EXECUTION
SERVICING AGREEMENT
THIS SERVICING AGREEMENT (this "Agreement"), entered into as of the 1st
day of March, 1998, by and between XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC., a Delaware corporation ("Xxxxxx Capital"), and AURORA
LOAN SERVICES INC., a Delaware corporation ("the Servicer"), recites and
provides as follows:
RECITALS
WHEREAS, Xxxxxx Capital has conveyed certain Mortgage Loans identified
on Schedule I hereto (the "Serviced Mortgage Loans") on a servicing-retained
basis to Structured Asset Securities Corporation ("SASCO"), 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 March 1, 1998 (the "Trust
Agreement"), among the Trustee, Norwest Bank Minnesota, National Association,
as master servicer ("Norwest," and, together with any successor Master
Servicer appointed pursuant to the provisions of the Trust Agreement, the
"Master Servicer") and SASCO.
WHEREAS, Xxxxxx Capital continues to own the servicing rights to the
Serviced Mortgage Loans, and may freely transfer such rights, subject to the
terms hereof.
WHEREAS, Xxxxxx Capital desires that the Servicer service the Serviced
Mortgage Loans, and the Servicer has agreed to do so, subject to the right of
Xxxxxx Capital to terminate the rights and obligations of the Servicer
hereunder at any time and to the other conditions set forth herein.
WHEREAS, Norwest and any successor Master Servicer shall be obligated,
among other things, to supervise the servicing of the Serviced 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.
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, Xxxxxx Capital and the Servicer
hereby agree as follows:
AGREEMENT
1. Definitions. Capitalized terms used and not defined in this
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Agreement, including Exhibit A hereto and any provisions of the Flow
Servicing Agreement dated as of September 1, 1997, between Xxxxxx Capital and
the Servicer (the "Flow Servicing Agreement") incorporated by reference
herein, shall have the meanings ascribed to such terms in the Trust
Agreement.
2. Servicing. The Servicer agrees, with respect to the Serviced
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Mortgage Loans, to perform and observe the duties, responsibilities and
obligations that are to be performed and observed under the provisions of the
Flow Servicing Agreement, except as otherwise provided herein and on Exhibit
A hereto, and that the provisions of the Flow Servicing Agreement, as so
modified, are and shall be a part of this Agreement to the same extent as if
set forth herein in full.
3. Master Servicing; Termination of Servicer. The Servicer, including
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any successor servicer hereunder, shall be subject to the supervision of the
Master Servicer, which Master Servicer shall be obligated to ensure that the
Servicer services the Serviced Mortgage Loans in accordance with the
provisions of this Agreement. The Master Servicer, acting on behalf of the
Trustee pursuant to the Trust Agreement, shall have the same rights as the
"Owner" (as defined in the Flow Servicing Agreement) to enforce the
obligations of the Servicer under the Flow Servicing Agreement. The Master
Servicer shall be entitled to terminate the rights and obligations of the
Servicer under this Agreement upon the failure of the Servicer to perform any
of its obligations under this Agreement, as provided in Article IX of the
Flow Servicing Agreement.
In addition, in the event that Xxxxxx Capital transfers the servicing
rights in respect of the Serviced Mortgage Loans to one or more successor
servicers, the rights and obligations of the Servicer under this Agreement
shall terminate, at the sole option of Xxxxxx Capital, without cause, upon
thirty days written notice to the Servicer, and each successor servicer shall
succeed to the rights and obligations of the Servicer under this Agreement as
of such date. Upon such termination the terminated Servicer shall not be
entitled to the Servicing Fee or any portion thereof, or, except as provided
in the Flow Servicing Agreement, to any other amounts in respect of the
Serviced Mortgage Loans.
The Servicer agrees that, notwithstanding anything to the contrary in
the Flow Servicing Agreement, Xxxxxx Capital is the sole owner of the
servicing rights relating to the Serviced Mortgaged Loans, and the Servicer
shall have no right to transfer the servicing thereof.
4. No Representations. Neither the Servicer nor the Master Servicer
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shall be obligated or required to make any representations and warranties
regarding the Serviced Mortgage Loans in connection with the transactions
contemplated by the Trust Agreement and issuance of the certificates issued
pursuant thereto.
