the Closing Date.
Section 9.19 Confidentiality.
The Servicer and the Master Servicer shall keep the terms of this
Agreement and the Trust Agreement regarding fees and expenses confidential to
the extent such information is not otherwise disclosed in or pursuant to the
Trust Agreement or any publicly available documents.
Section 9.20 Deficiency Judgments.
Pursuant to the Trust Agreement, the Holders of the Subordinate
Certificates that are or may be affected by a Realized Loss on a Liquidated
Mortgage Loan are deemed to have repurchased the ownership interest in such
Liquidated Mortgage Loan held by Holders of the Senior Certificates. In
connection with the liquidation of a Mortgage Loan, if (i) the Servicer is
directed by the Master Servicer to seek a deficiency judgment, (ii) the
Servicer is offered suitable indemnification and reimbursement for expenses
from the Holders of Subordinate Certificates, and (iii) such action is
permitted by law, the Servicer shall seek a deficiency judgment under such
Liquidated Mortgage Loan on behalf of the Holders of the Subordinate
Certificates to the extent of any Realized Loss.
Section 9.21 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 9.22 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
IN WITNESS WHEREOF, the Servicer and the Seller have caused their names
to be signed hereto by their respective officers thereunto duly authorized as
of the date first above written.
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., as Seller
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Authorized Signatory
AURORA LOAN SERVICES INC.,
as Servicer
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title: President
Acknowledged by:
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Master Servicer
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Xxxxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Trust Officer
FEDERAL HOME LOAN MORTGAGE CORPORATION,
as Guarantor
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director-Securities Servicing & Processing
EXHIBIT A-1
Schedule of Mortgage Loans
EXHIBIT A-2
MONTHLY REPORTING FORMAT TO XXXXX FARGO BANK MINNESOTA
The format for the tape should be:
1. Record length of 240
2. Blocking factor of 07 records per block
3. ASCII
4. Unlabeled tape
5. 6250 or 1600 BPI (please indicate)
COBOL
Field Name Position Length "picture"
---------- -------- ------ ---------
Master Servicer No. 001-002 2 "01"
Unit Code 003-004 2 " "
Loan Number 005-014 10 X(10)
Borrower Name 015-034 20 X(20)
Old Payment Amount 035-045 11 S9(9)V9(02)
Old Loan Rate 046-051 6 9(2)V9(04)
Servicer Fee Rate 052-057 6 9(2)V9(04)
Servicer Ending Balance 058-068 11 S9(9)V9(02)
Servicer Next Due Date 069-076 8 CCYYMMDD
Curtail Amt 1 - Before 077-087 11 S9(9)V9(02)
Curtail Date 1 088-095 8 CCYYMMDD
Curtail Amt 1 - After 096-106 11 S9(9)V9(02)
Curtail Amt 2 - Before 107-117 11 S9(9)V9(02)
Curtail Date 2 118-125 8 CCYYMMDD
Curtail Amt 2 - After 126-136 11 S9(9)V9(02)
Curtail Amt 3 - Before 137-147 11 S9(9)V9(02)
Curtail Date 3 148-155 8 CCYYMMDD
Curtail Amt 3 - After 156-166 11 S9(9)V9(02)
New Payment Amount 167-177 11 S9(9)V9(02)
New Loan Rate 178-183 6 9(2)V9(04)
Index Rate 184-189 6 9(2)V9(04)
Remaining Term 190-192 3 9(3)
Liquidation Amount 193-203 11 S9(9)V9(02)
Action Code 204-205 2 X(02)
Scheduled Principal 206-216 11 S9(9)V9(02)
Scheduled Interest 217-227 11 S9(9)V9(02)
Scheduled Ending Balance 228-238 11 S9(9)V9(02)
FILLER 239-240 2 X(02)
Trailer Record:
Number of Records 001-006 6 9(06)
FILLER 000-000 000 X(234)
Field Names and Descriptions:
Field Name Description
---------- -----------
Master Servicer No. Hard code as "01" used internally
Unit Code Hard code as " " used internally
Loan Number Investor's loan number
Borrower Name Last name of borrower
Old Payment Amount P&I amount used for the applied payment
Old Loan Rate Gross interest rate used for the
applied payment
Servicer Fee Rate Servicer's fee rate
Servicer Ending Balance Ending actual balance after a payment
has been applied
Servicer Next Due Date Borrower's next due date for a payment
Curtailment Amount 1 - Before Amount of curtailment applied before
the payment
Curtailment Date 1 Date of curtailment should coincide
with the payment date applicable to the
curtailment
Curtailment Amount 1 - After Amount of curtailment applied after the
payment
Curtailment Amount 2 - Before Amount of curtailment applied before
the payment
Curtailment Date 2 Date of curtailment should coincide
with the payment date applicable to the
curtailment
Curtailment Amount 2 - After Amount of curtailment applied after the
payment
Curtailment Amount 3 - Before Amount of curtailment applied before
the payment
Curtailment Date 3 Date of curtailment should coincide
with the payment date applicable to the
curtailment
Curtailment Amount 3 - After Amount of curtailment applied after the
payment
New Payment Amount For ARM, Equal, or Buydown loans, when
a payment change occurs, this is the
scheduled payment
New Loan Rate For ARM loans, when the gross
interest rate change occurs, this is
the scheduled rate
Index Rate For ARM loans, the index rate used in
calculating the new gross interest rate
Remaining Term For ARM loans, the number of months
left on the loan used to determine the
new P&I amount
Liquidation Amount The payoff amount of the loan
Action Code For delinquent loans:
12 -- Relief Provisions
15 -- Bankruptcy/Litigation
20 -- Referred for Deed-in-lieu, short
sale
30 -- Referred to attorney to begin
foreclosure
60 -- Loan Paid in full
70 -- Real Estate Owned
Scheduled Principal Amount of principal from borrower
payment due to bondholder
Scheduled Interest Amount of interest from borrower
payment due to bondholder
Scheduled Ending Balance Ending scheduled balance of loan
FILLER Should be filled with spaces
Delinquency Reporting Data Fields to be
provided to Master Servicer
Servicer Loan #
Investor Loan #
Borrower Name
Address
State
Due Date
Action Code
FC Received
File Referred to Atty
NOD
Complaint Filed
Sale Published
Target Sale Date
Actual Sale Date
Loss Mit Approval Date
Loss Mit Type
Loss Mit Estimated Completion Date
Loss Mit Actual Completion Date
Loss Mit Broken Plan Date
BK Chapter
BK Filed Date
Post Petition Due
Motion for Relief
Lift of Stay
RFD
Occupant Code
Eviction Start Date
Eviction Completed Date
List Price
List Date
Accepted Offer Price
Accepted Offer Date
Estimated REO Closing Date
Actual REO Sale Date
XXXXX FARGO BANK MINNESOTA, N.A.