5. Notices. All notices and communications between or among the
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parties hereto shall be in writing and shall be deemed received or given when
mailed first-class mail, postage prepaid, addressed to each other party at
its address specified below. Each party may designate to the other parties
in writing, from time to time, other addresses to which notices and
communications hereunder shall be sent.
6. Governing Law. THIS SERVICING AGREEMENT SHALL BE GOVERNED BY, AND
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CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
NOTWITHSTANDING NEW YORK OR OTHER CHOICE OF LAW RULES TO THE CONTRARY.
7. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed shall be deemed to be an
original, but all of which counterparts shall together constitute but one and
the same instrument.
8. Reconstitution. Xxxxxx Capital and the Servicer agree that this
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Agreement is a Reconstitution Agreement, and that the date hereof is the
Reconstitution Date, each as defined in the Flow Servicing Agreement.
9. Notices and Remittances to the Master Servicer. All notices
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required to be delivered to the Owner or the Master Servicer under this
Agreement shall be delivered to the Master Servicer at the following address:
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Master Servicing Department, SASCO 1998-3
All remittances required to be made to the Master Servicer under this
Agreement shall be made to the following wire account:
Norwest Bank Minnesota, National Association
Minneapolis, Minnesota
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 0000000000
For further credit to: 13415500, SASCO 1998-3
10. Errors and Omissions Insurance. The Servicer shall keep in force
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during the term of this Agreement a fidelity bond and a policy or policies of
insurance covering errors and omissions in the performance of the Servicer's
obligations under this Agreement. Such fidelity bond and policy pr policies
shall be maintained with recognized insurers and shall be in such form and
amount as would permit the Servicer to be qualified as a FNMA or FHLMC
seller-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 (i) the Master Servicer so requests and (ii) the Servicer is not an
affiliate of Xxxxxx Brothers Inc. at the time of such request.
11. Annual Audit Report. On or before April 30 of each year, beginning
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with April 30, 1999, Servicer shall 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
a statement to Owner, Directing Holder and Master Servicer, 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.
12. Annual Officer's Certificate. On or before April 30 of each year,
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beginning with April 30, 1999, the Servicer, at its own expense, will deliver
to the Owner, Directing Holder and Master Servicer 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.
Executed as of the day and year first above written.
XXXXXX CAPITAL, A DIVISION OF
XXXXXX BROTHERS HOLDINGS INC.
By:
---------------------------------
Name:
Title:
AURORA LOAN SERVICES INC.
By:
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Name:
Title:
EXHIBIT A
Modifications to the Flow Servicing Agreement
I. The following is hereby added immediately following the words
"incidental fees and charges" in the definition of "Ancillary Income" in
Article I: ", but not including any premium or penalty associated with
a prepayment of principal of a Mortgage Loan."
II. The definition of "Custodial Agreement" in Article I is hereby deleted
and replaced with the following:
"The custodial agreement relating to custody of the Serviced Mortgage
Loans between First Trust National Association, as Custodian, and First
Union National Bank, as Trustee, dated as of March 1, 1998."
III. The following definition is hereby added:
"Prepayment Period: With respect to the first Remittance Date, the
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period beginning on the Cut-off Date and ending on April 1. With respect to
each subsequent Remittance Date, the period commencing on the second day of
the month immediately preceding the month in which such Remittance Date
occurs and ending on the first day of the month in which such Remittance Date
occurs."
IV. The definition of "Monthly Advance" in Article I is hereby amended by
adding at the end of such definition the following: ", 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."
V. The definition of "Qualified Depository" in Article I is hereby deleted
and replaced with the following:
"Any of (i) a depository the accounts of which are insured by the FDIC
and the debt obligations of which are rated AA or better by Fitch and
S&P; (ii) the corporate trust department of any bank the debt
obligations of which are rated at least A-1 or its equivalent by each of
Fitch and S&P; or (iii) the Servicer, unless the Master Servicer is
notified by either Fitch or S&P that the designation of the Servicer as
a Qualified Depository will result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Certificates."
VI. The definition of "Remittance Date" in Article I is hereby deleted and
replaced with the following:
"The 18th day (or if such 18th day is not a Business Day, the first
Business Day immediately following) of any month, following the First
Remittance Date."
VII. The definition of "Servicing Advance" in Article I is hereby amended by
adding, immediately after the phrase "but not limited to, the cost of",
the following: "transfer of servicing of Distressed Mortgage Loans to
the Special Servicer pursuant to Section 9.02, and".
VIII. The first sentence of the definition of "Servicing Fee" in Article
I is hereby deleted and replaced with the following: "The
servicing fee shall be an amount equal to one-twelfth the product
of (a) a rate per annum equal to 0.50% and (b) the outstanding
principal balance of such Mortgage Loan. The obligation of the
Master Servicer 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."
IX. The fourth and fifth paragraphs of Section 3.01 are hereby deleted and
replaced with the following paragraph:
"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 obligor 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
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 Master Servicer, 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 Master
Servicer 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 Master Servicer, 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 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."
X. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.,
owner of residential Mortgage Loans, Group No. 1997-ALSI, and various
Mortgagors" in the first paragraph of Section 3.03 are hereby deleted
and replaced with the following: "Norwest Bank Minnesota, National
Association, as master servicer for SASCO 1998-3."
XI. Section 3.03 is further amended by deleting the word "and" at the end of
clause (viii), replacing the period at the end of clause (ix) with ";
and", and adding the following immediately after clause (ix):
"(x) any principal prepayment penalties received in connection with
the Mortgage Loans."
XII. Section 3.04 is amended by deleting the word "and" at the end of clause
(v), replacing the period at the end of clause (vi) with "; and", and
adding the following immediately following clauses (vii) and (viii):
"(vii) to reimburse itself for Monthly Advances of the Servicer's
funds made pursuant to Section 7.03, 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;
(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 Purchaser;"
XIII. The words "Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., owner of residential Mortgage Loans, Group No. 1997-ALSI, and
various Mortgagors" in the first paragraph of Section 3.05 are
hereby deleted and replaced with the following: "Norwest Bank
Minnesota, National Association, as master servicer for SASCO 1998-
3."
XIV. All references in Section 3.11 to the disposition of REO Properties
within a two year period are hereby deleted and replaced with a three
year period.
XV. The first paragraph of Section 4.01 is hereby deleted and replaced with
the following:
"On each Remittance Date the Servicer shall remit 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 amounts, if any, which the Servicer is obligated to distribute
pursuant to Section 7.03, minus (c) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds or REO Disposition Proceeds received after the
applicable Prepayment 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 7.03, and minus (d)
any amounts attributable to Monthly Payments collected but due on a due
date or dates subsequent to the first day of the month in which such
Remittance Date occurs, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts."
XVI. Section 4.02 is hereby amended by deleting the words "Remittance Date"
in the first line of such Section, and substituting the following:
"tenth Business Day of each month"
XVII. The third paragraph of Section 5.01 is hereby deleted.
XVIII. The following paragraph is hereby added at the end of Section 9.02:
"On the second Business Day of each month, the Servicer shall
orally inform the Master Servicer and the Special Servicer as to which
Mortgage Loans have become delinquent for a period of 61 days or more,
without giving effect to any grace period permitted by the related
Mortgage Note (each, a "Distressed Mortgage Loan"). No Mortgage Loan
shall be considered to be delinquent for such purpose by virtue of the
related Mortgagor having made payment to a prior servicer. Any such
Mortgage Loan as to which all past due payments are made prior to the
Notice Date shall not be considered to be a Distressed Mortgage Loan,
and the servicing thereof shall not be transferred as provided below.
On the fourth Business Day of each month (the "Notice Date"), the
Servicer shall send by facsimile a written listing of the Distressed
Mortgage Loans to the Master Servicer, the Trustee and the Custodian,
and shall mail to the Mortgagor of each Mortgage Loan listed in a
Transfer Notice a letter advising each such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Special Servicer, in
accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of
1990; provided, however, the content and format of such letter shall
have the prior approval of the Special Servicer. The Servicer shall
promptly provide the Special Servicer with copies of all such notices.
The transfer of servicing with respect to each such Mortgage Loan to the
Special Servicer shall be effected by the Servicer not later than
fifteenth day following the applicable Notice Date (the "Transfer
Date"). By the Business Day immediately following each Notice Date, the
Servicer shall provide the Master Servicer, the Special Servicer, the
Trustee and the Custodian with a certification (the "Transfer Notice")
listing the Distressed Mortgage Loans.
At least five Business Days prior to the Transfer Date, the
Servicer shall deliver, with respect to the Distressed Mortgage Loans
listed on the related Transfer Notice, to the Special Servicer all
Servicing Files, and to the Special Servicer and the Master Servicer a
preliminary loan level tape or other electronic media (a "Report") in
form reasonably acceptable to the Servicer, the Master Servicer and the
Special Servicer. Within two Business Days following such Transfer
Date, the Servicer shall deliver such Report in final form reasonably
acceptable to the Master Servicer and the Special Servicer, and
commensurate with generally acceptable industry standards, detailing the
amount of any unreimbursed Monthly Advances, Servicing Advances and
accrued and unpaid Servicing Fees on a loan level basis. Should the
Master Servicer or the Special Servicer desire a loan level tape or
other electronic media containing information which is not readily
extractable from the Servicer's servicing system, the Servicer shall
diligently cooperate to make such loan level data available to the
Master Servicer and Special Servicer. In addition, at least five
Business Days prior to the Transfer Date, the Servicer shall transfer to
the Special Servicer any funds held in an Escrow Account or Custodial
Account relating to the Distressed Mortgage Loans listed in the related
Transfer Notice. Upon the successful completion of the transfer of
servicing for Distressed Mortgage Loans, the Special Servicer will
reimburse the Servicer for any unreimbursed Monthly Advances, Servicing
Advances and accrued and unpaid Servicing Fees with respect to such
Distressed Mortgage Loans which have been properly documented. The
Servicer shall be paid, from the Custodial Account, a termination fee of
$25.00 for each Distressed Mortgage Loan transferred to the Special
Servicer.
In connection with the transfer of any Distressed Mortgage Loan,
(i) the Servicer will be responsible for servicing the Distressed
Mortgage Loan until the effective date of transfer of servicing to the
Special Servicer, but shall have no right or obligation to service such
Distressed Mortgage Loan from and after the effective date of the
transfer of servicing to the Special Servicer, (ii) notwithstanding
clause (i) above, the Servicer shall include the Distressed Mortgage
Loan in its monthly remittance report pursuant to Section 4.02 for the
month in which such transfer is effected and shall be obligated, subject
to Section 7.03, to make the Monthly Advance with respect to such
Distressed Mortgage Loan on the Remittance Date in the month in which
such transfer is effected, in each case, regardless of whether the
Remittance Date occurs before or after the effective date of such
transfer, (iii) the amount of Monthly Advances to be reimbursed to the
Servicer by the Special Servicer hereunder shall include the Monthly
Advance described in clause (ii) above regardless of whether the
Servicer makes such Monthly Advance before or after the effective date
of such transfer, (iv) the Servicer shall, no later than the end of the
month in which such transfer is effected, provide to the Special
Servicer loan level information (in the loan level tape or other
electronic media or other agreed-upon form) regarding the Distressed
Mortgage Loan during the month of such transfer as may be necessary to
enable the Special Servicer to provide such information in its
remittance report for the next following month, and (v) the Servicer
shall not be entitled to the Servicing Fee with regard to any such
Distressed Mortgage Loan for the month in which such transfer occurs."
XIX. The following paragraph is added at the end of Section 10.01:
"Neither the Master Servicer nor any successor servicer (including
the Owner and the Master Servicer) shall be liable for any acts or
omissions of the Servicer or any predecessor servicer. In particular,
neither the Master Servicer nor any successor servicer (including the
Owner and the Master Servicer) shall be liable for any servicing errors
or interruptions resulting from any failure of the Servicer to maintain
computer and other information systems that are year-2000 compliant."
XX. The following words are hereby added after the words "Attention: Xxxx
Xxxxx" in Section 10.06(ii):
"with a copy to:
Aurora Loan Services Inc.
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx Xxxxxxxx"