Form 332
------------------------------------------------------------------------------
Calculation of Realized Loss
----------------------------
Purpose
-------
To provide the Servicer with a form for the calculation of any Realized Loss
(or gain) as a result of a Mortgage Loan having been foreclosed and
Liquidated.
Distribution
------------
The Servicer will prepare the form in duplicate and send the original together
with evidence of conveyance of title and appropriate supporting documentation
to the Master Servicer with the Monthly Accounting Reports which supports the
Mortgage Loan's removal from the Mortgage Loan Activity Report. The Servicer
will retain the duplicate for its own records.
Due Date
--------
The form will be submitted to the Master Servicer no later than 30 days after
receipt of final liquidation proceeds and supporting documentation relating to
any liquidated Mortgage Loan.
Preparation Instructions
------------------------
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
2. The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made
as agreed.
3-7. Complete as necessary. All line entries must be supported by copies of
appropriate statements, vouchers, receipts, canceled checks, etc., to
document the expense. Entries not properly documented will not be
reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis.
10. The total of lines 1 through 9.
Credits
11-17. Complete as necessary. All line entries must be supported by copies
of the appropriate claims forms, statements, payment checks, etc. to
document the credit. If the Mortgage Loan is subject to a Bankruptcy
Deficiency, the difference between the Unpaid Principal Balance of
the Note prior to the Bankruptcy Deficiency and the Unpaid Principal
Balance as reduced by the Bankruptcy Deficiency should be input on
line 16.
18. The total of lines 11 through 17.
Total Realized Loss (or Amount of Any Gain)
19. The total derived from subtracting line 18 from 10. If the amount
represents a realized gain, show the amount in parenthesis ( ).
XXXXX FARGO BANK MINNESOTA, N.A.
CALCULATION OF REALIZED LOSS
---------------------------------------------------------------------------------------------------------------------------
XXXXX FARGO BANK MINNESOTA, N.A. Trust: ___________________________
Prepared by: __________________ Date: _______________
Phone: ______________________
---------------------------- -------------------------- -----------------------------
| Servicer Loan No. | | Servicer Name | | Servicer Address |
| | | | | |
| | | | | |
---------------------------- -------------------------- -----------------------------
XXXXX FARGO BANK MINNESOTA, N.A.
Loan No._____________________________
Borrower's Name:________________________________________________________
Property
Address:________________________________________________________________
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage Loan $ _______________(1)
Interest accrued at Net Rate ________________(2)
Attorney's Fees ________________(3)
Taxes ________________(4)
Property Maintenance ________________(5)
MI/Hazard Insurance Premiums ________________(6)
Hazard Loss Expenses ________________(7)
Accrued Servicing Fees ________________(8)
Other (itemize) ________________(9)
_________________________________________ $__________________
_________________________________________ __________________
_________________________________________ __________________
_________________________________________ __________________
Total Expenses $ ______________(10)
Credits:
Escrow Balance $ ______________(11)
HIP Refund ________________(12)
Rental Receipts ________________(13)
Hazard Loss Proceeds ________________(14)
Primary Mortgage Insurance Proceeds ________________(15)
Proceeds from Sale of Acquired Property ________________(16)
Other (itemize) ________________(17)
_________________________________________ ____________________
_________________________________________ ____________________
Total Credits $________________(18)
Total Realized Loss (or Amount of Gain) $________________(19)
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 20__
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of August 1, 2000
(the "Agreement"), we hereby authorize and request you to establish an
account, as a Custodial Account pursuant to Section 3.03 of the Agreement, to
be designated as "in trust for Xxxxx Fargo Bank Minnesota, National
Association, as Master Servicer for ARC 2000-BC3 Trust." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
AURORA LOAN SERVICES INC.
By:_______________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
________________________________
Depository
By:_____________________________
Name:
Title:
Date:
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 20__
To: ___________________________
___________________________
___________________________
(the "Depository")
As Servicer under the Servicing Agreement, dated as of August 1, 2000
(the "Agreement"), we hereby authorize and request you to establish an
account, as an Escrow Account pursuant to Section 3.05 of the Agreement, to be
designated as "in trust for Xxxxx Fargo Bank Minnesota, National Association,
as Master Servicer for ARC 2000-BC3 Trust." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. This
letter is submitted to you in duplicate. Please execute and return one
original to us.
AURORA LOAN SERVICES INC.
By:_______________________________________
Name:
Title:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number __________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
______________________________
Depository
By:___________________________
Name:
Title:
Date:
