Exhibit 99.7
Execution Copy
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
among
XXXXXXX XXXXX MORTGAGE COMPANY,
as Assignor
GS MORTGAGE SECURITIES CORP.,
as Assignee
and
NATIONAL CITY MORTGAGE CO.
as Servicer
Dated as of
February 24, 2006
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ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "Assignment
Agreement") made this 24th day of February, 2006, among National City Mortgage
Co., (the "Servicer"), GS Mortgage Securities Corp., as assignee (the
"Assignee") and Xxxxxxx Sachs Mortgage Company, as assignor (the "Assignor").
WHEREAS, the Assignor and the Servicer have entered into the Second
Amended and Restated Flow Seller's Warranties and Servicing Agreement, dated
as of January 1, 2006 (as amended, the "Servicing Agreement") pursuant to
which the Servicer sold certain mortgage loans listed on the mortgage loan
schedule attached as an exhibit to the Servicing Agreement;
WHEREAS, the Assignee has agreed on certain terms and conditions to
purchase from the Assignor certain of the mortgage loans (the "Mortgage
Loans"), which are subject to the provisions of the Servicing Agreement and
are listed on the mortgage loan schedule attached as Exhibit 1 hereto (the
"Mortgage Loan Schedule"); and
WHEREAS, pursuant to a Master Servicing and Trust Agreement, dated
as of February 1, 2006 (the "Trust Agreement"), among GS Mortgage Securities
Corp., as depositor, U.S. Bank National Association, as trustee (the
"Trustee") and as a custodian, Deutsche Bank National Trust Company, as a
custodian and JPMorgan Chase Bank, National Assocation, as master servicer (in
such capacity, the "Master Servicer"), securities administrator and a
custodian, the Assignee will transfer the Mortgage Loans to the Trustee,
together with the Assignee's rights under the Servicing Agreement, to the
extent relating to the Mortgage Loans (other than the rights of the Assignor
(and if applicable its affiliates, officers, directors and agents) to
indemnification thereunder).
NOW THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption. (a) The Assignor hereby assigns to the
Assignee all of its right, title and interest in and to the Mortgage Loans and
the Servicing Agreement, to the extent relating to the Mortgage Loans (other
than the rights of the Assignor (and if applicable its affiliates, officers,
directors and agents) to indemnification thereunder) from and after the date
hereof, and the Assignee hereby assumes all of the Assignor's obligations
under the Servicing Agreement, to the extent relating to the Mortgage Loans,
from and after the date hereof. The Servicer hereby acknowledges such
assignment and assumption and hereby agrees to the release of the Assignor
from any obligations under the Servicing Agreement from and after the date
hereof, to the extent relating to the Mortgage Loans.
(b) The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber the
Assignor's ownership interest in the Mortgage Loans since the date of the
Servicing Agreement.
(c) The Servicer and the Assignor shall have the right to amend,
modify or terminate the Servicing Agreement without the joinder of the
Assignee with respect to mortgage
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loans not conveyed to the Assignee hereunder; provided, however, that such
amendment, modification or termination shall not affect or be binding on the
Assignee.
2. Modification of the Servicing Agreement. Only in so far as it
relates to the Mortgage Loans, the Servicer and the Assignor hereby amend the
Servicing Agreement as follows:
(a) Section 4.17, paragraph three, shall be amended by deleting "."
at the end of such paragraph 3, and replacing it with the following language:
", and provided further, that if the Company is unable to sell such
REO Property within three years of acquisition, the Company shall obtain an
extension from the Internal Revenue Service."
(b) Section 8.1 shall be deleted in its entirety and be replaced
with the following:
"The Company shall indemnify the Purchaser and the applicable master
servicer and hold it harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that the Purchaser or
master servicer may sustain in any way related to the failure of the Company
to perform its duties and service the Mortgage Loans in strict compliance with
the terms of this Agreement. The Company immediately shall notify the
Purchaser or master servicer, as applicable, if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
prior written consent of the Purchaser or master servicer as applicable) the
defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment
or decree which may be entered against it or the Purchaser or master servicer,
as applicable, in respect of such claim. The Company shall follow any written
instructions received from the Purchaser or master servicer, as applicable, in
connection with such claim. The Purchaser or master servicer, as applicable,
promptly shall reimburse the Company for all costs, fees or expenses advanced
by it pursuant to this paragraph except when the claim in any way results
from, relates to or arises out of any liability, obligation, act or omission
of the Company, including without limitation, the Company's indemnification
obligation under Section 3.3 and this Section 8.1, any repurchase obligation
of the Company hereunder including Sections 2.3, 3.3 and 6.2, or the failure
of the Company to service and administer the Mortgage Loans and otherwise
perform its obligations hereunder in strict compliance with the terms of this
Agreement."
(c) Section 9.1(c) shall be amended by adding the following:
"which shall include, for so long as the Mortgage Loans are being
master serviced by a master servicer in a securitization transaction, by March
15th of each year (or if March 15th is not a Business Day, the immediately
preceding Business Day), or at any other time upon thirty (30) days written
request, an officer of the Servicer shall execute and deliver an Officer's
Certificate to the master servicer, the trustee and the depositor for the
benefit of such party, and such party's officers, directors and affiliates,
substantially in the form attached hereto as Exhibit K;"
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(d) Section 11.3 shall be amended by deleting the words "upon ten
(10) Business Days' prior" from the first sentence of the first paragraph of
such Section.
(e) The third paragraph of Section 12.1 shall be deleted in its
entirety and replaced with the following:
"The Company shall deliver to the successor servicer the funds in
the Custodial Account and Escrow Account and shall account for all funds and
shall execute and deliver such instruments and do such other things as may
reasonably be required to more fully and definitively vest in the successor
all such rights, powers, duties, responsibilities, obligations and liabilities
of the Company with respect to such accounts within two Business Days after
receiving notice of the appointment of such successor servicer. The Company
shall deliver promptly to the successor servicer all Mortgage Files and
related documents and statements held by it hereunder and shall execute and
deliver such instruments and do such other things as may reasonably be
required to more fully and definitively vest in the successor all such rights,
powers, duties, responsibilities, obligations and liabilities of the Company
within thirty calendar days after receiving notice of the appointment of such
successor servicer."
(f) a new section, Section 12.12, will be added immediately
following Section 12.11 which shall read as follows:
"Section 12.12 Third Party Beneficiary.
JPMorgan Chase Bank, N.A. as master servicer and securities
administrator under the Master Servicing and Trust Agreement, dated as of
February 1, 2006, among GS Mortgage Securities Corp., U.S. Bank National
Association, Deutsche Bank National Trust Company and JPMorgan Chase Bank,
N.A., shall be considered a third party beneficiary to this Agreement entitled
to all of the rights and benefits accruing to it as if it were a direct party
to this Agreement."
3. Accuracy of Servicing Agreement. The Servicer and the Assignor
represent and warrant to the Assignee that (i) attached hereto as Exhibit 2 is
a true, accurate and complete copy of the Servicing Agreement, (ii) the
Servicing Agreement is in full force and effect as of the date hereof, (iii)
except as provided in Section 2 above, the Servicing Agreement has not been
amended or modified in any respect and (iv) no notice of termination has been
given to the Servicer under the Servicing Agreement. The Servicer, in its
capacity as seller and/or servicer under the Servicing Agreement, further
represents and warrants that the representations and warranties contained in
Section 3.1 of the Servicing Agreement are true and correct as of the Closing
Date (as such term is defined in the Servicing Agreement).
4. Recognition of Assignee. From and after the date hereof, the
Servicer shall note the transfer of the Mortgage Loans to the Assignee in its
books and records, shall recognize the Assignee as the owner of the Mortgage
Loans and, notwithstanding anything herein to the contrary, shall service all
of the Mortgage Loans for the benefit of the Assignee pursuant to the
Servicing Agreement the terms of which are incorporated herein by reference.
It is the intention of the Assignor, Servicer and Assignee that the Servicing
Agreement shall be
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binding upon and inure to the benefit of the Servicer and
the Assignee and their successors and assigns.
5. Representations and Warranties of the Assignee. The Assignee
hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and warrants that
it is a sophisticated investor able to evaluate the risks and merits of the
transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor or the
Servicer other than those contained in the Servicing Agreement or this
Assignment Agreement.
(b) Authority. The Assignee hereto represents and warrants that it
is duly and legally authorized to enter into this Assignment Agreement and to
perform its obligations hereunder and under the Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and warrants that
this Assignment Agreement has been duly authorized, executed and delivered by
it and (assuming due authorization, execution and delivery thereof by each of
the other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
6. Representations and Warranties of the Assignor. The Assignor
hereby represents and warrants to the Assignee as follows:
(a) Organization. The Assignor has been duly organized and is
validly existing as a limited partnership in good standing under the laws of
the State of New York with full power and authority (corporate and other) to
enter into and perform its obligations under the Servicing Agreement and this
Assignment Agreement.
(b) Enforceability. This Assignment Agreement has been duly executed
and delivered by the Assignor, and, assuming due authorization, execution and
delivery by each of the other parties hereto, constitutes a legal, valid, and
binding agreement of the Assignor, enforceable against it in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law.
(c) No Consent. The execution, delivery and performance by the
Assignor of this Assignment Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date hereof.
(d) Authorization; No Breach. The execution and delivery of this
Assignment Agreement have been duly authorized by all necessary corporate
action on the part of the
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Assignor; neither the execution and delivery by the Assignor of this
Assignment Agreement, nor the consummation by the Assignor of the transactions
herein contemplated, nor compliance by the Assignor with the provisions
hereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of the governing documents of the Assignor or any
law, governmental rule or regulation or any material judgment, decree or order
binding on the Assignor or any of its properties, or any of the provisions of
any material indenture, mortgage, deed of trust, contract or other instrument
to which the Assignor is a party or by which it is bound.
(e) Actions; Proceedings. There are no actions, suits or proceedings
pending or, to the knowledge of the Assignor, threatened, before or by any
court, administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Assignment Agreement or (B)
with respect to any other matter that in the judgment of the Assignor will be
determined adversely to the Assignor and will, if determined adversely to the
Assignor, materially adversely affect its ability to perform its obligations
under this Assignment Agreement.
7. Additional Representations and Warranties of the Assignor With
Respect to the Mortgage Loans. The Assignor hereby represents and warrants to
the Assignee as follows:
(a) Prior Assignments; Pledges. Except for the sale to the Assignee,
the Assignor has not assigned or pledged any Mortgage Note or the related
Mortgage or any interest or participation therein.
(b) Releases. The Assignor has not satisfied, canceled or
subordinated in whole or in part, or rescinded any Mortgage, and the Assignor
has not released the related Mortgaged Property from the lien of any Mortgage,
in whole or in part, nor has the Assignor executed an instrument that would
effect any such release, cancellation, subordination, or rescission. The
Assignor has not released any Mortgagor, in whole or in part, except in
connection with an assumption agreement or other agreement approved by the
related federal insurer, to the extent such approval was required.
(c) Compliance with Applicable Laws. With respect to each Mortgage
Loan, any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, predatory
and abusive lending or disclosure laws applicable to such Mortgage Loan,
including without limitation, any provisions relating to prepayment charges,
have been complied with.
(d) High Cost. No Mortgage Loan is categorized as "High Cost"
pursuant to the then-current Standard & Poor's Glossary for File Format for
LEVELS(R) Version 5.6(c), Appendix E, as revised from time to time and in
effect as of the Original Purchase Date. Furthermore, none of the Mortgage
Loans sold by the Seller are classified as (a) a "high cost mortgage" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost
home," "covered," "high-cost," "high-risk home," or "predatory" loan under any
other applicable state, federal or local law.
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(e) Georgia Fair Lending Act. No Mortgage Loan is secured by a
property in the state of Georgia and originated between October 1, 2002 and
March 7, 2003.
(f) Credit Reporting. The Assignor will fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (i.e., favorable and unfavorable) on Mortgagor credit
files to Equifax, Experian and Trans Union Credit Information Company (three
of the credit repositories), on a monthly basis.
(g) Arbitration. With respect to any Mortgage Loan originated on or
after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to any of the transactions contemplated
by this Assignment Agreement.
(h) Bring Down. To the Assignor's knowledge, with respect to each
Mortgage Loan, no event has occurred from and after the closing date set forth
in such Servicing Agreement to the date hereof that would cause any of the
representations and warranties relating to such Mortgage Loan set forth in
Section 3.2 of the Servicing Agreement to be untrue in any material respect as
of the date hereof as if made on the date hereof. With respect to those
representations and warranties which are made to the best of the Assignor's
knowledge, if it is discovered by the Assignor that the substance of such
representation and warranty is inaccurate, notwithstanding the Assignor's lack
of knowledge with respect to the substance of such representation and
warranty, such inaccuracy shall be deemed a breach of the applicable
representation and warranty.
It is understood and agreed that the representations and warranties
set forth in Sections 6 and 7 shall survive delivery of the respective
mortgage loan documents to the Assignee or its designee and shall inure to the
benefit of the Assignee and its assigns notwithstanding any restrictive or
qualified endorsement or assignment. Upon the discovery by the Assignor or the
Assignee and its assigns of a breach of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other parties to this Assignment Agreement, and in no event later than
two (2) Business Days from the date of such discovery. It is understood and
agreed that the obligations of the Assignor set forth in Section 8 to
repurchase or, in limited circumstances, substitute a Mortgage Loan constitute
the sole remedies available to the Assignee and its assigns on their behalf
respecting a breach of the representations and warranties contained in
Sections 6 and 7. It is further understood and agreed that, except as
specifically set forth in Sections 6 and 7, the Assignor shall be deemed not
to have made the representations and warranties in Section 7(h) with respect
to, and to the extent of, representations and warranties made, as to the
matters covered in Section 7(h), by the Servicer in the Servicing Agreement
(or any officer's certificate delivered pursuant thereto).
It is understood and agreed that, with respect to the Mortgage
Loans, the Assignor has made no representations or warranties to the Assignee
other than those contained in Sections 6 and 7 and no other affiliate of the
Assignor has made any representations or warranties of any kind to the
Assignee.
8. Repurchase of Mortgage Loans. Upon discovery or notice of any
breach by the Assignor of any representation, warranty or covenant under this
Assignment Agreement
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that materially and adversely affects the value of any Mortgage Loan or the
interest of the Assignee therein (it being understood that any such defect or
breach shall be deemed to have materially and adversely affected the value of
the related Mortgage Loan or the interest of the Assignee therein if the
Assignee incurs a loss as a result of such defect or breach), the Assignee
promptly shall request that the Assignor cure such breach and, if the Assignor
does not cure such breach in all material respects within 60 days from the
date on which it is notified of the breach, the Assignee may enforce the
Assignor's obligation hereunder to purchase such Mortgage Loan from the
Assignee at the Repurchase Price as defined in the Servicing Agreement or, in
limited circumstances (as set forth below), substitute such mortgage loan for
a Substitute Mortgage Loan (as defined below). Notwithstanding the foregoing,
however, if such breach is a Qualification Defect as defined in the Servicing
Agreement, such cure or repurchase must take place within 75 days of discovery
of such Qualification Defect.
The Assignor shall have the option, but is not obligated, to
substitute a Substitute Mortgage Loan for a Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, by removing such Mortgage Loan
and substituting in its place a Substitute Mortgage Loan or Loans and
providing the Substitution Adjustment Amount, provided that any such
substitution shall be effected not later than 90 days from the date on which
it is notified of the breach.
In the event the Servicer has breached a representation or warranty
under the Servicing Agreement that is substantially identical to, or covers
the same matters as, a representation or warranty breached by the Assignor
hereunder, the Assignee shall first proceed against the Servicer to cure such
breach or purchase such mortgage loan from the Trust. If the Servicer does not
within 90 days after notification of the breach, take steps to cure such
breach (which may include certifying to progress made and requesting an
extension of the time to cure such breach, as permitted under the Servicing
Agreement) or purchase the Mortgage Loan, the Trustee shall be entitled to
enforce the obligations of the Assignor hereunder to cure such breach or to
purchase or substitute for the Mortgage Loan from the Trust.
In addition, the Assignor shall have the option, but is not
obligated, to substitute a Substitute Mortgage Loan for a Mortgage Loan with
respect to which the Servicer has breached a representation and warranty and
is obligated to repurchase such Mortgage Loan under the Servicing Agreement,
by removing such Mortgage Loan and substituting in its place a Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than 90 days from the date on which it is notified of the breach.
In the event of any repurchase or substitution of any Mortgage Loan
by the Assignor hereunder, the Assignor shall succeed to the rights of the
Assignee to enforce the obligations of the Servicer to cure any breach or
repurchase such Mortgage Loan under the terms of the Servicing Agreement with
respect to such Mortgage Loan. In the event of a repurchase or substitution of
any Mortgage Loan by the Assignor, the Assignee shall promptly deliver to the
Assignor or its designee the related Mortgage File and shall assign to the
Assignor all of the Assignee's rights under the Servicing Agreement, but only
insofar as such Servicing Agreement relates to such Mortgage Loan.
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Except as specifically set forth herein, the Assignee shall have no
responsibility to enforce any provision of this Assignment Agreement, to
oversee compliance hereof or to take notice of any breach or default thereof.
For purposes of this Section, "Deleted Mortgage Loan" and
"Substitute Mortgage Loan" shall be defined as set forth below.
"Deleted Mortgage Loan" A Mortgage Loan which is to be, pursuant to
this Section 8, replaced or to be replaced by the Assignor with a Substitute
Mortgage Loan.
"Substitute Mortgage Loan" A mortgage loan substituted by the
Assignor for a Deleted Mortgage Loan which must, on the date of such
substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than
and not more than 2% per annum higher than that of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than and not more than one
year less than that of the Deleted Mortgage Loan; (iv) be of the same type as
the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same
periodic rate cap, lifetime rate cap, and index); and (v) comply with each
representation and warranty set forth in Section 3.2 of the Servicing
Agreement.
"Substitution Adjustment Amount" means with respect to any Mortgage
Loan, the amount remitted by GSMC on the applicable Distribution Date which is
the difference between the outstanding principal balance of a Substitute
Mortgage Loan as of the date of substitution and the outstanding principal
balance of the Deleted Mortgage Loan as of the date of substitution.
9. Continuing Effect. Except as contemplated hereby, the Servicing
Agreement shall remain in full force and effect in accordance with their
respective terms.
10. Governing Law.
THIS ASSIGNMENT AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF).
EACH PARTY HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
ASSIGNMENT AGREEMENT, OR ANY OTHER DOCUMENTS AND INSTRUMENTS EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF SUCH PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS ASSIGNMENT AGREEMENT.
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11. Notices. Any notices or other communications permitted or
required hereunder or under the Servicing Agreement shall be in writing and
shall be deemed conclusively to have been given if personally delivered at or
mailed by registered mail, postage prepaid, and return receipt requested or
transmitted by telex, telegraph or telecopier and confirmed by a similar
mailed writing, to:
(a) in the case of the Servicer,
National City Mortgage Co.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx Xxxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Servicer;
(b) in the case of the Assignee,
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignee, and
(c) in the case of the Assignor,
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished by the Assignor.
12. Counterparts. This Assignment Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
13. Definitions. Any capitalized term used but not defined in this
Assignment Agreement has the meaning assigned thereto in the Servicing
Agreement.
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14. Third Party Beneficiary. The parties agree that the Trustee is
intended to be, and shall have the rights of, a third party beneficiary of
this Assignment Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement the day and year first above written.
XXXXXXX XXXXX MORTGAGE
COMPANY
By: Xxxxxxx Sachs Real Estate Funding
Corp., its General Partner
By:/s/ Xxxxxxxx Xxxx
-----------------
Name: Xxxxxxxx Xxxx
Title: Vice President
GS MORTGAGE SECURITIES CORP.
By:/s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: Vice President
NATIONAL CITY MORTGAGE CO.
By:/s/ Xxxx Xxxx Xxxxxxxx
----------------------
` Name: Xxxx Xxxx Xxxxxxxx
Title: Vice President
NatCity Step 1 AAR
EXHIBIT 1
Mortgage Loan Schedule
----------------------
[On File with the Securities Administrator as provided by the Depositor]
1-1
EXHIBIT 2
Servicing Agreement
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[See Attached]
2-1
Execution Copy
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
and
NATIONAL CITY MORTGAGE CO.
Company
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SECOND AMENDED AND RESTATED
FLOW SELLER'S WARRANTIES AND SERVICING AGREEMENT
Dated as of January 1, 2006
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Adjustable Rate Pools
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS...................................................1
Section 1.1. Definitions.............................................1
ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF
MORTGAGE FILES; BOOKS AND RECORDS; DELIVERY OF
DOCUMENTS....................................................11
Section 2.1. Conveyance of Mortgage Loans; Possession of
Mortgage Files; Maintenance of Servicing
Files..................................................11
Section 2.2. Books and Records; Transfers of Mortgage
Loans..................................................13
Section 2.3. Delivery of Documents..................................14
Section 2.4. Mortgage Schedule......................................16
Section 2.5. Examination of Mortgage Files..........................16
Section 2.6. Representations, Warranties and Agreements
of the Company.........................................16
Section 2.7. Representation, Warranties and Agreement of
Purchaser..............................................17
Section 2.8. Closing................................................18
Section 2.9. Closing Documents......................................19
ARTICLE III. REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH...........19
Section 3.1. Company Representations and Warranties.................19
Section 3.2. Representations and Warranties Regarding
Individual Mortgage Loans..............................21
Section 3.3. Repurchase.............................................33
ARTICLE IV. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............35
Section 4.1. Company to Act as Servicer.............................35
Section 4.2. Liquidation of Mortgage Loans..........................36
Section 4.3. Collection of Mortgage Loan Payments...................37
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Section 4.4. Establishment of and Deposits to Custodial
Account................................................37
Section 4.5. Permitted Withdrawals From Custodial Account...........39
Section 4.6. Establishment of and Deposits to Escrow
Account................................................40
Section 4.7. Permitted Withdrawals From Escrow Account..............41
Section 4.8. Payment of Taxes, Insurance and Other
Charges................................................42
Section 4.9. Protection of Accounts.................................42
Section 4.10. Maintenance of Hazard Insurance........................42
Section 4.11. Maintenance of Primary Mortgage Insurance
Policy; Claims.........................................43
Section 4.12. Maintenance of Mortgage Impairment Insurance...........44
Section 4.13. Maintenance of Fidelity Bond and Errors and
Omissions Insurance....................................45
Section 4.14. Inspections............................................45
Section 4.15. Restoration of Mortgaged Property......................45
Section 4.16. Claims.................................................46
Section 4.17. Title, Management and Disposition of REO
Property...............................................46
Section 4.18. Real Estate Owned Reports..............................47
Section 4.19. Liquidation Reports....................................47
Section 4.20. Reports of Foreclosures and Abandonments of
Mortgaged Property.....................................48
Section 4.21. Fair Credit Reporting Act..............................48
ARTICLE V. PAYMENTS TO PURCHASER........................................48
Section 5.1. Remittances............................................48
Section 5.2. Statements to Purchaser................................49
Section 5.3. Monthly Advances by Company............................49
ARTICLE VI. GENERAL SERVICING PROCEDURES.................................50
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Section 6.1. Transfers of Mortgaged Property........................50
Section 6.2. Satisfaction of Mortgages and Release of
Mortgage Files.........................................50
Section 6.3. Servicing Compensation.................................51
Section 6.4. Annual Statement as to Compliance......................51
Section 6.5. Annual Independent Public Accountants'
Servicing Report.......................................51
Section 6.6. Right to Examine Company Records.......................52
Section 6.7. Compliance with REMIC Provisions.......................52
ARTICLE VII. COMPANY TO COOPERATE.........................................52
Section 7.1. Provision of Information...............................52
Section 7.2. Financial Statements; Servicing Facility...............52
ARTICLE VIII. THE COMPANY..................................................53
Section 8.1. Indemnification; Third Party Claims....................53
Section 8.2. Merger or Consolidation of the Company.................53
Section 8.3. Limitation on Liability of Company and
Others.................................................54
Section 8.4. Limitation on Resignation and Assignment by
Company................................................54
ARTICLE IX. SECURITIZATION TRANSACTION...................................55
Section 9.1. Removal of Mortgage Loans from Inclusion
Under this Agreement Upon a Securitization
Transaction............................................55
ARTICLE X. DEFAULT......................................................57
Section 10.1. Events of Default......................................57
Section 10.2. Waiver of Defaults.....................................58
ARTICLE XI. TERMINATION..................................................59
Section 11.1. Termination............................................59
Section 11.2. Termination Without Cause..............................59
Section 11.3. Termination With Cause.................................59
iii
ARTICLE XII. MISCELLANEOUS PROVISIONS.....................................59
Section 12.1. Successor to Company...................................59
Section 12.2. Amendment..............................................60
Section 12.3. Governing Law..........................................61
Section 12.4. Duration of Agreement..................................61
Section 12.5. Notices................................................61
Section 12.6. Severability of Provisions.............................62
Section 12.7. Relationship of Parties................................62
Section 12.8. Execution; Successors and Assigns......................62
Section 12.9. Recordation of Assignments of Mortgage.................62
Section 12.10. Assignment by Purchaser................................63
Section 12.11. Solicitation of Mortgagor..............................63
ARTICLE XIII. COMPLIANCE WITH REGULATION AB................................63
Section 13.1. Intent of the Parties; Reasonableness..................63
Section 13.2. Additional Representations and Warranties of
the Company............................................64
Section 13.3. Information to Be Provided by the Company..............65
Section 13.4. Servicer Compliance Statement..........................70
Section 13.5. Report on Assessment of Compliance and
Attestation............................................70
Section 13.6. Use of Subservicers and Subcontractors.................72
Section 13.7. Indemnification; Remedies..............................73
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Contents of Each Mortgage Loan File
Exhibit C Form of Custodial Agreement
iv
Exhibit D Form of Opinion of Counsel
Exhibit E Items to Be Included in Monthly Remittance Advice
Exhibit F Form of Assignment and Assumption Agreement
Exhibit G Form of Seller's Officer's Certificate
Exhibit H Form of Annual Certification
Exhibit I Form of Warranty Xxxx of Sale
Exhibit J Company Guide
Exhibit K Servicing Criteria to be Addressed in Assessment of Compliance
v
This is an Second Amended and Restated Flow Seller's Warranties and Servicing
Agreement for various residential first mortgage loans, dated and effective as
of January 1, 2006, and is executed between Xxxxxxx Sachs Mortgage Company, as
purchaser (the "Purchaser"), and National City Mortgage Co., as seller and
servicer (the "Company").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company is engaged in the business of, among other things, making
loans to individuals, the repayment of which is secured by first lien
mortgages on such individuals' residences (each, a "Mortgage Loan") and
selling such Mortgage Loans to investors;
WHEREAS, the Purchaser is engaged in the business of, among other things,
purchasing Mortgage Loans for its own account;
WHEREAS, the Company has established certain terms, conditions and loan
programs, as described in the Company's Underwriting Guidelines (the "Company
Guide") and the Purchaser is willing to purchase Mortgage Loans that comply
with such terms, conditions and loan programs. The applicable provisions of
the Company Guide are attached hereto as Exhibit J;
WHEREAS, the Purchaser and the Company are parties to that certain Second
Amended and Restated Flow Seller's Warranties and Servicing Agreement, dated
as of May 1, 2003, as amended (the "Original Agreement"), pursuant to which
the Company will make adjustable rate Mortgage Loans which meet the applicable
provisions of the Company Guide, and the Purchaser will, from time to time,
purchase such Mortgage Loans from the Company, provided the parties agree on
the price, date and other conditions or considerations as set forth in this
Agreement;
WHEREAS, the Purchaser and the Company wish to prescribe the terms and manner
of purchase by the Purchaser and sale by the Company of the adjustable rate
Mortgage Loans, and the management and servicing of such Mortgage Loans by the
Company, as the servicer, in this Agreement; and
WHEREAS, at the present time, the Purchaser and the Company desire to amend
the Original Agreement to make certain modifications as set forth herein with
respect to all Mortgage Loans acquired pursuant to this Agreement or the
Original 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 is hereby acknowledged, the Purchaser and the Company agree to amend
and restate this Agreement in its entirety as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.
Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
customary mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as such Mortgage
Loan in the jurisdiction where the related Mortgaged Property is located.
Agreement: This Second Amended and Restated Flow Seller's Warranties and
Servicing Agreement and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the appraisal made in connection with the origination of
the related Mortgage Loan as the value of the related Mortgage Property, or
(ii) the purchase price paid for the Mortgage Property, provided, however, in
the case of a refinanced Mortgage Loan, such value shall be based solely on
the appraisal made in connection with the refinance of such Mortgage Loan.
Applicable Law: All provisions of statutes, rules and regulations,
interpretations and orders of governmental bodies or regulatory agencies
applicable to a Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions in which the Person in question is a
party.
Assignment of Mortgage or Assignment: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect the sale of the Mortgage to the Purchaser or its designated assignee.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the states where the
parties are located are authorized or obligated by law or executive order to
be closed.
Closing Date: Each date that the Purchaser purchases Mortgage Loans from the
Company hereunder.
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.
Commitment Letter: With respect to any pool of Mortgage Loans purchased and
sold on any Closing Date, the letter agreement between the Purchaser and the
Company (including any exhibits, schedules and attachments thereto), setting
forth the terms and conditions of such transaction and describing the Mortgage
Loans to be purchased by the Purchaser on such Closing Date. A Commitment
Letter may relate to more than one pool of Mortgage Loans to be purchased on
one or more Closing Dates hereunder.
Commission: The United States Securities and Exchange Commission.
Company: National City Mortgage Co., or its successor in interest or assigns,
or any successor to the Company under this Agreement appointed as herein
provided.
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Company Certification: The certification delivered by the Company in a form
substantially similar to Exhibit H of this Agreement.
Company Employees: The meaning assigned to such term in Section 4.13.
Company Information: As defined in Section 13.7(a).
Company Guide: As defined in the third recital to this Agreement.
Condemnation Proceeds: All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of
the power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to Appendix E of
Standard & Poor's Glossary.
Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.4.
Custodial Agreement: The agreement governing the retention of the originals of
each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, a form of which is annexed hereto as Exhibit C.
Custodian: The custodian under a Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under such Custodial
Agreement as provided therein.
Cut-off Date: The first day of the month in which the respective Closing Date
occurs.
Deemed Material Breach Representation: Each representation and warranty
identified as such in Section 3.2.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: The day preceding the Remittance Date, or if such day is
not a Business Day, the preceding Business Day.
Due Date: The first day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing on the
second day of the month preceding the month in which such Remittance Date
occurs and ending on (and including) the first day of the month in which such
Remittance Date occurs.
Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.13.
3
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.6.
Escrow Payments: With respect to any Mortgage Loan, the amounts constituting
ground rents, taxes, assessments, water rates, sewer rents, municipal charges,
mortgage insurance premiums, fire and hazard insurance premiums, condominium
charges, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other related document.
Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.1.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation, and its successors.
FHLMC: Federal Home Loan Mortgage Corporation, and its successors.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.
First Remittance Date: With respect to each Closing Date, the Remittance Date
occurring in the calendar month immediately following the month in which such
Closing Date occurs.
FNMA: Federal National Mortgage Association, and its successors.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan under the
Home Ownership and Equity Protection Act of 1994, (b) a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that
term is defined in clause (1) of the definition of that term in the New Jersey
Home Ownership Security Act of 2002), "high risk home," "predatory" or similar
loan under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor's Glossary.
For avoidance of doubt, the parties agree that this definition shall apply to
any law regardless of whether such law is presently, or in the future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to Appendix E of
Standard & Poor's Glossary.
Index: With respect to each Mortgage Loan, a rate per annum set forth on the
Mortgage Loan Schedule.
Insurance Proceeds: Proceeds of any mortgage insurance, title policy, hazard
policy or other insurance policy covering a Mortgage Loan, if any, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Company would follow in servicing mortgage loans held for
its own account.
4
Interest Rate Adjustment Date: With respect to each Mortgage Loan, the date
specified in the related Mortgage Note and the Mortgage Loan Schedule, on
which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note which provides for an
absolute maximum Mortgage Interest Rate thereunder, as specified for each
Mortgage Loan in the Mortgage Loan Schedule. The Mortgage Interest Rate during
the terms of each Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Mortgage Loan by more than
the amount per annum set forth on the Mortgage Loan Schedule.
Liquidation Proceeds: Cash (other than Insurance Proceeds or Condemnation
Proceeds) 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, sale of REO Property, or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio of the
original loan amount of the Mortgage Loan at its origination or refinancing,
as applicable, to the Appraised Value of the Mortgaged Property.
Monthly Advance: The portion of each Monthly Payment that is delinquent with
respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.3 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and interest on a
Mortgage Loan.
Monthly Remittance Advice: The meaning assigned to such term in Section 5.2.
Mortgage: The mortgage, deed of trust or other instrument and riders thereto
securing a Mortgage Note, which creates a first lien on an unsubordinated
estate in fee simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan referred to
in Exhibit B annexed hereto, and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage Note
in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual Adjustable Rate Mortgage Loan which is the
subject of this Agreement, each Adjustable Rate Mortgage Loan originally sold
and subject to this Agreement being identified on the Mortgage Loan Schedule,
which Adjustable Rate Mortgage Loan includes without limitation the Mortgage
File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds,
5
and all other rights, benefits, proceeds and obligations arising from or in
connection with such Adjustable Rate Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original related
Mortgage Note with applicable addenda and riders, the original related
security instrument and the originals of any required addenda and riders, the
original related Assignment and any original intervening related Assignments,
the original related title insurance policy, and the related appraisal report.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the annual
rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans prepared and identified
on each Closing Date, such schedule setting forth the following information
with respect to each Mortgage Loan: (1) the Company's Mortgage Loan number;
(2) the address, city, state and zip code of the Mortgaged Property; (3) a
code indicating whether the Mortgaged Property is a single family residence,
two-family residence, three-family residence, four-family residence or planned
unit development; (4) the purpose of the Mortgage Loan; (5) the current
Mortgage Interest Rate; (6) the Payment; (7) the original term to maturity;
(8) the scheduled maturity date (and, if different, the stated maturity date
indicated on the Mortgage Note on its date of origination); (9) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of
payments of principal due on or before the Cut-off Date whether or not
collected; (10) the Loan-to-Value Ratio; (11) the due date of the Mortgage
Loan; (12) whether the Mortgage Loan is insured by a Primary Mortgage
Insurance Policy; (13) the CPI twelve month pay string; (14) a field
indicating whether such Mortgage Loan is a Home Loan and (15) (a) the first
Interest Rate Adjustment Date and the Interest Rate Adjustment Date frequency,
(b) the gross margin, (c) the Lifetime Rate Cap under the terms of the
Mortgage Note, (d) the minimum Mortgage Interest Rate under the terms of the
Mortgage Note, (e) the Periodic Rate Cap; (f) the first Interest Rate
Adjustment Date immediately following the related Cut-off Date, and (g) the
Index on which the Mortgage Interest Rate is based.
Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage and riders thereto.
Mortgaged Property: The real property securing repayment of the debt evidenced
by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board, the
Vice Chairman of the Board, the President, a Vice President, an Assistant Vice
President, the Treasurer, the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Company, and delivered to the Purchaser as
required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the Company, reasonably acceptable to the Purchaser.
6
Periodic Rate Cap: The provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may
increase or decrease on an Interest Rate Adjustment Date above or below the
Mortgage Interest Rate previously in effect. The Periodic Rate Cap for each
Mortgage Loan is the rate set forth on the Mortgage Loan Schedule.
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.
Predatory Mortgage Loan: Any mortgage loan that is classified as having terms
that result in costs to the Mortgagor in excess of a specified limit pursuant
to any federal, state or local law or regulation that imposes liability on any
purchaser or assignee of such mortgage loan. Predatory Mortgage Loans shall
include, without limitation, mortgage loans designated as "high cost,"
"high-cost home loans," "covered" loans, "predatory loans" and any
designations of similar import in the applicable federal, state or local
statute.
Primary Mortgage Insurance Policy: Each policy of primary mortgage insurance
represented to be in effect pursuant to Section 3.2(xxxii), or any replacement
policy therefor obtained by the Servicer pursuant to Section 4.8.
Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
Principal Balance: As to each Mortgage Loan, (i) the actual outstanding
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, whether or not received,
minus (ii) all amounts attributable to principal collected from or on behalf
of the Mortgagor, including the principal portion of Liquidation Proceeds,
Condemnation Proceeds, and Insurance Proceeds.
Principal Prepayment: Any payment or other recovery of principal on a Mortgage
Loan which is received in advance of its scheduled Due Date, including any
prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal Prepayment Period: With respect to each Remittance Date, the period
commencing on the first day of the month preceding the month in which such
Remittance Date occurs, and ending on the last day of such month.
Purchase Price: The purchase price specified in the Commitment Letter.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, or its successor in interest or any
successor to the Purchaser under this Agreement as herein provided.
Qualified Correspondent: Any Person from which the Company purchased Mortgage
Loans, provided that the following conditions are satisfied: (i) such Mortgage
Loans were originated pursuant to an agreement between the Company and such
Person that contemplated that such
7
Person would underwrite mortgage loans from time to time, for sale to the
Company, in accordance with underwriting guidelines designated by the Company
("Designated Guidelines") or guidelines that do not vary materially from such
Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten as
described in clause (i) above and were acquired by the Company within one
hundred eighty (180) days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Company in origination of mortgage loans of the same type as the Mortgage
Loans for the Company's own account or (y) the Designated Guidelines were, at
the time such Mortgage Loans were underwritten, designated by the Company on a
consistent basis for use by lenders in originating mortgage loans to be
purchased by the Company; and (iv) the Company employed, at the time such
Mortgage Loans were acquired by the Company, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of
a sample of mortgage loans purchased during a particular time period or
through particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Company. For the avoidance of doubt, a "Qualified Correspondent"
includes a "table broker" or mortgage lender that originates loans
underwritten and funded by the Company or an Affiliate of the Company to the
Designated Guidelines.
Qualification Defect: With respect to a Mortgage Loan, (a) a defective
document in the Mortgage File, (b) the absence of a document in the Mortgage
File, or (c) the breach of any representation, warranty or covenant with
respect to the Mortgage Loan made by the Company, but, in each case, only if
the affected Mortgage Loan would cease to qualify as a "qualified mortgage"
for purposes of the REMIC Provisions.
Qualified Depository: A federal or state chartered depository institution, the
deposits in which are insured by the FDIC to the applicable limits and the
short-term unsecured debt obligations of which (or, in the case of a
depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1
by Standard & Poor's Ratings Group and Prime-1 by Xxxxx'x Investors Service,
Inc. (or a comparable rating if another rating agency is specified by the
Purchaser by written notice to the Company) at the time any deposits are held
on deposit therein; provided however, that in the event any of the Mortgage
Loans are subject to a Securitization Transaction, the Company agrees that the
holding company or other entity which maintains any accounts subject to this
definition, shall satisfy the rating requirements established by any Rating
Agency which rates securities issued as part of the Securitization
Transaction.
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.
Rating Agency: Xxxxx'x Investors Service, Inc., Standard & Poor's Ratings
Group, division of The XxXxxx-Xxxx Companies, Fitch, Inc (doing business as
"Fitch Ratings"), or any other nationally recognized statistical credit rating
agency rating any security issued in connection with any Securitization
Transaction.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
8
Reconstitution Agreement: Any servicing agreement relating to a
Reconstitution.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be reconstituted as part of a
Securitization Transaction or Whole Loan Transfer pursuant to Section 9.1
hereof. The Reconstitution Date shall be such date the Purchaser shall
designate in writing to the Company.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Advice Date: The 10th Business Day of each month or, if such 10th
day is not a Business Day, the first Business Day immediately succeeding such
date.
Remittance Date: The 18th day (or if such 18th day is not a Business Day, the
first Business Day immediately preceding such date) of any month, beginning
with the First Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of the
Purchaser through foreclosure or by deed in lieu of foreclosure, as described
in Section 4.16.
Repurchase Price: Unless agreed otherwise by the Purchaser and the Company
(including without limitation as set forth in the Commitment Letter), a price
equal to (i) the Scheduled Principal Balance of the Mortgage Loan plus (ii)
interest on such Scheduled Principal Balance at the Mortgage Loan Remittance
Rate from the date on which interest has last been paid and distributed to the
Purchaser to the last day of the month of repurchase, less amounts received or
advanced in respect of such repurchased Mortgage Loan which are being held in
the Custodial Account for distribution in the month of repurchase, to the
extent such amounts are actually paid to the Purchaser upon the repurchase of
the related Mortgage Loan plus (iii) any costs and damages, including
reasonable attorneys' fees and costs, incurred by the trust in the applicable
Securitization Transaction in connection with any violation by the Mortgage
Loan of any predatory or abusive lending law.
9
Scheduled Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not received,
minus (ii) all amounts previously collected by the Company as servicer
hereunder or advanced and distributed to the Purchaser with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances made in lieu thereof.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to
an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (2) an
issuance of publicly offered or privately placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Servicer: As defined in Section 13.3(c).
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company
of its servicing obligations, including, but not limited to, the cost of (a)
the preservation, restoration and protection of the Mortgaged Property, (b)
any enforcement or judicial proceedings, including foreclosures, (c) the
management and liquidation of any REO Property and (d) compliance with the
obligations under Section 4.8.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the per annum
fee the Purchaser shall pay to the Company, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the Scheduled Principal Balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount
and same period for which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by Section 4.5) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.5.
Servicing Fee Rate: 0.25% per annum for each Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained by the
Company consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in the Custodial Agreement the originals of which are delivered to the
Custodian pursuant to Section 2.3.
Servicing Officer: Any officer of the Company involved in or responsible for
the administration and servicing of the Mortgage Loans whose name appears on a
list of servicing officers
10
furnished by the Company to the Purchaser upon request, as such list may from
time to time be amended.
Sponsor: The sponsor, as such term is defined in Regulation AB, with respect
to any Securitization Transaction.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary, as may
be in effect from time to time.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the Company
or any Subservicer and is responsible for the performance (whether directly or
through Subservicers or Subcontractors) of a substantial portion of the
material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB; provided, however, that the term "Subservicer" shall
not include any master servicer, or any special servicer engaged by a
Depositor, Purchaser or investor in a Securitization Transaction, nor any
"back-up servicer" or trustee performing servicing functions on behalf of a
Securitization Transaction.
Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Company and shall not include a
mortgage broker that does not fund loans.
Warranty Xxxx of Sale: A warranty xxxx of sale with respect to the Mortgage
Loans purchased on a Closing Date in the form annexed hereto as Exhibit I.
Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
ARTICLE II.
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
DELIVERY OF DOCUMENTS
Section 2.1. Conveyance of Mortgage Loans; Possession of Mortgage
Files; Maintenance of Servicing Files. Company agrees to sell and Purchaser
agrees to purchase, from time to time, those certain Mortgage Loans identified
in a Mortgage Loan Schedule, at the price and on the terms set forth herein
and in the related Commitment Letter. The Purchaser, on any Closing Date,
shall be obligated to purchase only such Mortgage Loans set forth in the
applicable
11
Mortgage Loan Schedule, subject to the terms and conditions of this Agreement
and the related Commitment Letter.
Purchaser will purchase Mortgage Loan(s) from the Company on such Closing
Dates as may be agreed upon by the Purchaser and the Company. The closing
shall, at Purchaser's option be either: by telephone, confirmed by letter or
wire as the parties shall agree; or conducted in person at such place, as the
parties shall agree. On the Closing Date and subject to the terms and
conditions of this Agreement, the Company will sell, transfer, assign, set
over and convey to the Purchaser, without recourse except as set forth in this
Agreement, and the Purchaser will purchase, all of the right, title and
interest of the Company in and to the Mortgage Loans being conveyed by it
hereunder, as identified on the Mortgage Loan Schedule.
On the Closing Date and in accordance with the terms herein, the Purchaser
will pay to the Company, by wire transfer of immediately available funds, the
Purchase Price, together with interest, if any, accrued from the Cut-off Date
through the day immediately preceding the Closing Date, according to the
instructions to be provided by the Company. The Company, simultaneously with
the payment of the Purchase Price, shall execute and deliver to the Purchaser
a Warranty Xxxx of Sale with respect to the Mortgage Loans in the form annexed
hereto as Exhibit I.
The principal balance of each Mortgage Loan as of the Cut-off Date shall be
determined after application of payments of principal due on or before the
Cut-off Date whether or not collected. Therefore, payments of scheduled
principal and interest prepaid for a Due Date beyond the Cut-off Date shall
not be applied to the principal balance as of the Cut-off Date. Such prepaid
amounts (minus interest at the Servicing Fee Rate) shall be the property of
the Purchaser. The Company shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser for subsequent remittance by the Company to the Purchaser, and shall
remit such amounts as provided in Section 5.1.
Pursuant to Section 2.3, the Company shall deliver the Mortgage Loan Documents
to the Custodian. The contents of each Mortgage File not delivered to the
Custodian are and shall be held in trust by the Company for the benefit of the
Purchaser as the owner thereof. The Company shall maintain a Servicing File
consisting of a copy of the contents of each Mortgage File and the originals
of the documents in each Mortgage File not delivered to the Custodian. The
possession of each Servicing File by the Company is at the will of the
Purchaser for the sole purpose of servicing the related Mortgage Loan, and
such retention and possession by the Company is in a custodial capacity only.
Upon the sale of the Mortgage Loans the ownership of each Mortgage Note, the
related Mortgage and the related Mortgage File and Servicing File shall vest
immediately in the Purchaser, and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of the Company shall vest immediately in the Purchaser and shall be
retained and maintained by the Company, in trust, at the will of the Purchaser
and only in such custodial capacity. The Company shall release its custody of
the contents of any Servicing File only in accordance with written
instructions from the Purchaser, unless such release is required as incidental
to the Company's servicing of the Mortgage Loans or is in connection with a
repurchase of any Mortgage Loan pursuant to Sections 2.3, 3.3 or 6.2.
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Section 2.2. Books and Records; Transfers of Mortgage Loans. From
and after the sale of the Mortgage Loans to the Purchaser all rights arising
out of the Mortgage Loans including but not limited to all funds received on
or in connection with the Mortgage Loans, shall be received and held by the
Company in trust for the benefit of the Purchaser as owner of the Mortgage
Loans, and the Company shall retain record title to the related Mortgages for
the sole purpose of facilitating the servicing and the supervision of the
servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete
set of books and records for each Mortgage Loan which shall be marked clearly
to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Company shall maintain in its possession, available for
inspection by the Purchaser, or its designee, and shall deliver to the
Purchaser upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of FNMA or FHLMC,
including but not limited to documentation as to the method used in
determining the applicability of the provisions of the Flood Disaster
Protection Act of 1973, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and eligibility of any condominium project for
approval by FNMA or FHLMC, and periodic inspection reports as required by
Section 4.13. To the extent that original documents are not required for
purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the
Company complies with the requirements of the FNMA or FHLMC Selling and
Servicing Guide, as amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall make
available for inspection by any Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with Applicable Law.
The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes
of this Agreement, the Company shall be under no obligation to deal with any
person with respect to this Agreement or the Mortgage Loans unless the books
and records show such person as the owner of the Mortgage Loan. The Purchaser
may, subject to the terms of this Agreement, sell and transfer one or more of
the Mortgage Loans, provided, however, that in no event shall there be more
than four Persons at any given time having the status of "Purchaser"
hereunder. The Purchaser also shall advise the Company of the transfer. Upon
receipt of notice of the transfer, the Company shall xxxx its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with
respect to the Mortgage Loans sold or transferred. If the Company receives
notification of a transfer less than five (5) Business Days before the monthly
Determination Date, the Company's duties to remit and report to the new
purchaser(s) as required by Section 5 shall begin with the first Determination
Date after the Reconstitution Date.
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Section 2.3. Delivery of Documents. Pursuant to the Custodial
Agreement delivered to the Purchaser on or before a Closing Date, the Company
shall deliver and release to the Custodian those Mortgage Loan Documents as
required by the Custodial Agreement and by this Agreement with respect to each
Mortgage Loan being transferred to the Purchaser on such Closing Date.
The Custodian shall certify its receipt of all such Mortgage Loan Documents
required to be delivered pursuant to the Custodial Agreement. The Company will
be responsible for the Custodian's fees and expenses with respect to the
delivery and certification of those Mortgage Loan Documents required to be
delivered pursuant to the Custodial Agreement. The Company will be responsible
for the fees and expenses related to the recording of the initial Assignments
of Mortgage (including any fees and expenses related to any preparation and
recording of any intervening or prior assignments of the Mortgage Loans to the
Company or to any prior owners of or mortgagees with respect to the Mortgage
Loans). The Purchaser will be responsible for the Custodian's fees and
expenses with respect to the initial inventory and maintenance of the Mortgage
Loans on or after the Closing Date, including the costs associated with
clearing exceptions.
Within 90 days after each Closing Date, the Company shall deliver to the
Custodian each of the documents described in Exhibit B not delivered pursuant
to the Agreement with respect to the related Mortgage Loans.
The Company shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.1 or 6.1 within one week of their
execution, provided, however, that the Company shall provide the Custodian
with a certified true copy of any such document submitted for recordation
within ten (10) days of its execution, and shall provide the original of any
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 60 days of its submission for recordation.
In the event the public recording office is delayed in returning any original
document, the Company shall deliver to the Custodian within 240 days of its
submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that
the recorded document has not been delivered to the Custodian due solely to a
delay by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Company will be required to
deliver the document to the Custodian by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, if the originals or certified copies required
in this Section 2.3 are not delivered as required within 90 days following the
Closing Date or as otherwise extended as set forth above, the related Mortgage
Loan shall, upon request of the Purchaser, be repurchased by the Company in
accordance with Section 3.3 hereof; provided, however, that the foregoing
repurchase obligation shall not apply in the event the Company cannot deliver
such items due to
14
a delay caused by the recording office in the applicable jurisdiction;
provided that the Company shall deliver instead a recording receipt of such
recording office or, if such recording receipt is not available, an Officer's
Certificate from the Company confirming that such documents have been accepted
for recording. Any such document shall be delivered to the Purchaser or its
designee promptly upon receipt thereof from the related recording office.
If, subsequent to the related Closing Date, the Company, the Purchaser or the
Custodian finds any document or documents constituting a part of a Mortgage
File pertaining to a Mortgage Loan to be defective (or missing) in any
material respect, and such defect or missing document materially and adversely
affects the value of the related Mortgage Loan or the interests of the
Purchaser therein, the party discovering such defect shall promptly so notify
the Company. The Company shall have a period of 90 days after receipt of such
written notice within which to correct or cure any such defect. The Company
hereby covenants and agrees that, if any material defect cannot be corrected
or cured, the Company will, upon the expiration of the applicable cure period
described above, repurchase the related Mortgage Loan in the manner set forth
in Section 3.3; provided, however, that with respect to any Mortgage Loan, if
such defect constitutes a Qualification Defect, any such repurchase must take
place within 75 days of the date such defect is discovered.
Notwithstanding the foregoing, with respect to a Mortgage Loan, if, at the end
of such 90-day period, the Company delivers an Officer's Certificate to the
Purchaser certifying that the Company is using good faith efforts to correct
or cure such defect and identifying progress made, then the Purchaser shall
grant the Company an extension to correct or cure such defect. The extension
shall not extend beyond (1) the date that is 75 days after the date the defect
is discovered, or, (2) if the defect is not a Qualification Defect (as
evidenced by an Opinion of Counsel), the date that is 30 days beyond the
original 90-day cure period. If the defect is not a Qualification Defect,
additional 30-day extensions may be obtained pursuant to the same procedure,
as long as the Company demonstrates continued progress toward a correction or
cure; provided that no extension shall be granted beyond 180 days from the
date on which the Company received the original notice of the defect.
Notwithstanding the foregoing, with respect to a Mortgage Loan, the failure of
the Purchaser to notify the Company of any defective or missing document in a
Mortgage File within such 90-day period, or the failure of the Purchaser to
require the Company to cure or repurchase the related Mortgage Loan upon
expiration of such 90-day period, shall not constitute a waiver of its rights
hereunder, including the rights with respect to a Mortgage Loan, to require
the Company to repurchase the affected Mortgage Loan and the right to
indemnification pursuant to Section 3.3 hereof.
15
Section 2.4. Mortgage Schedule. The Company shall provide the
Purchaser with certain information constituting a listing of the Mortgage
Loans to be purchased under this Agreement (the "Mortgage Loan Schedule") on
each Closing Date substantially in the form attached hereto as Exhibit A. Each
Mortgage Loan Schedule shall conform to the definition of "Mortgage Loan
Schedule" hereunder.
Section 2.5. Examination of Mortgage Files. Prior to each Closing
Date, the Company shall (a) deliver to the Purchaser in escrow, for
examination, the Mortgage File for each Mortgage Loan to be transferred on
such Closing Date, including a copy of the Assignment of Mortgage, pertaining
to each Mortgage Loan, or (b) make the Mortgage Files available to the
Purchaser for examination at the Company's offices or such other location as
shall otherwise be agreed upon by the Purchaser and the Company. Such
examination may be made by the Purchaser, or by any prospective purchaser of
the Mortgage Loans from the Purchaser, at any time before or after the related
Closing Date upon prior reasonable notice to the Company. The fact that the
Purchaser or any prospective purchaser of the Mortgage Loans has conducted or
has failed to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser's (or any of its successor's) rights to
demand repurchase, substitution or other relief as provided under this
Agreement.
Section 2.6. Representations, Warranties and Agreements of the
Company. The Company agrees and acknowledges that it shall, as a condition to
the consummation of the transactions contemplated hereby, make the
representations and warranties specified in Sections 3.1 and 3.2 as of the
Closing Date for the related Mortgage Loans. The Company, without conceding
that the Mortgage Loans are securities, hereby makes the following additional
representations, warranties and agreements which shall be deemed to have been
made as of the Closing Date for the related Mortgage Loans:
(a) neither the Company nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of any
Mortgage Loans, any interest in any Mortgage Loans or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of any Mortgage Loans, any interest in any Mortgage
Loans or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loans, any interest in any
Mortgage Loans or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action which would constitute
a distribution of the Mortgage Loans under the Securities Act or which
would render the disposition of any Mortgage Loans a violation of
Section 5 of the Securities Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Mortgage Loans; and
(b) the Company has not dealt with any broker or agent or anyone
else who might be entitled to a fee or commission in connection with
this transaction other than the Purchaser.
16
Section 2.7. Representation, Warranties and Agreement of
Purchaser. The Purchaser, without conceding that the Mortgage Loans are
securities, hereby makes the following representations, warranties and
agreements, which shall have been deemed to have been made as of the Closing
Date for the related Mortgage Loans:
(i) the Purchaser understands that the Mortgage Loans
have not been registered under the Securities Act or the
securities laws of any state;
(ii) the Purchaser is acquiring the Mortgage Loans for
its own account only and not for any other person;
(iii) the Purchaser considers itself a substantial,
sophisticated institutional investor having such knowledge
and experience in financial and business matters that it is
capable of evaluating the merits and risks of investment in
the Mortgage Loans;
(iv) the Purchaser has been duly organized and is
validly existing as a limited partnership in good standing
under the laws of the State of New York with full power and
authority (corporate and other) to enter into and perform
its obligations under this Agreement;
(v) this Agreement has been duly executed and
delivered by the Purchaser, and, assuming due authorization,
execution and delivery by each of the other parties hereto,
constitutes a legal, valid, and binding agreement of the
Purchaser, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws affecting creditors'
rights generally and to general principles of equity
regardless of whether enforcement is sought in a proceeding
in equity or at law;
(vi) the execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the
transactions contemplated hereby do not require the consent
or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency,
except such as has been obtained, given, effected or taken
prior to the date thereof;
(vii) the execution and delivery of this Agreement
have been duly authorized by all necessary partnership
action on the part of the Purchaser; neither the execution
and delivery by the Purchaser of this Agreement, nor the
consummation by the Purchaser of the transactions herein
contemplated, nor compliance by the Purchaser with the
provisions hereof, will conflict with or result in a breach
of, or constitute a default under, any of the provisions of
the governing documents of the Purchaser or any law,
governmental rule or regulation or any material judgment,
decree or order binding on the Purchaser or any of its
properties, or any of
17
the provisions of any material indenture, mortgage, deed of
trust, contract or other instrument to which the Purchaser
is a party or by which it is bound;
(viii) there are no actions, suits or proceedings
pending or, to the knowledge of the Purchaser, threatened,
before or by any court, administrative agency, arbitrator or
governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with
respect to any other matter that in the judgment of the
Purchaser will be determined adversely to the Purchaser and
will if determined adversely to the Purchaser materially
adversely affect its ability to perform its obligations
under this Agreement; and
(ix) except for the sale to the Company, the Purchaser
has not assigned or pledged any Mortgage Note or the related
Mortgage or any interest or participation therein.
Section 2.8. Closing. The closing for the purchase and sale of
each pool of Mortgage Loans shall take place on the related Closing Date. At
the Purchaser's option, each closing shall be either: by telephone, confirmed
by letter or wire as the parties shall agree; or conducted in person, at such
place as the parties shall agree.
Each closing shall be subject to each of the following conditions:
(i) all of the representations and warranties of the
Company under this Agreement shall be true and correct as of
the related Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute
a default under this Agreement;
(ii) the Purchaser shall have received, or the
Purchaser's attorneys shall have received in escrow, all
Closing Documents for the related Mortgage Loans as
specified in Section 2.9 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly
executed by all signatories other than the Purchaser as
required pursuant to the respective terms thereof;
(iii) the Company shall have delivered and released to
the Custodian all documents required pursuant to this
Agreement and the Custodial Agreement, and
(iv) all other terms and conditions of this Agreement
shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the Company on
each Closing Date the Purchase Price for the related Mortgage Loans by wire
transfer of immediately available funds to the account designated by the
Company.
18
Section 2.9. Closing Documents. With respect to each pool of
Mortgage Loans, the Closing Documents shall consist of fully executed
originals of the following documents:
(i) this Agreement, in two counterparts;
(ii) the related Custodial Agreement, dated as of the
related Cut-off Date, in three counterparts, in the form
attached as Exhibit C to this Agreement;
(iii) the related Mortgage Loan Schedule, one copy to
be attached to each counterpart of this Agreement, and to
each counterpart of the related Custodial Agreement, as the
Mortgage Loan Schedule thereto;
(iv) a Receipt and Certification, as required under
the Custodial Agreement;
(v) an officer's certificate of the Company
substantially in the form of Exhibit G attached hereto; and
(vi) an Opinion of Counsel of the Company, in the form
of Exhibit D hereto.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.1. Company Representations and Warranties. The Company
hereby represents and warrants to the Purchaser that, as of each Closing Date:
(a) Due Organization and Authority.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio as all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by the
Company, and in any event the Company is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement; the Company has the full
corporate power and authority to execute and deliver this Agreement and
to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to
be delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Company; and all requisite corporate
action has been taken by the Company to make this Agreement valid and
binding upon the Company in accordance with its terms;
19
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of the Company, which is in the
business of selling and servicing loans, and the transfer, assignment
and conveyance of the Mortgage Notes and the Mortgages by the Company
pursuant to this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the acquisition of
the Mortgage Loans by the Company, the sale of the Mortgage Loans to the
Purchaser or the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions of this Agreement will
conflict with or result in a breach of any of the terms, articles of
incorporation or by-laws or any legal restriction or any agreement or
instrument to which the Company is now a party or by which it is bound,
or constitute a default or result in the violation of any law, rule,
regulation, order, judgment or decree to which the Company or its
property is subject, or impair the ability of the Purchaser to realize
on the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of residential mortgage loans
for FNMA and FHLMC, with the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the
same type as the Mortgage Loans. The Company is in good standing to sell
mortgage loans to and service mortgage loans for FNMA and FHLMC, and no
event has occurred, including but not limited to a change in insurance
coverage, which would make the Company unable to comply with FNMA or
FHLMC eligibility requirements or which would require notification to
FNMA or FHLMC;
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax
purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(f) Ability to Perform.
The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in
this Agreement. The Company is solvent and the sale of the Mortgage
Loans will not cause the Company to become insolvent. The sale of the
Mortgage Loans is not undertaken to hinder, delay or defraud any of the
Company's creditors;
(g) No Litigation Pending.
20
There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance or in
the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of the
Company, or in any material impairment of the right or ability of the
Company to carry on its business substantially as now conducted, or lead
to any material liability on the part of the Company, or which would
draw into question the validity of this Agreement or the Mortgage Loans
or of any action taken or to be contemplated herein, or which would be
likely to impair materially the ability of the Company to perform under
the terms of this Agreement;
(h) No Consent Required.
No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with this
Agreement or the sale of the Mortgage Loans as evidenced by the
consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Closing Date;
(i) 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;
(j) Sale Treatment.
The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for
accounting and tax purposes;
(k) No Material Change.
There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the
Company's most recent financial statements; and
(l) No Brokers' Fees.
The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation in
the connection with the sale of the Mortgage Loans.
Section 3.2. Representations and Warranties Regarding Individual
Mortgage Loans. As to each Mortgage Loan, the Company hereby represents and
warrants to the Purchaser that as of the related Closing Date (except as set
forth in (i) below):
(i) Mortgage Loans as Described.
21
The information set forth in the Mortgage Loan Schedule is true and
correct as of the related Cut-off Date.
(ii) Payment History.
All payments required to be made up to the related Cut-off Date for each
Mortgage Loan under the terms of the Mortgage Note have been made and
credited. No payment under any Mortgage Loan has been 30 days delinquent
more than one time within twelve months prior to the related Closing
Date;
(iii) No Outstanding Charges.
There are no defaults by the Company or the Mortgagor in complying with
the terms of the Mortgage Note or Mortgage, and all taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges,
which previously became due and owing have been paid, or an escrow of
funds has been established for every such item which remains unpaid and
which has been assessed but is not yet due and payable;
(iv) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary to protect the
interests of the Purchaser, and which has been delivered to the
Purchaser. The substance of any such waiver, alteration or modification
has been approved by the mortgage insurer, if the Mortgage Loan is
insured, the title insurer, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule. No Mortgagor has
been released, in whole or in part;
(v) No Defenses.
The Mortgage Loan is not subject to any right of rescission, set-off,
counterclaim or defense, including without limitation the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vi) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction,
release, cancellation, subordination or rescission;
(vii) Validity of Mortgage Documents.
22
The Mortgage Note and the Mortgage and any other agreement executed and
delivered by a Mortgagor in connection with a Mortgage Loan are genuine,
and each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms (including, without limitation,
any provisions therein relating to prepayment charges);
(viii) No Fraud.
All the documents executed in connection with the Mortgage Loan
including, but not limited to, the Mortgage Note and the Mortgage are
free of fraud and any misrepresentation, are signed by the persons they
purport to be signed by, and witnessed or, as appropriate, notarized by
the persons whose signatures appear as witnesses or notaries, and each
such document constitutes the valid and binding legal obligation of the
signatories and is enforceable in accordance with its terms;
(ix) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law including,
without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, predatory and abusive lending
laws, equal credit opportunity and disclosure laws or unfair and
deceptive practices laws applicable to the Mortgage Loan including,
without limitation, any provisions relating to prepayment penalties,
have been complied with, the consummation of the transactions
contemplated hereby will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser upon
demand, evidence of compliance with all such requirements. This
representation and warranty is a Deemed Material Breach Representation;
(x) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in the related
Mortgage Loan Schedule and consists of real property with a detached
single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium
project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or
less, provided, however, that any mobile home (double wide only) or
manufactured dwelling shall conform with the applicable Xxxxxx Xxx and
Xxxxxxx Mac requirements regarding such dwellings and that no Mortgage
Loan is secured by a single parcel of real property with a cooperative
housing corporation, a log home or a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique
property types. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date
of origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a
home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for
commercial purposes and is not storing any chemicals or raw materials
other than those commonly used for homeowner repair,
23
maintenance and/or household purposes. With respect to any Mortgage Loan
secured by a Mortgaged Property improved by manufactured housing, (i)
the related manufactured housing unit is permanently affixed to the
land, (ii) the related manufactured housing unit and the related land
are subject to a Mortgage properly filed in the appropriate public
recording office and naming the Seller as mortgagee, (iii) the related
Mortgaged Property is not located in the state of New Jersey and (iv) as
of the origination date of the related Mortgage Loan, the related
Mortgagor occupied the related manufactured home as its primary
residence. This representation and warranty is a Deemed Material Breach
Representation;
(xi) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings on the Mortgaged Property
and all installations and mechanical, electrical, plumbing, heating and
air conditioning systems located in or annexed to such buildings, and
all additions, alterations and replacements made at any time with
respect to the foregoing. The lien of the Mortgage is subject only to:
(A) the lien of current real property taxes and assessments not
yet due and payable;
(B) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy or
attorney's title opinion delivered to the originator of the Mortgage
Loan and (i) referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan and (ii) which do not adversely
affect the Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(C) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable first lien and first
priority security interest on the property described therein and the
Company has full right to sell and assign the same to the Purchaser;
(xii) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed, except for
escrows established or created due to seasonal weather conditions, and
there is no requirement for future advances thereunder. All costs, fees
and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is
24
not entitled to any refund of any amounts paid or due under the Mortgage
Note or Mortgage;
(xiii) Ownership.
The Company is the sole owner of record and holder of the Mortgage Loan
and the related Mortgage Note and the Mortgage are not assigned or
pledged, and the Company has good and marketable title thereto and has
full right and authority to transfer and sell the Mortgage Loan to the
Purchaser. The Company is transferring the Mortgage Loan free and clear
of any and all encumbrances, liens, pledges, equities, participation
interests, claims, charges or security interests of any nature
encumbering such Mortgage Loan;
(xiv) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance company,
or similar institution which is supervised and examined by a federal or
state authority or by a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 or the National
Housing Act. All parties which have had any interest in the Mortgage
Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is
located, and any qualification requirements of FNMA or FHLMC, and (2)
organized under the laws of such state, or (3) qualified to do business
in such state, or (4) federal savings and loan associations or national
banks having principal offices in such state, or (5) not doing business
in such state;
(xv) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title insurance policy
or other generally acceptable form of policy of insurance acceptable to
FNMA or FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Company, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in
clauses (1), (2) and (3) of paragraph (xi) of this Section 3.2, and
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for
adjustments to the Mortgage Interest Rate and Monthly Payment; provided,
however, that in the case of any Mortgage Loan secured by a Mortgaged
Property located in a jurisdiction where such policies are generally not
available, the Mortgage Loan is the subject of an opinion of counsel of
the type customarily rendered in such jurisdiction in lieu of title
insurance. The Company is the sole insured of such lender's title
insurance policy, and such lender's title insurance policy is in full
force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been
made under such lender's title
25
insurance policy, and no prior holder of the Mortgage, including the
Company, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(xvi) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have been filed
for work, labor or material (and no rights are outstanding that under
the law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage which are not insured against by
the title insurance policy referenced in Section (xv) above;
(xvii) Location of Improvements; No Encroachments.
Except as insured against by the title insurance policy referenced in
Section (xv) above, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly
within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or
regulation;
(xviii) Customary Provisions.
The Mortgage contains customary and enforceable provisions such as to
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the
security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. There is no homestead or other exemption available
to a Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage;
(xix) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was lawfully
occupied under Applicable Law;
(xx) No Additional Collateral.
The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement
or chattel mortgage referred to in (xi) above;
(xxi) Deeds of Trust.
In the event that the Mortgage constitutes a deed of trust, a trustee,
duly qualified under Applicable Law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the
26
Mortgagee to the trustee under the deed of trust, except in connection
with a trustee's sale after default by the Mortgagor;
(xxii) Transfer of Mortgage Loans.
The Assignment is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(xxiii) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by water, fire, earthquake or earth
movement, windstorm, flood, tornado, hurricane or other casualty so as
to affect adversely the value of the Mortgaged Property as security for
the Mortgage Loan or the use for which the premises were intended;
(xxiv) Collection Practices; Escrow Deposits.
The origination and collection practices used with respect to the
Mortgage Loan have been in accordance with Acceptable Servicing
Practices, and have been in all material respects legal and proper, and
in accordance with the terms of the Mortgage Note and Mortgage. All
Escrow Payments have been collected in full compliance with state and
federal law. An escrow of funds is not prohibited by Applicable Law and
has been established to pay for every item that remains unpaid and has
been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(xxv) No Condemnation.
To the best of Company's knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of the related
Mortgaged Property;
(xxvi) The Appraisal.
The Mortgage Loan Documents contain an appraisal of the related
Mortgaged Property by an appraiser who had no interest, direct or
indirect, in the Mortgaged Property or in any loan made on the security
thereof; and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and the appraiser
both satisfy the applicable requirements of FNMA or FHLMC;
(xxvii) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to FNMA or FHLMC against loss by fire and such
hazards as are covered under a standard extended coverage endorsement,
in an amount which is not less than the lesser of 100% of the insurable
value of the Mortgaged Property and the outstanding principal balance of
the Mortgage Loan, but in no event less than the minimum amount
necessary to fully compensate for any damage or loss on a replacement
cost basis; if the
27
Mortgaged Property is a condominium unit, it is included under the
coverage afforded by a blanket policy for the project; the insurance
policy contains a standard clause naming the originator of such mortgage
loan, its successor and assigns, as insured mortgagee; if upon
origination of the Mortgage Loan, the improvements on the Mortgaged
Property were in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a
flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a
generally acceptable insurance carrier, in an amount representing
coverage not less than the least of (A) the outstanding principal
balance of the Mortgage Loan, (B) the full insurable value and (C) the
maximum amount of insurance which was available under the Flood Disaster
Protection Act of 1983, as amended; and the Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the mortgagor's
cost and expense and the Company has not acted or failed to act so as to
impair the coverage of any such insurance policy or the validity,
binding effect and enforceability thereof;
(xxviii) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers Civil Relief Act as amended, or other similar state
statute;"
(xxix) Payment Terms.
(xxx) The Mortgage Note is payable on the first day of
each month in equal monthly installments of principal and
interest,(provided that, the installments of interest are
subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, and
interest is calculated and payable in arrears) sufficient to
amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years
from origination and once the amortization period starts,
payments are calculated to fully amortize by maturity. No
Mortgage Loan converts, pursuant to the terms of the related
Mortgage Note, from having interest accrue on the principal
amount thereof based on an adjustable rate to having
interest accrue based on a fixed rate, and no Mortgage Loan
has a shared appreciation or other contingent interest
feature, or permits negative amortization. The Mortgage
Interest Rate, Lifetime Rate Cap, each applicable Periodic
Rate Cap and each applicable Interest Rate Adjustment Date
for each Mortgage Loan are as set forth for such Mortgage
Loan in the Mortgage Loan Schedule;
(xxxi) No Defaults.
Except with respect to delinquencies identified on the Mortgage Loan
Schedule, there is no default, breach, violation or event of
acceleration existing under any Mortgage or Mortgage Note and no event
that, with the passage of time or with notice and the
28
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration, and the Company has not
waived any default, breach, violation or event of acceleration;
(xxxii) Loan-to-Value Ratio; Modifications; No
Foreclosures.
The Loan-to-Value Ratio of each Mortgage Loan was less than 125% at the
time of its origination or refinancing, as applicable. No Mortgage Loan
is subject to a written foreclosure agreement or pending foreclosure
proceedings;
(xxxiii) Primary Mortgage Insurance.
Each Mortgage Loan with an LTV at origination in excess of 80% will be
subject to a Primary Mortgage Insurance Policy, issued by an insurer
acceptable to FNMA or FHLMC, in at least such amounts as are required by
FHLMC or FNMA. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. Any Mortgage
subject to any such Primary Mortgage Insurance Policy obligates the
Mortgagor thereunder to maintain such insurance and to pay all premiums
and charges in connection therewith unless terminable in accordance with
FHLMC standards or Applicable Law;
(xxxiv) Underwriting Guidelines.
The Mortgage Loan was underwritten in accordance with the Company's
underwriting guidelines in effect at the time of origination with
exceptions thereto exercised in a reasonable manner;
(xxxv) Adverse Selection.
The Company used no adverse selection procedures in selecting the
Mortgage Loan from among the outstanding first-lien residential mortgage
loans owned by it which were available for inclusion in the Mortgage
Loans;
(xxxvi) No Bankruptcy.
To the best of the Company's knowledge, no Mortgagor was a debtor in any
state or federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated and as of the related Closing Date, the
Company has not received notice that any Mortgagor is a debtor under any
state or federal bankruptcy or insolvency proceeding;
(xxxvii) No Additional Payments.
There is no obligation on the part of the Company or any other party to
make payments in addition to those made by the Mortgagor;
29
(xxxviii) Predatory Lending Regulations.
No Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and
no Mortgage Loan originated on or after October 1, 2002 through March 6,
2003 is governed by the Georgia Fair Lending Act. No Mortgage Loan is
covered by the Home Ownership and Equity Protection Act of 1994 and no
Mortgage Loan is in violation of any comparable state or local law;
(xxxix) HOEPA.
No Mortgage Loan is classified as a Predatory Mortgage Loan under
Section 32 of the Home Ownership and Equity Protection Act of 1994, as
amended, or any similar state or local law including, without
limitation, the Local Law for the City of New York, No. 36 relating to
predatory lending passed by the New York City Council on November 20,
2002, as amended from time to time;
(xl) Fair Credit Reporting Act.
(b) The Company, in its capacity as servicer, has fully furnished,
for each Mortgage Loan, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information
(e.g., favorable and unfavorable) on its borrower credit files to
Equifax, Experian and Trans Union Credit Information Company (or the
successors to such credit repositories), on a monthly basis. The
Servicer will transmit full-file credit reporting data for each Mortgage
Loan pursuant to Xxxxxx Xxx Guide Announcement 95-19 and that for each
Mortgage Loan, Servicer agrees it shall report one of the following
statuses each month as follows: new origination, current, delinquent
(30-, 60-, 90-days, etc.), foreclosed, or charged-off. This
representation and warranty is a Deemed Material Breach Representation;
(i) No Arbitration.
With respect to any Mortgage Loan originated on or after August 1, 2004,
neither the related Mortgage nor the related Mortgage Note requires the
Mortgagor to submit to arbitration to resolve any dispute arising out of
or relating in any way to the Mortgage Loan transaction. This
representation and warranty is a Deemed Material Breach Representation;
(ii) Balloon Mortgages
No Mortgage Loan is a balloon mortgage loan that has an original stated
maturity of less than seven (7) years;
(iii) No Credit Insurance Policies.
In connection with the origination of any Mortgage Loan, no proceeds
from any Mortgage Loan were used to finance or acquire a single-premium
credit life insurance policy. No Mortgagor was required to purchase any
single-premium credit insurance
30
policy (e.g., life, mortgage, disability, accident, unemployment, or
health insurance product) or debt cancellation agreement as a condition
of obtaining the extension of credit. No Mortgagor obtained a prepaid
single-premium credit insurance policy (e.g., life, mortgage,
disability, accident, unemployment, mortgage, or health insurance) in
connection with the origination of the Mortgage Loan; no proceeds from
any Mortgage Loan were used to purchase single-premium credit insurance
policies or debt cancellation agreements as part of the origination of,
or as a condition to closing, such Mortgage Loan. This representation
and warranty is a Deemed Material Breach Representation;
(iv) Prepayment Penalties.
(c) The Mortgage Loan is subject to a prepayment penalty as
provided in the related Mortgage Note except as set forth on the related
Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
prepayment penalty feature, each such prepayment penalty is enforceable
and will be enforced by the Seller for the benefit of the Purchaser, and
each prepayment penalty is permitted pursuant to federal, state and
local law. Each such prepayment penalty is in an amount not more than
the maximum amount permitted under applicable law and no such prepayment
penalty may be imposed for a term in excess of five (5) years with
respect to Mortgage Loans originated prior to October, 1, 2002. With
respect to Mortgage Loans originated on or after October 1, 2002, the
duration of the prepayment period shall not exceed three (3) years from
the date of the Mortgage Note unless the Mortgage Loan was modified to
reduce the prepayment period to no more than three (3) years from the
date of such Mortgage Loan and the Mortgagor was notified in writing of
such reduction in prepayment period. With respect to any Mortgage Loan
that contains a provision permitting imposition of a premium upon a
prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the Mortgagor agreed to such premium in exchange for a
monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the Mortgagor was offered
the option of obtaining a mortgage loan that did not require payment of
such a premium and (iii) the prepayment premium is disclosed to the
Mortgagor in the loan documents pursuant to applicable state, local and
federal law. This representation and warranty is a Deemed Material
Breach Representation;
(i) Manufactured Housing.
With respect to any Mortgaged Property that constitutes manufactured
housing, each related Mortgage Loan is secured by a "single family
residence" within the meaning of Section 25(e)(10) of the Code. The fair
market value of the manufactured home securing any Mortgage Loan was at
least equal to 80% of the adjusted issue price of the Mortgage Loan at
either (i) the date the Mortgage Loan was originated (as determined
pursuant to the REMIC provisions), or (ii) the date the Mortgage Loan is
transferred to the Purchaser;
(ii) Qualified Mortgage.
(iii) Each Mortgage Loan is a "qualified mortgage"
within Section 860G(a)(3) of the Code;
31
(iv) Origination Practices.
(v) No Mortgagor was encouraged or required to select
a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less
creditworthy borrowers, unless at the time of the Mortgage
Loan's origination, such Mortgagor did not qualify taking
into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Mortgage
Loan's originator or any affiliate of the Mortgage Loan's
originator. If, at the time of loan application, the
Mortgagor may have qualified for a lower-cost credit product
then offered by any mortgage lending affiliate of the
Mortgage Loan's originator, the Mortgage Loan's originator
referred the Mortgagor's application to such affiliate for
underwriting consideration. This representation and warranty
is a Deemed Material Breach Representation;
(vi) Underwriting Methodology.
(vii) The methodology used in underwriting the
extension of credit for each Mortgage Loan employs, in part,
objective mathematical principles which relate the
Mortgagor's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on
the extent of the Mortgagor's equity in the collateral as
the principal determining factor in approving such credit
extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) the Mortgagor
had a reasonable ability to make timely payments on the
Mortgage Loan. This representation and warranty is a Deemed
Material Breach Representation;
(viii) Points and Fees.
(ix) No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i)
$1,000, or (ii) 5% of the principal amount of such Mortgage
Loan, whichever is greater. For purposes of this
representation, such 5% limitation is calculated in
accordance with Xxxxxx Mae's anti-predatory lending
requirements as set forth in the Xxxxxx Xxx Guides and
"points and fees" (x) include origination, underwriting,
broker and finder fees and charges that the mortgagee
imposed as a condition of making the Mortgage Loan, whether
they are paid to the mortgagee or a third party, and (y)
exclude bona fide discount points, fees paid for actual
services rendered in connection with the origination of the
Mortgage Loan (such as attorneys' fees, notaries fees and
fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax
certifications, and home inspections), the cost of mortgage
insurance or credit-risk price adjustments, the costs of
title, hazard, and flood insurance policies, state
32
and local transfer taxes or fees, escrow deposits for the
future payment of taxes and insurance premiums, and other
miscellaneous fees and charges that, in total, do not exceed
0.25% of the principal amount of such Mortgage Loan. This
representation and warranty is a Deemed Material Breach
Representation;
(x) Fees Charges.
(xi) All fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be
collected in connection with the origination and servicing
of each Mortgage Loan has been disclosed in writing to the
Mortgagor in accordance with applicable state and federal
law and regulation. This representation and warranty is a
Deemed Material Breach Representation; and
(xii) Second Lien Mortgage Loans.
(xiii) With respect to each Second Lien Mortgage Loan:
(1) the related first lien Mortgage Loan does not permit
negative amortization; (2) where required or customary in
the jurisdiction in which the Mortgaged Property is located,
the original lender has filed for record a request for
notice of any action by the related senior lienholder, and
the Seller has notified such second lienholder in writing of
the existence of the Second Lien Mortgage Loan and requested
notification of any action to be taken against the Mortgagor
by such senior lienholder; either (a) no consent for the
Second Lien Mortgage Loan is required by the holder of the
related first lien Mortgage Loan or (b) such consent has
been obtained and is contained in the related Mortgage File;
(3) to the best of Seller's knowledge, the related first
lien Mortgage Loan is in full force and effect, and there is
no default, lien, breach, violation or event which would
permit acceleration existing under such first lien Mortgage
Loan or Mortgage Note, and no event which, with the passage
of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation
or event which would permit acceleration under such first
lien Mortgage Loan; (4) the related first lien Mortgage
contains a provision which provide for giving notice of
default or breach to the mortgagee under the Mortgage Loan
and allows such mortgagee to cure any default under the
related first lien Mortgage; and (5) the related Mortgaged
Property was the Mortgagor's principal residence at the time
of the origination of the such Second Lien Mortgage Loan.
This representation and warranty is a Deemed Material Breach
Representation.
Section 3.3. Repurchase.
It is understood and agreed that the representations and warranties set forth
in Sections 3.1 and 3.2 shall survive the sale of the Mortgage Loans to the
Purchaser and the delivery of the
33
Mortgage Loan Documents to the Custodian and shall inure to the benefit of the
Purchaser notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Upon discovery by either the Company or the
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.
Within 90 days of the earlier of either discovery by or notice to the Company
of any breach of a representation or warranty which materially and adversely
affects the value of the Mortgage Loans, (i) the Company shall use its best
efforts promptly to cure such breach in all material respects and (ii) if such
breach cannot be cured, the Company shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Repurchase Price. Notwithstanding the
above sentence, (i) within sixty (60) days of the earlier of either discovery
by, or notice to, the Company of any breach of the representation and warranty
set forth in clause (xlv) of Section 3.2, the Company shall repurchase such
Mortgage Loan at the Repurchase Price, together with all expenses incurred by
the Purchaser as a result of such repurchase and (ii) any breach of a Deemed
Material Breach Representation shall automatically be deemed to materially and
adversely affect the value of the Mortgage Loan and the interest of the
Purchaser therein. In the event that a breach shall involve any representation
or warranty set forth in Section 3.1, and such breach cannot be cured within
ninety (90) days of the earlier of either discovery by or notice to the
Company of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Company at the Repurchase Price. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Section 3.3 shall be accomplished by deposit in the Custodial Account of the
amount of the Repurchase Price as required in Section 4.4, for distribution to
Purchaser on the Remittance Date for the month following the date of the
repurchase, after deducting therefrom any amount received in respect of such
repurchased Mortgage Loan or Loans and being held in the Custodial Account for
future distribution for application in accordance with Section 5.1.
At the time of repurchase, the Purchaser and the Company shall arrange for the
reassignment of the repurchased Mortgage Loans to the Company and the delivery
to the Company of any documents held by the Custodian relating to the
repurchased Mortgage Loans. In the event of a repurchase, the Company shall,
simultaneously with such reassignment, give written notice to the Purchaser
that such repurchase has taken place and amend the Mortgage Loan Schedule to
reflect the withdrawal of the repurchased Mortgage Loans from this Agreement.
In addition to such repurchase obligation, the Company shall indemnify the
Purchaser and hold it harmless against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and other costs and expenses resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the
Company's representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.3 to cure or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 3.3,
34
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Company relating to or arising out of the
breach of any representations and warranties made in Sections 3.1 and 3.2
shall accrue as to any Mortgage Loan upon the earliest of (i) discovery of
such breach by the Company or the Purchaser or notice thereof by the Purchaser
to the Company, (ii) failures by the Company to cure such breach or repurchase
such Mortgage Loan as specified above, and (iii) demand upon the Company by
the Purchaser for compliance with this Agreement.
ARTICLE IV.
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.1. Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer the
Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a third party servicing provider, to do any and all
things in connection with such servicing and administration which the Company
may deem necessary or desirable, consistent with the terms of this Agreement
and with Accepted Servicing Practices.
Consistent with the terms of this Agreement and subject to the REMIC
Provisions if the Mortgage Loans have been transferred to a REMIC, the Company
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Company's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Purchaser. In the event of any such modification
which permits the deferral of interest or principal payments on any Mortgage
Loan, the Company shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment
has been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 5.3, the difference between (a) such month's principal
and one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Company shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 5.3.
Without limiting the generality of the foregoing, the Company shall continue,
and is hereby authorized and empowered, to execute and deliver on behalf of
itself and the Purchaser, all instruments of satisfaction or cancellation, or
of partial or full release, discharge and all other comparable instruments,
with respect to the Mortgage Loans and with respect to the Mortgaged
Properties. If reasonably required by the Company, the Purchaser shall furnish
the Company with any powers of attorney and other documents necessary or
appropriate to enable the Company to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Company shall employ
procedures (including collection procedures) and exercise the same care that
it customarily employs and exercises in servicing and administering mortgage
loans for its own account, giving due
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consideration to Accepted Servicing Practices where such practices do not
conflict with the requirements of this Agreement, and the Purchaser's reliance
on the Company.
Section 4.2. Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.1 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the Company shall take such action as (1) the Company would take under
similar circumstances with respect to a similar mortgage loan held for its own
account for investment, (2) shall be consistent with Accepted Servicing
Practices, and (3) the Company shall determine prudently to be in the best
interest of Purchaser. In the event that any payment due under any Mortgage
Loan is not postponed pursuant to Section 4.1 and remains delinquent for a
period of 30 days or any other default continues for a period of 30 days
beyond the expiration of any grace or cure period, the Company shall commence
foreclosure proceedings, the Company shall notify the Purchaser in writing of
the Company's intention to do so, and the Company shall not commence
foreclosure proceedings if the Purchaser objects to such action within ten
(10) Business Days of receiving such notice. In the event the Purchaser
objects to such foreclosure action, the Company shall not be required to make
Monthly Advances with respect to such Mortgage Loan, pursuant to Section 5.3,
and the Company's obligation to make such Monthly Advances shall terminate on
the 90th day referred to above. In such connection, the Company shall from its
own funds make all necessary and proper Servicing Advances, provided, however,
that the Company shall not be required to expend its own funds in connection
with any foreclosure or towards the restoration or preservation of any
Mortgaged Property, unless it shall determine (a) that such preservation,
restoration and/or foreclosure will increase the proceeds of liquidation of
the Mortgage Loan to the Purchaser after reimbursement to itself for such
expenses and (b) that such expenses will be recoverable by it either through
Liquidation Proceeds (respecting which it shall have priority for purposes of
withdrawals from the Custodial Account pursuant to Section 4.5) or through
Insurance Proceeds (respecting which it shall have similar priority).
Notwithstanding anything to the contrary contained herein, in connection with
a foreclosure or acceptance of a deed in lieu of foreclosure, in the event the
Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Company to proceed with foreclosure
or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of
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foreclosure and any related environmental clean up costs, as applicable, from
the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to
be reimbursed from amounts in the Custodial Account pursuant to Section 4.5
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall
be reimbursed for all Servicing Advances made with respect to the related
Mortgaged Property from the Custodial Account pursuant to Section 4.5 hereof.
Section 4.3. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Company shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable in accordance with Accepted Servicing Practices, and
shall, in accordance with RESPA and applicable state law, take special care in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loan and the Mortgaged
Property, to the end that the installments payable by the Mortgagors will be
sufficient to pay such charges as and when they become due and payable.
Section 4.4. Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received pursuant
to a Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Custodial Accounts, in the
form of time deposit or demand accounts, titled "National City Mortgage Co.,
in trust for the Purchaser of Residential Mortgage Loans serviced under a Flow
Seller's Warranties and Servicing Agreement, dated as of May 1, 2003", or as
otherwise directed in writing by the Purchaser or its assigns after the
Closing Date in connection with any Whole Loan Transfer or Securitization
Transaction. The Custodial Account shall be established with a Qualified
Depository. Upon request of the Purchaser and within ten (10) days thereof,
the Company shall provide the Purchaser with written confirmation of the
existence of such Custodial Account. Any funds deposited in the Custodial
Account shall at all times be insured to the fullest extent allowed by
Applicable Law. Funds deposited in the Custodial Account may be drawn on by
the Company in accordance with Section 4.5.
The Company shall deposit in the Custodial Account within one Business Day (or
two Business Days in the case of the amounts described in clauses (iii)
through (v) below) of the Company's receipt, and retain therein, the following
collections received by the Company and payments made by the Company after
each Cut-off Date, other than payments of principal and interest due on or
before such Cut-off Date:
(1) all payments on account of principal on the
Mortgage Loans, including all Principal Prepayments, but not
including Payaheads;
(2) all payments on account of interest on the
Mortgage Loans, adjusted to the Mortgage Loan Remittance Rate;
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(3) all Liquidation Proceeds;
(4) all Insurance Proceeds including amounts
required to be deposited pursuant to Section 4.10 (other than
proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 4.14), Section 4.11 and
Section 4.15;
(5) all Condemnation Proceeds which are not
applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with Section 4.14;
(6) any amount required to be deposited in the
Custodial Account pursuant to Section 4.1, 5.1, 5.3, 6.1 or 6.2;
(7) any amounts payable in connection with the
repurchase of any Mortgage Loan pursuant to Section 2.3, 3.3 or
6.2;
(8) with respect to each Principal Prepayment
including, for this purpose, the principal portion of Insurance
Proceeds, Condemnation Proceeds, and Liquidation Proceeds an
amount (to be paid by the Company out of its own funds, but not in
excess of its aggregate Servicing Fee for the related Due Period)
which, when added to all amounts allocable to interest received in
connection with the Principal Prepayment, equals one month's
interest on the amount of principal so prepaid at the Mortgage
Loan Remittance Rate;
(9) any amounts required to be deposited by the
Company pursuant to Section 4.11 in connection with the deductible
clause in any blanket hazard insurance policy; and
(10) any amounts received with respect to or
related to any REO Property and all REO Disposition Proceeds
pursuant to Section 4.16.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 6.1, need not be
deposited by the Company into the Custodial Account. Any interest paid on
funds deposited in the Custodial Account by the depository institution shall
accrue to the benefit of the Company and the Company shall be entitled to
retain and withdraw such interest from the Custodial Account pursuant to
Section 4.5. The Company shall reimburse the Custodial Account for any losses
incurred as a result of the investment of amounts on deposit in the Custodial
Account.
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Section 4.5. Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(1) to make payments to the Purchaser in the
amounts and in the manner provided for in Section 5.1;
(2) to reimburse itself for Monthly Advances of
the Company's funds made pursuant to Section 5.3, the Company's
right to reimburse itself pursuant to this subclause (2) being
limited to amounts received on the related Mortgage Loan which
represent late payments of principal and/or interest respecting
which any such advance was made, it being understood that, in the
case of any such reimbursement, the Company's right thereto shall
be prior to the rights of the Purchaser, except that, where the
Company is required to repurchase a Mortgage Loan pursuant to
Section 2.3, 3.3 or 6.2, the Company's right to such reimbursement
shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to such sections and all other amounts
required to be paid to the Purchaser with respect to such Mortgage
Loan;
(3) to reimburse itself for unreimbursed
Servicing Advances, and for any unpaid Servicing Fees, the
Company's right to reimburse itself pursuant to this subclause (3)
with respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds
and such other amounts as may be collected by the Company from the
Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of Purchaser,
except that where the Company is required to repurchase a Mortgage
Loan pursuant to Section 2.3, 3.3 or 6.2, in which case the
Company's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to such
sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(4) to pay itself as servicing compensation any
interest on funds deposited in the Custodial Account;
(5) to reimburse itself for expenses incurred to
the extent reimbursable pursuant to Section 8.1;
(6) to pay any amount required to be paid
pursuant to Section 4.16 related to any REO Property, it being
understood that, in the case of any such expenditure or withdrawal
related to a particular REO Property, the amount of such
expenditure or withdrawal from the Custodial Account shall be
limited to amounts on deposit in the Custodial Account with
respect to the related REO Property;
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(7) to reimburse itself for any Servicing
Advances or REO expenses after liquidation of the Mortgaged
Property not otherwise reimbursed above;
(8) to reimburse the trustee with respect to any
Securitization Transaction for any unreimbursed Monthly Advances
or Servicing Advances made by the Trustee, as applicable, the
right to reimbursement pursuant to this subclause (8) with respect
to any Mortgage Loan being limited to related Liquidation
Proceeds, proceeds of REO Dispositions, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by
the Company from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of such
reimbursement, such trustee's right thereto shall be prior to the
rights of the Company to reimbursement under (2) and (3), and
prior to the rights of the Purchaser under (1);
(9) to remove funds inadvertently placed in the
Custodial Account by the Company; and
(10) to clear and terminate the Custodial
Account upon the termination of this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all interest earned on funds on
deposit in the Custodial Account. The Company may use such withdrawn funds
only for the purposes described in this Section 4.5.
Section 4.6. Establishment of and Deposits to Escrow Account.
The Company shall segregate and hold all funds collected and received pursuant
to a Mortgage Loan constituting Escrow Payments separate and apart from any of
its own funds and general assets and shall establish and maintain one or more
Escrow Accounts, in the form of time deposit or demand accounts, titled,
"National City Mortgage Co., in trust for the Purchaser under the Flow
Seller's Warranties and Servicing Agreement dated as of May 1, 2003 and/or
subsequent purchasers of Mortgage Loans." The Escrow Accounts shall be
established with a Qualified Depository, in a manner which shall provide
maximum available insurance thereunder. Upon request of the Purchaser and
within ten (10) days thereof, the Company shall provide the Purchaser with
written confirmation of the existence of such Escrow Account. Funds deposited
in the Escrow Account may be drawn on by the Company in accordance with
Section 4.7.
The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of the Company's receipt, and retain therein:
(1) 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;
40
(2) all amounts representing Insurance Proceeds
or Condemnation Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(3) all amounts representing proceeds of any
Primary Mortgage Insurance Policy.
The Company shall make withdrawals from the Escrow Account only to effect such
payments as are required under this Agreement, as set forth in Section 4.7.
The Company shall be entitled to retain any interest paid on funds deposited
in the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. To the extent
required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing
or that interest paid thereon is insufficient for such purposes.
Notwithstanding the forgoing, the Company shall be responsible to reimburse
the Purchaser for any losses incurred as a result of the investment of amounts
on deposit in the Escrow Account.
Section 4.7. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Company
only:
(1) to effect timely payments of ground rents,
taxes, assessments, water rates, mortgage insurance premiums,
condominium charges, fire and hazard insurance premiums or other
items constituting Escrow Payments for the related Mortgage;
(2) to reimburse the Company for any Servicing
Advances made by the Company pursuant to Section 4.8 with respect
to a related Mortgage Loan, but only from amounts received on the
related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(3) to refund to any Mortgagor any funds found
to be in excess of the amounts required under the terms of the
related Mortgage Loan;
(4) 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;
(5) for application to restoration or repair of
the Mortgaged Property in accordance with the procedures outlined
in Section 4.14;
(6) to pay to the Company, or any Mortgagor to
the extent required by law, any interest paid on the funds
deposited in the Escrow Account;
(7) to remove funds inadvertently placed in the
Escrow Account by the Company;
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(8) to apply the proceeds of Primary Mortgage
Insurance as if such proceeds were payments on, or Liquidation
Proceeds of, the related Mortgage Loan, as the case may be; and
(9) to clear and terminate the Escrow Account on
the termination of this Agreement.
Section 4.8. Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water
rates, sewer rents, and other charges which are or may become a lien upon the
Mortgaged Property and fire and hazard insurance coverage and shall obtain,
from time to time, all bills for the payment of such charges (including
renewal premiums) and shall effect payment thereof prior to the applicable
penalty or termination date, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility for
the timely payment of all such bills and shall effect timely payment of all
such charges irrespective of each Mortgagor's faithful performance in the
payment of same of the making of the Escrow Payments, and the Company shall
make advances from its own funds to effect such payments.
Section 4.9. Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time, upon prior written notice to
the Purchaser.
Section 4.10. Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by
an insurer acceptable to FNMA or FHLMC, against loss by fire, hazards of
extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, in an amount which is at least equal to the
lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan and (ii) the greater of (a) the outstanding principal balance of
the Mortgage Loan and (b) an amount such that the proceeds thereof shall be
sufficient to prevent the Mortgagor or the loss payee from becoming a
co-insurer. In the event a hazard insurance policy shall be in danger of being
terminated, or in the event the insurer shall cease to be acceptable to FNMA
or FHLMC, the Company shall notify the Purchaser and the related Mortgagor,
and shall use its best efforts, as permitted by Applicable Law, to obtain from
another Qualified Insurer a replacement hazard insurance policy substantially
and materially similar in all respects to the original policy. In no event,
however, shall a Mortgage Loan be without a hazard insurance policy at any
time, subject only to Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related Mortgaged Property was
located in an area identified by the Flood Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a
generally
42
acceptable insurance carrier acceptable to FNMA or FHLMC, in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended.
If a Mortgage is secured by a unit in a condominium project, the Company shall
verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current FNMA or FHLMC requirements, secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may
have a material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Company shall communicate and
consult with the Mortgagor with respect to the need for such insurance and
bring to the Mortgagor's attention the desirability of protection of the
Mortgaged Property.
All policies required hereunder shall name the Company as loss payee and shall
be endorsed with standard or union mortgagee clauses, without contribution,
which shall provide for at least 30 days prior written notice of any
cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to FNMA and FHLMC and are licensed to do
business in the jurisdiction in which the Mortgaged Property is located. The
Company shall determine that such policies provide sufficient risk coverage
and amounts, that they insure the property owner, and that they properly
describe the property address.
Pursuant to Section 4.4, any amounts collected by the Company under any such
policies (other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the related Mortgaged Property, or property
acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.5.
Section 4.11. Maintenance of Primary Mortgage Insurance Policy;
Claims.
With respect to each Mortgage Loan with a LTV in excess of 80%, the Company
shall, without any cost to the Purchaser, maintain or cause the Mortgagor to
maintain in full force and effect a Primary Mortgage Insurance Policy insuring
that portion of the Mortgage Loan in excess of a percentage in conformance
with FNMA and FHLMC requirements. The Company shall pay or shall cause the
Mortgagor to pay the premium thereon on a timely basis, at least until the LTV
of
43
such Mortgage Loan is reduced to 80%, or such amount as required by Applicable
Law, or such other amount as FNMA and FHLMC permits for cancellation of
mortgage insurance. In the event that such Primary Mortgage Insurance Policy
shall be terminated, the Company shall obtain from another insurer a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated Primary Mortgage Insurance Policy. If the insurer
shall cease to be a qualified insurer, the Company shall determine whether
recoveries under the Primary Mortgage Insurance Policy are jeopardized for
reasons related to the financial condition of such insurer, it being
understood that the Company shall in no event have any responsibility or
liability for any failure to recover under the Primary Mortgage Insurance
Policy for such reason. If the Company determines that recoveries are so
jeopardized, it shall notify the Purchaser and the Mortgagor, if required, and
obtain from another qualified insurer a replacement insurance policy. The
Company shall not take any action which would result in noncoverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Company would have been covered thereunder. In connection with
any assumption or substitution agreement entered into or to be entered into
pursuant to Subsection 6.1, the Company shall promptly notify the insurer
under the related Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
Primary Mortgage Insurance Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
such Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Company shall obtain a replacement Primary Mortgage Insurance
Policy as provided above.
In connection with its activities as servicer, the Company agrees to prepare
and present, on behalf of itself and the Purchaser, claims to the insurer
under any Primary Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such Primary Mortgage Insurance Policy and, in this regard,
to take such action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.6, any amounts collected by the Company under any Primary Mortgage
Insurance Policy shall be deposited in the Escrow Account, subject to
withdrawal pursuant to Section 4.7.
Section 4.12. Maintenance of Mortgage Impairment Insurance.
In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Company shall prepare and make any claims on the
blanket policy as deemed necessary by the Company in accordance with Accepted
Servicing Practices. Any amounts collected by the Company under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 4.5. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with Section
4.10, and there shall have been a loss which would have been covered by such
policy, the Company shall deposit in the Custodial Account at the time of such
loss the amount not otherwise payable under the blanket policy
44
because of such deductible clause, such amount to be deposited from the
Company's funds, without reimbursement therefor. Upon request of any
Purchaser, the Company shall cause to be delivered to such Purchaser a
certified true copy of such policy and a statement from the insurer thereunder
that such policy shall in no event be terminated or materially modified
without 30 days' prior written notice to such Purchaser.
Section 4.13. Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Company shall maintain with responsible companies, at its own expense, a
blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors
and Omissions Insurance Policy shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company against
losses in connection with the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.
No provision of this Section 4.13 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
amounts acceptable to FNMA or FHLMC. Upon the request of any Purchaser, the
Company shall cause to be delivered to such Purchaser a certified true copy of
such fidelity bond and insurance policy and a statement from the surety and
the insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 4.14. Inspections.
If any Mortgage Loan is more than 75 days delinquent, the Company or its agent
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
written report of each such inspection.
Section 4.15. Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to releasing
any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied
to the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. For claims greater than $15,000,
at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
(i) The Company shall receive satisfactory independent
verification of completion of repairs and issuance of any
required approvals with respect thereto;
45
(ii) the Company shall take all steps necessary to
preserve the priority of the lien of the Mortgage,
including, but not limited to requiring waivers with respect
to mechanics' and materialmen's liens;
(iii) the Company shall verify that the Mortgage Loan
is not in default; and
(iv) pending repairs or restoration, the Company shall
place the Insurance Proceeds or Condemnation Proceeds in the
Escrow Account.
If the Purchaser is named as an additional loss payee, the Company is hereby
empowered to endorse any loss draft issued in respect of such a claim in the
name of the Purchaser.
Section 4.16. Claims.
In connection with its activities as servicer, the Company agrees to prepare
and present, on behalf of itself and the Purchaser, claims to the insurer in a
timely fashion and, in this regard, to take such action as shall be necessary
to permit recovery respecting a defaulted Mortgage Loan. Pursuant to Section
4.4, any amounts collected by the Company under any guaranty shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
4.5.
Section 4.17. Title, Management and Disposition of REO Property.
In the event that title to any Mortgaged Property is acquired in foreclosure
or by deed in lieu of foreclosure, the deed or certificate of sale shall be
taken in the name of the Company, or in the event the Company 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, or the perfection of
the ownership or security interest of the Purchaser in such REO Property would
be adversely effected, the deed or certificate of sale shall be taken in the
name of such Person or Persons as shall be consistent with an Opinion of
Counsel obtained by the Company from any attorney duly licensed to practice
law in the state where the REO Property is located. The Person or Persons
holding such title other than the Purchaser shall acknowledge in writing that
such title is being held as nominee for the Purchaser.
The Company shall manage, conserve, protect and operate each REO Property for
the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same
(and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the
Company deems to be in the best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property as soon
as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless (i) a REMIC election
has not been made with respect to the arrangement under
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which the Mortgage Loans and the REO Property are held, and (ii) the Company
determines, and gives an appropriate notice to the Purchaser to such effect,
that a longer period is necessary for the orderly liquidation of such REO
Property; provided however, that the Company agrees not to sell or dispose of
any such Mortgage Loan to a person who acquires such Mortgage Loan using a
purchase money mortgage. If a period longer than one year is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Company
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property.
The Company shall also maintain on each REO Property fire and hazard insurance
with extended coverage in an amount which is at least equal to the maximum
insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Company at such
price, and upon such terms and conditions, as the Company deems to be in the
best interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter the expenses of such sale shall be paid and the Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.3. On the
Remittance Date immediately following the Principal Prepayment Period in which
such sale proceeds are received the net cash proceeds of such sale remaining
in the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw 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 Section 4.10 and the fees
of any managing agent of the Company, or the Company itself. The Company shall
make monthly distributions on each Remittance Date to the Purchaser of the net
cash flow from the REO Property (which shall equal the revenues from such REO
Property net of the expenses described in the Section 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 4.18. Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 5.2, the Company
shall furnish to the Purchaser on or before the Remittance Date each month a
statement with respect to any REO Property covering the operation of such REO
Property for the previous month and the Company's efforts in connection with
the sale of such REO Property and any rental of such REO Property incidental
to the sale thereof for the previous month. That statement shall be
accompanied by such other information as the Purchaser shall reasonably
request.
Section 4.19. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition thereof
by the Purchaser pursuant to a deed in lieu of foreclosure, the Company shall
submit to the Purchaser a liquidation report with respect to such Mortgaged
Property.
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Section 4.20. Reports of Foreclosures and Abandonments of
Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property, the
Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code. The Company shall file information reports with
respect to the receipt of mortgage interest received in a trade or business
and information returns relating to cancellation of indebtedness income with
respect to any Mortgaged Property as required by the Code. Such reports shall
be in form and substance sufficient to meet the reporting requirements imposed
by the Code.
Section 4.21. Fair Credit Reporting Act.
For each Mortgage Loan, the Servicer shall furnish, in accordance with the
Fair Credit Reporting Act and its implementing regulations, accurate and
complete information (e.g., favorable and unfavorable) on its borrower credit
files, to Equifax, Experian, and Trans Union Credit Information Company, or
their successors, on a monthly basis. The Servicer shall provide evidence of
such monthly reporting to the Purchaser upon request.
ARTICLE V.
PAYMENTS TO PURCHASER
Section 5.1. Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net
of charges against or withdrawals from the Custodial Account pursuant to
Section 4.5), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.3, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment
Period which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the
Custodial Account in connection with such Principal Prepayment in accordance
with Section 4.4(viii); 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 of the Remittance Date.
With respect to any remittance received by the Purchaser after the date on
which such payment was due, the Company shall pay to the Purchaser interest on
any such late payment at an annual rate equal to the Prime Rate, adjusted as
of the date of each charge, plus two percentage points, but in no event
greater than the maximum amount permitted by Applicable Law. Such interest
shall be deposited in the Custodial Account by the Company on the date such
late payment is made and shall cover the period commencing with the day
following such second Business Day and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along
with the distribution payable on the next succeeding Remittance Date. The
payment by the Company of any such interest shall not be deemed an extension
of time for payment or a waiver of any Event of Default by the Company.
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Section 5.2. Statements to Purchaser.
Not later than the Remittance Advice Date, the Company shall furnish to the
Purchaser a Monthly Remittance Advice, including the information set forth in
Exhibit E attached hereto, with a trial balance report attached thereto, as to
the period ending on the last day of the preceding month, in a form to be
agreed upon by the Purchaser and the Company.
Section 5.3. Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the Company
shall deposit in the Custodial Account from its own funds or from amounts held
for future distribution an amount equal to all Monthly Payments (with interest
adjusted to the Mortgage Loan Remittance Rate) which were due on the Mortgage
Loans during the applicable Due Period and which were delinquent at the close
of business on the Determination Date immediately preceding such Remittance
Date or which were deferred pursuant to Section 4.1. Any amounts held for
future distribution and so used shall be replaced by the Company by deposit in
the Custodial Account on or before any future Remittance Date if funds in the
Custodial Account on such Remittance Date shall be less than payments to the
Purchaser required to be made on such Remittance Date. The Company shall have
the right to deduct delinquent payments from amounts held for future
distribution as long as the Company, its parent, or their respective
successors hereunder has a long-term credit rating of at least "A" by Fitch,
Inc. (doing business as Fitch Ratings), "A" by Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc., and "A2" by Xxxxx'x
Investors Service, Inc. If the long-term credit rating of the Company, its
parent, or their respective successors hereunder are at any time below the
ratings set forth in the directly preceding sentence, the Company shall no
longer be permitted to make any advances from amounts held for future
distribution, and instead shall be required to make all advances from its own
funds. The Company's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the last Monthly Payment due prior to the
payment in full of the Mortgage Loan, or through the earlier of: (i) the last
Remittance Date prior to the Remittance Date for the distribution of all
Liquidation Proceeds and other payments or recoveries (including Insurance
Proceeds and Condemnation Proceeds) with respect to the Mortgage Loan and (ii)
the Remittance Date prior to the date the Mortgage Loan is converted to REO
Property, provided, however, that if requested by a Rating Agency in
connection with a Securitization Transaction, the Company shall be obligated
to make such advances through the Remittance Date prior to the date on which
cash is received in connection with the liquidation of REO Property; provided,
however, that such obligation shall cease if the Company determines, in its
sole reasonable opinion, that advances with respect to such Mortgage Loan are
non-recoverable by the Company from Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds, or otherwise with respect to a particular Mortgage
Loan. In the event that the Company determines that any such advances are
non-recoverable, the Company shall provide the Purchaser with a certificate
signed by two officers of the Company evidencing such determination.
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ARTICLE VI.
GENERAL SERVICING PROCEDURES
Section 6.1. Transfers of Mortgaged Property.
The Company shall use its best efforts to enforce any "due-on-sale" provision
contained in any Mortgage or Mortgage Note and to deny assumption by the
person to whom the Mortgaged Property has been or is about to be sold whether
by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to
the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that the Company shall not exercise
such rights if prohibited by law from doing so.
If the Company reasonably believes it is unable under Applicable Law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the person to whom such property
has been conveyed, pursuant to which such person becomes liable under the
Mortgage Note and the original Mortgagor remains liable thereon or (ii) in the
event the Company is unable under Applicable Law to require that the original
Mortgagor remain liable under the Mortgage Note and the Company has the prior
consent of the primary mortgage guaranty insurer, a substitution of liability
agreement with the purchaser of the Mortgaged Property pursuant to which the
original Mortgagor is released from liability and the purchaser of the
Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. If an assumption fee is collected by the Company for entering
into an assumption agreement the fee will be retained by the Company as
additional servicing compensation. In connection with any such assumption,
neither the Mortgage Interest Rate borne by the related Mortgage Note, the
term of the Mortgage Loan, the outstanding principal amount of the Mortgage
Loan nor any other material terms shall be changed without Purchaser's
consent.
To the extent that any Mortgage Loan is assumable, the Company shall inquire
diligently into the credit worthiness of the proposed transferee, and shall
use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loans. If the credit of the proposed transferee does
not meet such underwriting criteria, the Company diligently shall, to the
extent permitted by the Mortgage or the Mortgage Note and by Applicable Law,
accelerate the maturity of the Mortgage Loan.
Section 6.2. Satisfaction of Mortgages and Release of Mortgage
Files.
Upon the payment in full of any Mortgage Loan, the Company shall notify the
Purchaser in the Monthly Remittance Advice as provided in Section 5.2, and may
request the release of any Mortgage Loan Documents.
If the Company satisfies or releases a Mortgage without first having obtained
payment in full of the indebtedness secured by the Mortgage or should the
Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit
thereof in the Custodial Account within 2 Business Days of receipt of such
demand by the
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Purchaser. The Company shall maintain the Fidelity Bond and Errors and
Omissions Insurance Policy as provided for in Section 4.12 insuring the
Company against any loss it may sustain with respect to any Mortgage Loan not
satisfied in accordance with the procedures set forth herein.
Section 6.3. Servicing Compensation.
As compensation for its services hereunder, the Company shall be entitled to
withdraw from the Custodial Account or to retain from interest payments on the
Mortgage Loans the amount of its Servicing Fee. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same unpaid
scheduled principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is computed. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and payable solely from, the
interest portion of such Monthly Payments.
Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.1, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled
to reimbursement thereof except as specifically provided for herein.
Section 6.4. Annual Statement as to Compliance.
The Company shall deliver to the Purchaser on or before March 15 each year,
beginning March 15, 2006, an Officer's Certificate, stating that (i) a review
of the activities of the Company during the preceding calendar year and of
performance under this Agreement has been made under such officer's
supervision, and (ii) the Company has complied with the provisions of this
Agreement or similar agreements, and (iii) to the best of such officer's
knowledge, based on such review, the Company has fulfilled all its obligations
under this Agreement or similar agreements throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof and the
action being taken by the Company to cure such default.
Section 6.5. Annual Independent Public Accountants' Servicing
Report.
On or before March 15 of each year beginning March 15, 2006, the Company, at
its expense, shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to each Purchaser to the effect that such firm has examined certain
documents and records relating to the servicing of the mortgage loans similar
in nature and that such firm is of the opinion that the provisions of this or
similar agreements have been complied with, and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement. By providing Purchaser a copy of a Uniform Single Attestation
Program Report from their independent public accountant's on an annual basis,
the Company shall be considered to have fulfilled its obligations under this
Section 6.5.
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Section 6.6. Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and audit any
and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own travel expenses associated
with such examination.
Section 6.7. Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under which
the Mortgage Loans and REO Property are held, the Company shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (i) endanger the status of the REMIC as a
REMIC or (ii) result in the imposition of a tax upon the REMIC (including but
not limited to the tax on "prohibited transactions" as defined Section
860G(a)(2) of the Code and the tax on "contributions" to a REMIC set forth in
Section 860(D) of the Code) unless the Company has received an Opinion of
Counsel (at the expense of the party seeking to take such action) to the
effect that the contemplated action will not endanger such REMIC status or
result in the imposition of any such tax.
ARTICLE VII.
COMPANY TO COOPERATE
Section 7.1. Provision of Information.
During the term of this Agreement, the Company shall furnish to the Purchaser
such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not
provided for herein as shall be necessary, reasonable, or appropriate with
respect to the Purchaser or any regulatory agency will be provided at the
Purchaser's expense. All such reports, documents or information shall be
provided by and in accordance with all reasonable instructions and directions
which the Purchaser may give.
The Company shall execute and deliver all such instruments and take all such
action as the Purchaser may reasonably request from time to time, in order to
effectuate the purposes and to carry out the terms of this Agreement.
Section 7.2. Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two fiscal years for which such a
statement is available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on
behalf of the
52
Company (and are available upon request to members or stockholders of the
Company or to the public at large).
The Company also shall make available to the Purchaser or prospective
Purchaser, within a reasonable period after request, a knowledgeable financial
or accounting officer for the purpose of answering questions respecting recent
developments affecting the Company or the financial statements of the Company,
and to permit any prospective Purchaser to inspect the Company's servicing
facilities for the purpose of satisfying such prospective Purchaser that the
Company has the ability to service the Mortgage Loans as provided in this
Agreement.
ARTICLE VIII.
THE COMPANY
Section 8.1. Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it harmless against any and
all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Purchaser may sustain in any way related to the failure
of the Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all costs, fees or expenses advanced by it pursuant
to this paragraph except when the claim in any way results from, relates to or
arises out of any liability, obligation, act or omission of the Company,
including without limitation, the Company's indemnification obligation under
Section 3.3 and this Section 8.1, any repurchase obligation of the Company
hereunder including Sections 2.3, 3.3 and 6.2, or the failure of the Company
to service and administer the Mortgage Loans and otherwise perform its
obligations hereunder in strict compliance with the terms of this Agreement.
Section 8.2. Merger or Consolidation of the Company.
The Company 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 corporation in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided,
however, that the
53
successor or surviving Person shall be an institution which is a
FNMA/FHLMC-approved company in good standing. Furthermore, in the event the
Company transfers or otherwise disposes of all or substantially all of its
assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of
the Company's obligations and liabilities hereunder.
Section 8.3. Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or agents of
the Company shall be under any liability to the Purchaser for any action taken
or for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Company or any such person against any breach of
warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expense or liability, provided, however, that
the Company may, with the consent of the Purchaser, undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the Company shall be
entitled to reimbursement from the Purchaser of the reasonable legal expenses
and costs of such action.
Section 8.4. Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and subsequent
Purchasers will purchase the Mortgage Loans in reliance upon the independent
status of the Company, and the representations as to the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing hereunder, nor
delegate its rights or duties hereunder or any portion hereof, nor sell or
otherwise dispose of all of its property or assets without the prior written
consent of the Purchaser, which consent shall not be unreasonably withheld.
The Company shall not resign from the obligations and duties hereby imposed on
it except by mutual consent of the Company and the Purchaser or upon the
determination that its duties hereunder are no longer permissible under
Applicable Law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by
an Opinion of Counsel to such effect delivered to the Purchaser which Opinion
of Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.1.
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Without in any way limiting the generality of this Section 8.4, in the event
that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof; or sell or otherwise dispose of all or substantially all of its
property or assets without the prior written consent of the Purchaser, then
the Purchaser shall have the right to terminate this Agreement upon notice
given as set forth in Section 10.1, without any payment of any penalty or
damages and without any liability whatsoever to the Company or any third
party.
ARTICLE IX.
SECURITIZATION TRANSACTION
Section 9.1. Removal of Mortgage Loans from Inclusion Under this
Agreement Upon a Securitization Transaction.
The Purchaser and the Company agree that with respect to some or all of the
Mortgage Loans, the Purchaser, at its sole option, shall effect up to four
Whole Loan Transfers or Securitization Transactions per pool of Mortgage
Loans, each such pool of Mortgage Loans to include ten (10) or more Mortgage
Loans unless otherwise agreed to by the Purchaser and the Company, retaining
the Company as the Servicer thereof or subservicer if a master servicer is
employed, or as applicable the "seller/servicer". From and after the
Reconstitution Date, the Mortgage Loans transferred shall remain covered by
this Agreement, insofar as the Company shall continue to service such Mortgage
Loans on behalf of the Purchaser in accordance with the terms and provisions
of this Agreement.
The Company shall cooperate with the Purchaser in connection with each Whole
Loan Transfer or Securitization Transaction in accordance with this Section
9.1. In connection therewith the Company shall:
(a) make all representations and warranties with respect to the
Mortgage Loans as of the related Closing Date and with respect to the
Company itself as of the closing date of each Whole Loan Transfer or
Securitization Transaction;
(b) negotiate in good faith and execute any seller/servicer
agreements required by the shelf registrant to effectuate the foregoing
provided such agreements create no greater obligation or cost on the
part of the Company than otherwise set forth in this Agreement;
(c) cooperate with the Purchaser, the depositor and the trustee to
satisfy, in connection with any Securitization Transaction, the
applicable trust's reporting obligations under the Exchange Act and
Applicable Law;
(d) represent to the Purchaser, the depositor, the trustee, and
the initial purchaser of the securities issued in connection with any
Securitization Transaction that: (1) that the Company has serviced the
Mortgage Loans in accordance with the terms of this Agreement, and has
otherwise complied with all covenants and obligations hereunder, and (2)
that the Company has taken no action that would, nor omitted to take any
required action the omission of which would, have the effect of
impairing the
55
mortgage insurance or guarantee on the Mortgage Loans. The Company also
agrees to represent as to the accuracy of any information provided to
the Purchaser by the Company for inclusion in any prospectus supplement,
offering memorandum or term sheet prepared in connection with any
Securitization Transactions;
(e) deliver an opinion of counsel (which can be an opinion of
in-house counsel to the Company) reasonably acceptable to the Purchaser;
provided that any out-of-pocket, third party expenses incurred by the
Company in connection with the foregoing shall be paid by the Purchaser;
(f) provide as applicable:
(i) any and all information and appropriate
verification of information which may be reasonably available to
the Company, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall request;
(ii) (x) the Company Certification executed by a
senior officer of the Company responsible for the servicing of the
Mortgage Loans; and (y) such additional statements, certificates
or other similar documents of the Company or reports from the
Company's accountants in connection with a Securitization
Transaction and in substance as required by Applicable Law; and
(iii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors,
financial description of the Company as servicer for inclusion in
any offering memorandum to be distributed to potential investors
in connection with a Securitization Transaction with respect to
the Mortgage Loans, and certificates of public officials or
officers of the Company as are reasonably believed necessary by
the trustee, any Rating Agency, the Purchaser, as the case may be,
in connection with such Whole Loan Transfers or Securitization
Transactions. The Purchaser shall pay all third party costs
associated with the preparation of such information. The Company
shall execute any seller/servicer agreements required within a
reasonable period of time after receipt of such seller/servicer
agreements which time shall be sufficient for the Company and
Company's counsel to review such seller/servicer agreements. Under
this Agreement, the Company shall retain a servicing fee at a rate
per annum equal to no less than 0.25% per Mortgage Loan; and
(g) indemnify the Purchaser for any material misstatements
contained in the information provided pursuant to (d) or (f) above.
In the event the Purchaser has elected to have the Company hold record title
to the Mortgages, prior to the Reconstitution Date and after the related
Closing Date the Company shall prepare an Assignment in blank or, at the
option of the Purchaser, to the trustee from the Company (to the extent such
Assignment has not been prepared on or before such Closing Date) acceptable to
the trustee for each Mortgage Loan that is part of the Whole Loan Transfers or
Securitization Transactions. The Purchaser shall pay all preparation and
recording costs associated therewith.
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The Company shall execute each Assignment, track such Assignments to ensure
they have been recorded and deliver them as required by the trustee upon the
Company's receipt thereof. Additionally, the Company shall prepare and
execute, at the direction of the Purchaser, any note endorsements in
connection with any and all seller/servicer agreements.
ARTICLE X.
DEFAULT
Section 10.1. Events of Default.
Each of the following shall constitute an Event of Default on the part of the
Company:
(i) any failure by the Company to remit to the
Purchaser any payment required to be made under the terms of
this Agreement which continues unremedied for a period of
three Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall
have been given to the Company by the Purchaser; or
(ii) failure by the Company duly to observe or perform
in any material respect any other of the covenants or
agreements on the part of the Company set forth in this
Agreement which continues unremedied for a period of 30 days
after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Company by the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license
to do business in any jurisdiction where the Mortgaged
Property is located if such license is required; or
(iv) a decree or order of a court or agency or
supervisory authority having jurisdiction for the
appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings,
or for the winding-up or liquidation of its affairs, shall
have been entered against the Company and such degree or
order shall have remained in force undischarged or unstayed
for a period of 30 days; or
(v) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities
or similar proceedings of or relating to the Company or of
or relating to all or substantially all of its property; or
(vi) the Company shall admit in writing its inability
to pay its debts generally as they become due, file a
petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for
the benefit of its creditors, voluntarily suspend payment of
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its obligations or cease its normal business operations for
three Business Days; or
(vii) the Company ceases to meet the qualifications of
a FNMA/FHLMC servicer; or
(viii) the Company attempts to assign its right to
servicing compensation hereunder or to assign this Agreement
or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof in violation of
Section 8.4; or
(ix) the taking of any action by the Company, any
Company Employee, any Affiliate or any director or employee
thereof that constitutes fraud or criminal activity in the
performance of its obligations under this Agreement or the
indictment of any of the foregoing Persons for criminal
activity related to the mortgage origination or servicing
activities of the Company, in each case, where such
indictment materially and adversely affects the ability of
the Company to perform its obligations under this Agreement
(subject to the condition that such indictment is not
dismissed within 90 days).
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatever rights the Purchaser may have at law or
equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate with cause all
the rights and obligations of the Company under this Agreement and in and to
the Mortgage Loans and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and power of
the Company under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in the successor appointed pursuant
to Section 12.1. Upon written request from any Purchaser, the Company shall
prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such
successor's possession all Mortgage Files, and do or cause to be done all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents, at the
Company's sole expense. The Company shall cooperate with the Purchaser and
such successor in effecting the termination of the Company's responsibilities
and rights hereunder, including without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the Company to the Custodial Account or Escrow Account or
thereafter received with respect to the Mortgage Loans.
Section 10.2. Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been
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remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other default or impair any right consequent thereon except
to the extent expressly so waived.
ARTICLE XI.
TERMINATION
Section 11.1. Termination.
This Agreement shall terminate upon any of: (i) the later of the final payment
or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder, (ii) mutual
consent of the Company and the Purchaser in writing or (iii) termination
pursuant to Section 10.1, 11.2 or 11.3.
Section 11.2. Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company may
have hereunder, without cause, as provided in this Section 11.2. Any such
notice of termination shall be in writing and delivered to the Company and any
Rating Agency at least 30 days prior to the date of such termination by
registered mail as provided in Section 12.5.
The Company shall be entitled to receive, as such liquidated damages, upon its
termination as servicer hereunder without cause pursuant to this Section 11.2
an amount equal to 1.5% of the aggregate outstanding principal amount of the
Mortgage Loans as of the termination date paid by the Purchaser to the Company
with respect to all of the Mortgage Loans.
Section 11.3. Termination With Cause.
Notwithstanding any other provision hereof to the contrary, the Purchaser, at
its option, may terminate this Agreement, and any rights the Company may have
hereunder, with cause upon ten (10) Business Days' prior written notice. For
all purposes of determining "cause" with respect to termination of this
Agreement or the rights of the Company hereunder, such term shall mean,
without limitation, termination upon the occurrence of any Event of Default
hereunder which is not cured within any applicable cure period. In the event
of a termination of the Company for cause under this Section 11.3, no
liquidated damages shall be payable to the Company pursuant to Section 11.2.
ARTICLE XII.
MISCELLANEOUS PROVISIONS
Section 12.1. Successor to Company.
Prior to termination of the Company's responsibilities and duties under this
Agreement pursuant to Sections 8.4, 10.1 or 11.1, the Purchaser shall, (i)
succeed to and assume all of the Company's responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.2 and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Company
under this Agreement
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prior to the termination of Company's responsibilities, duties and liabilities
under this Agreement. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree. In the
event that the Company's duties, responsibilities and liabilities under this
Agreement should be terminated pursuant to the aforementioned sections, the
Company shall discharge such duties and responsibilities during the period
from the date it acquires knowledge of such termination until the effective
date thereof with the same degree of diligence and prudence which it is
obligated to exercise under this Agreement, and shall take no action
whatsoever that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of the Company pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 12.1 and shall in no event relieve the
Company of the representations and warranties made pursuant to Sections 3.1
and 3.2 and the remedies available to the Purchaser under Sections 2.3, 3.3
and 6.2, it being understood and agreed that the provisions of such Sections
2.3, 3.1, 3.2, 3.3 and 6.1 shall be applicable to the Company notwithstanding
any such sale, assignment, resignation or termination of the Company, or the
termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and
warranties set forth in Section 3.1, except for the portion of subsection (h)
relating to sale of the mortgage loans and all of subsections (j) and (l)
thereof, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Company or termination of this Agreement
pursuant to Section 8.4, 10.1, 11.1, 11.2 or 11.3 shall not affect any claims
that any Purchaser may have against the Company arising out of the Company's
actions or failure to act prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the funds in the
Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account
for all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in
the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Company.
Upon a successor's acceptance of appointment as such, the Company shall notify
by mail the Purchaser of such appointment in accordance with the procedures
set forth in Section 12.5.
Section 12.2. Amendment.
This Agreement may be amended from time to time by written agreement signed by
the Company and the Purchaser.
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Section 12.3. Governing Law.
This Agreement shall be construed in accordance with the laws of the State of
New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect or any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.
Section 12.4. Duration of Agreement.
This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser.
Section 12.5. Notices.
All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed
by registered mail, postage prepaid, addressed as follows:
(i) if to the Company:
National City Mortgage Co.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Case
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or such other address as may hereafter be furnished to the
Purchaser in writing by the Company;
(ii) if to Purchaser:
Xxxxxxx Sachs Mortgage Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx
Xx. Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as may hereafter be furnished to the Company
in writing by the Purchaser.
Section 12.6. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this
Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions
of this Agreement.
Section 12.7. Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a partnership
or joint venture between the parties hereto and the services of the Company
shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.8. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same agreement. Subject to Section 8.4, this
Agreement shall inure to the benefit of and be binding upon, and shall be
enforceable by, the Company and the Purchaser and their respective successors
and assigns, including without limitation, any trustee appointed by the
Purchaser with respect to any Whole Loan Transfer or Securitization
Transaction.
Section 12.9. Recordation of Assignments of Mortgage.
To the extent permitted by Applicable Law, each of the Assignments of Mortgage
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, which recordation shall have been
effected at the Company's expense in the event recordation is either necessary
under Applicable Law or requested by the Purchaser at its sole option.
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Section 12.10. Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company but
subject to the limit set forth in Section 2.2 hereof, to assign, in whole or
in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the
Purchaser hereunder, by executing an Assignment and Assumption Agreement
substantially in the form of Exhibit F hereto and the assignee or designee
shall accede to the rights and obligations hereunder of the Purchaser with
respect to such Mortgage Loans. All references to the Purchaser in this
Agreement shall be deemed to include its assignee or designee.
Section 12.11. Solicitation of Mortgagor.
The Purchaser, its affiliates, successors or assigns shall not, without the
prior written consent of the Company, take any action to solicit or make
direct contact with the Mortgagor under any Mortgage Loan except to the extent
required by the Company's breach of this Agreement or as required under
Applicable Law or regulatory authority. Notwithstanding any provision of this
Agreement to the contrary, in the event the Purchaser, its affiliates,
successors or assigns fails to obtain such written consent, the Company shall
be entitled, in its sole discretion, to terminate its obligations and duties
under this Agreement. Upon termination without cause of the servicing rights
and obligations under this Agreement and the transfer of such rights and
obligations to the Purchaser or Purchaser's designee, the Company shall be
entitled to receive damages as provided in Section 11.2.
The Company agrees that, after the Closing Date, it will not take any action
to solicit the refinancing of any Mortgage Loan. It is understood and agreed
that promotions undertaken by the Company or any affiliate of the Company
which are directed to the general public at large, including, without
limitation, mass mailings based upon commercially acquired mailing lists,
newspaper, radio, television advertisements or from servicing the refinancing
needs of a Mortgagor who, without solicitation, contacts Company in connection
with the refinance of such Mortgage or Mortgage Loan, shall not constitute
solicitation under this Section. Notwithstanding anything to the contrary,
this Section shall not prohibit the Company from soliciting any Mortgagor to
provide other services including but not limited to credit cards, insurance
investments and banking related services.
ARTICLE XIII.
COMPLIANCE WITH REGULATION AB
Section 13.1. Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose of
Article XIII of this Agreement is to facilitate compliance by the Purchaser
and any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB include provision of
63
comparable disclosure in private offerings to the extent that such comparable
disclosure becomes industry standard in similar transactions.
Neither the Purchaser nor any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the provisions of
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act) that are applicable to
any Securitization Transaction. The Company acknowledges that interpretations
of the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to cooperate in good faith with the Purchaser or any
Depositor, upon a request made in good faith, regarding the Company's delivery
of information under these provisions on the basis of evolving interpretations
of Regulation AB. In connection with any Securitization Transaction, the
Company shall cooperate as set forth herein with the Purchaser to deliver to
the Purchaser (including any of its assignees or designees) and any Depositor,
any and all statements, reports, certifications, records and any other
information necessary in the good faith determination of the Purchaser or any
Depositor to permit the Purchaser or such Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to the
Company, any Subservicer, any Third-Party Originator and the Mortgage Loans,
or the servicing of the Mortgage Loans, reasonably believed by the Purchaser
or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall cooperate
with the Company by providing timely notice of requests for information under
these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable good faith judgment, to comply with
Regulation AB.
Section 13.2. Additional Representations and Warranties of the Company.
(a) The Company shall be deemed to represent to the Purchaser and
to any Depositor, as of the date on which information is first provided
to the Purchaser or any Depositor under Section 13.03 that, except as
disclosed in writing to the Purchaser or such Depositor prior to such
date and unless otherwise disclosed in such information provided under
Section 13.03: (i) the Company is not aware and has not received notice
that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or
failure to act of the Company; (ii) the Company has not been terminated
as servicer in a residential mortgage loan securitization, either due to
a servicing default or to application of a servicing performance test or
trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage
loans involving the Company as servicer has been disclosed or reported
by the Company; (iv) no material changes to the Company's policies or
procedures with respect to the servicing function it will perform under
this Agreement and any Reconstitution Agreement for mortgage loans of a
type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the scheduled closing date of the related
Securitization
64
Transaction; (v) there are no aspects of the Company's financial
condition that could have a material adverse effect on the performance
by the Company of its servicing obligations under this Agreement or any
Reconstitution Agreement; (vi) there are no material legal or
governmental proceedings pending (or known to be contemplated by
government authorities) against the Company, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations,
relationships or transactions relating to the Company, any Subservicer
or any Third-Party Originator with respect to any Securitization
Transaction and any party thereto identified by the related Depositor of
a type described in Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the
Purchaser or any Depositor under Section 13.03, the Company shall, as
soon as practicable (and in no event more than 10 Business Days)
following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this
Section or, if any such representation and warranty is not accurate as
of the date of such request, provide reasonably adequate disclosure of
the pertinent facts, in writing, to the requesting party.
Section 13.3. Information to Be Provided by the Company.
In connection with any Securitization Transaction the Company shall (i) as
promptly as practicable (and in no event more than 10 Business Days) following
request by the Purchaser or any Depositor, provide to the Purchaser and such
Depositor (or, as applicable, cause each Third-Party Originator and each
Subservicer to provide), in writing, or in a mutually agreed upon electronic
format, and in form and substance reasonably satisfactory to the Purchaser and
such Depositor, the information and materials specified in paragraphs (a),
(b), (c) and (f) of this Section, and (ii) as promptly as practicable
following notice to or discovery by the Company, provide to the Purchaser and
any Depositor (in writing, or in a mutually agreed upon electronic format, and
in form and substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Company
shall provide (or cause each Third-Party Originator or Subservicer, as
applicable, to provide) such information, as mutually agreed upon by the
Purchaser or any Depositor and the Company (or such Third-Party
Originator or Subservicer, as applicable) such information regarding (i)
the Company, as originator of the Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified Correspondent), or (ii) each
Third-Party Originator, and (iii) as applicable, each Subservicer, as is
requested for the purpose of compliance with Items 1103(a)(1), 1105,
1110, 1117 and 1119 of Regulation AB. Such information shall include, at
a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential mortgage
loans, which description shall include a discussion of the originator's
experience in originating mortgage loans of
65
a similar type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and information
that may be material, in the reasonable good faith judgment of the
Purchaser or any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originators' credit-granting or
underwriting criteria for mortgage loans of similar type(s) as the
Mortgage Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance with Item
1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated by governmental
authorities) against the Company, each Third-Party Originator and each
Subservicer; and
(D) as promptly as practicable following notice to the Company
(and in no event more than 10 Business Days), a description of any
affiliation or relationship between the Company, each Third-Party
Originator, each Subservicer and any of the following parties to a
Securitization Transaction, as such parties are identified and noticed
to the Company by the Purchaser or any Depositor in writing in advance
of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Company
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of
a similar type as the Mortgage Loans, as reasonably identified by the
Purchaser as provided below) originated by (i) the Company, if the
Company is an originator of Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), and/or (ii) each
Third-Party Originator. Such Static Pool Information shall be prepared
by the Company (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Company (or Third-Party Originator) Static Pool
Information
66
with respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content of
such Static Pool Information may be in the form customarily provided by
the Company, and need not be customized for the Purchaser or any
Depositor. Such Static Pool Information for each vintage origination
year or prior securitized pool, as applicable, shall be presented in
increments no less frequently than quarterly over the life of the
mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a
date no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included
or incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or
other such electronic format as mutually agreed upon by the Purchaser or
the Depositor and the Company, as applicable.
Promptly following notice or discovery of a material error in Static Pool
Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Company shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same
format in which Static Pool Information was previously provided to such party
by the Company.
If so requested by the Purchaser or any Depositor, the Company shall provide
(or, as applicable, cause each Third-Party Originator to provide), at the
expense of the Purchaser or Depositor, as applicable (to the extent of any
additional incremental expense associated with delivery pursuant to this
Agreement), such agreed-upon procedures letters of certified public
accountants reasonably acceptable to the Purchaser or Depositor, as
applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in the case of Static Pool Information with respect to the Company's or
Third-Party Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such statements and letters shall be addressed to and be
for the benefit of such parties as the Purchaser or such Depositor shall
designate, which may include, by way of example, any Sponsor, any Depositor
and any broker dealer acting as underwriter, placement agent or initial
purchaser with respect to a Securitization Transaction, and shall also be
addressed to and for the benefit of the Company and such Third-Party
Originator; provided, however, that the procedures and work to be performed by
such certified public accountants shall not create an undue disruption or
burden on the business operations of the Company, unless such standards and
letters become standard in the industry for similar transactions. Any such
statement or letter may take the form of a standard, generally applicable
document accompanied by a reliance letter authorizing reliance by the
addressees designated by the Purchaser or such Depositor.
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(c) If so requested by the Purchaser or any Depositor, the Company
shall provide such information regarding the Company, as servicer of the
Mortgage Loans, and each Subservicer (each of the Company and each
Subservicer, for purposes of this paragraph, a "Servicer"), as is
requested for the purpose of compliance with Item 1108 of Regulation AB.
Such information shall include, at a minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more detailed
discussion of the Servicer's experience in, and procedures for, the
servicing function it will perform under this Agreement and any
Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer's portfolio of residential mortgage loans of
a type similar to the Mortgage Loans and information on factors related
to the Servicer that may be material, in the reasonable good faith
judgment of the Purchaser or any Depositor, to any analysis of the
servicing of the Mortgage Loans or the related asset-backed securities,
as applicable, including, without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to the Mortgage Loans involving
the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during
the three-year period immediately preceding the scheduled closing
date of the related Securitization Transaction;
(2) the extent of outsourcing the Servicer
utilizes;
(3) whether there has been previous disclosure
of material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year
period immediately preceding the scheduled closing date of the
related Securitization Transaction;
(4) whether the Servicer has been terminated as
servicer in a residential mortgage loan securitization, either due
to a servicing default or to application of a servicing
performance test or trigger; and
(5) such other information as the Purchaser or
any Depositor may reasonably request for the purpose of compliance
with Item 1108(b)(2) of Regulation AB;
(C) a description of any material changes during the three-year
period immediately preceding the scheduled closing date of the related
Securitization Transaction to the Servicer's policies or procedures with
respect to the servicing function it will perform under this Agreement
and any Reconstitution Agreements for mortgage loans of a type similar
to the Mortgage Loans;
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(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that the effect on one or more
aspects of servicing resulting from such financial condition could have
a material impact on pool performance or the performance by the Company
of its servicing obligations under this Agreement or any Reconstitution
Agreement;
(E) information regarding advances made by the Servicer on the
Mortgage Loans and the Servicer's overall servicing portfolio of
residential mortgage loans for the three-year period immediately
preceding the scheduled closing date of the related Securitization
Transaction, which may be limited to a statement by an authorized
officer of the Servicer to the effect that the Servicer has made all
advances required to be made on residential mortgage loans serviced by
it during such period, or, if such statement would not be accurate,
information regarding the percentage and type of advances not made as
required, and the reasons for such failure to advance;
(F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved in servicing
loans of a similar type as the Mortgage Loans;
(G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of defaulted mortgage loans or
workouts; and
(H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience.
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act
with respect to any class of asset-backed securities, the Company shall
upon discovery (or shall cause each Subservicer and Third-Party
Originator to so notify upon discovery) (i) notify the Purchaser and any
Depositor in writing of (A) any material litigation or governmental
proceedings pending against the Company, any Subservicer or any
Third-Party Originator, as applicable, and (B) any affiliations or
relationships that develop following the closing date of a
Securitization Transaction between the Company, any Subservicer or any
Third-Party Originator and any of the parties specified in clause (D) of
paragraph (a) of this Section (and any other parties identified in
writing by the requesting party) with respect to such Securitization
Transaction, and (ii) provide to the Purchaser and any Depositor a
description of such proceedings, affiliations or relationships.
(e) As a condition to the succession to the Company or any
Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Company or
such Subservicer may be merged or consolidated, or (ii) which may be
appointed as a successor to the Company or any Subservicer, the Company
shall provide to the Purchaser and any Depositor, at least 5 calendar
days prior
69
to the effective date of such succession or appointment, (x) written
notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser or any Depositor in order to
comply with its reporting obligation under Item 6.02 of Form 8-K with
respect to the related Securitization Transaction.
(f) In addition to such information as the Company, as servicer,
is obligated to provide pursuant to other provisions of this Agreement,
if so requested by the Purchaser or any Depositor, the Company shall
provide such information reasonably available to the Company regarding
the performance or servicing of the Mortgage Loans as is reasonably
required by the Purchaser or any Depositor to facilitate preparation of
distribution reports in accordance with Item 1121 of Regulation AB and
to permit the Purchaser or such Depositor to comply with the provisions
of Regulation AB relating to Static Pool Information regarding the
performance of the Mortgage Loans on the basis of the Purchaser's or
such Depositor's reasonable, good faith interpretation of the
requirements of Item 1105(a)(1)-(3) of Regulation AB (including without
limitation as to the format and content of such Static Pool
Information). Such information shall be provided concurrently with the
monthly reports otherwise required to be delivered by the Company under
this Agreement or in such other timeframe as Purchaser as reasonably
agreed to, commencing with the first such report due in connection with
the applicable Securitization Transaction.
Section 13.4. Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in 2007, the Company
shall deliver to the Purchaser and any Depositor a statement of compliance
addressed to the Purchaser and such Depositor and signed by an authorized
officer of the Company, to the effect that (i) a review of the Company's
activities as Servicer during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under this Agreement and
any applicable Reconstitution Agreement during such period has been made under
such officer's supervision, and (ii) to the best of such officers' knowledge,
based on such review, the Company has fulfilled all of its obligations under
this Agreement and any applicable Reconstitution Agreement in all material
respects throughout such calendar year (or applicable portion thereof) or, if
there has been a failure to fulfill any such obligation in any material
respect, specifically identifying each such failure known to such officer and
the nature and the status thereof.
Section 13.5. Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in
2007, the Company shall:
(i) deliver to the Purchaser and any Depositor a
report (in form and substance reasonably satisfactory to the
Purchaser and such Depositor) regarding the Company's
assessment of compliance with the Servicing Criteria during
the immediately preceding calendar year, as
70
required under Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor and signed by
an authorized officer of the Company, and shall address each
of the Servicing Criteria specified on a certification
substantially in the form of Exhibit K hereto delivered to
the Purchaser concurrently with the execution of this
Agreement;
(ii) deliver to the Purchaser and any Depositor a
report of a registered public accounting firm reasonably
acceptable to the Purchaser and such Depositor that attests
to, and reports on, the assessment of compliance made by the
Company and delivered pursuant to the preceding paragraph.
Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor
determined by the Company pursuant to Section 13.6(b) to be
"participating in the servicing function" within the meaning
of Item 1122 of Regulation AB, to deliver to the Purchaser
and any Depositor an assessment of compliance and
accountants' attestation as and when provided in paragraphs
(a) and (b) of this Section; and
(iv) If requested by the Purchaser or any Depositor
not later than February 1 of the calendar year in which such
certification is to be delivered, deliver to the Purchaser,
any Depositor and any other Person that will be responsible
for signing the certification (a "Sarbanes Certification")
required by Rules 13a-14(d) and 15d-14(d) under the Exchange
Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of
2002) on behalf of an asset-backed issuer with respect to a
Securitization Transaction a certification in the form
attached hereto as Exhibit H; provided that such
certification delivered by the Company may not be filed as
an exhibit to, or included in, any offering document or
registration statement unless required by law or regulation.
The Company acknowledges that the parties identified in clause (a)(iv) above
may rely on the certification provided by the Company pursuant to such clause
in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser nor any Depositor will request delivery of a
certification under clause (a)(iv) above, unless a Depositor is required under
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer
pursuant to Section 13.5(a)(i) shall address each of the Servicing
Criteria specified on a certification substantially in the form of
Exhibit K hereto delivered to the Purchaser concurrently with the
execution of this Agreement or, in the case of a Subservicer
subsequently appointed as such, on or prior to the date of such
appointment. An assessment of compliance
71
provided by a Subcontractor pursuant to Section 13.5(a)(iii) need not
address any elements of the Servicing Criteria other than those
specified by the Company pursuant to Section 13.6.
Section 13.6. Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
this Agreement or any Reconstitution Agreement unless the Company complies
with the provisions of paragraph (a) of this Section. The Company shall not
hire or otherwise utilize the services of any Subcontractor, and shall not
permit any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Company as servicer
under this Agreement or any Reconstitution Agreement unless the Company
complies with the provisions of paragraph (b) of this Section.
(a) It shall not be necessary for the Company to seek the consent
of the Purchaser or any Depositor to the utilization of any Subservicer.
The Company shall cause any Subservicer used by the Company (or by any
Subservicer) for the benefit of the Purchaser and any Depositor to
comply with the provisions of this Section and with Sections 13.2,
13.3(c) and (e), 13.4, 13.5 and 13.7 of this Agreement to the same
extent as if such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under Section
13.3(d) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by
such Subservicer under Section 13.4, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section
13.5 and any certification required to be delivered to the Person that
will be responsible for signing the Sarbanes Certification under Section
13.5 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent
of the Purchaser or any Depositor to the utilization of any
Subcontractor. The Company shall promptly upon request provide to the
Purchaser and any Depositor (or any designee of the Depositor, such as a
master servicer or administrator) a written description (in form and
substance satisfactory to the Purchaser and such Depositor) of the role
and function of each Subcontractor utilized by the Company or any
Subservicer, specifying (i) the identity of each such Subcontractor,
(ii) which (if any) of such Subcontractors are "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB,
and (iii) which elements of the Servicing Criteria will be addressed in
assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 13.5 and 13.7 of this
Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any
72
Depositor any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 13.5, in each case as and when
required to be delivered.
Section 13.7. Indemnification; Remedies.
(a) The Company shall indemnify the Purchaser, each affiliate of
the Purchaser, and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant
to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction; each broker dealer acting as
underwriter, placement agent or initial purchaser, each Person who
controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act);
and the respective present and former directors, officers, employees and
agents of each of the foregoing and of the Depositor, and shall hold
each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided in written or electronic
form under this Article XIII by or on behalf of the Company, or provided
under this Article XIII by or on behalf of any Subservicer,
Subcontractor or Third-Party Originator (collectively, the "Company
Information"), or (B) the omission or alleged omission to state in the
Company Information a material fact required to be stated in the Company
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph
shall be construed solely by reference to the Company Information and
not to any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or
separately from such other information;
(i) any failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or
other material when and as required under this Article XIII,
including (except as provided below) any failure by the
Company to identify pursuant to Section 13.6(b) any
Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB; or
(ii) any breach by the Company of a representation or
warranty set forth in Section 13.2(a) or in a writing
furnished pursuant to Section 13.2(b) and made as of a date
prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by
73
such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant
to Section 13.2(b) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii) of
this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Company, any Subservicer, any Subcontractor or any Third-Party
Originator.
(b) Notification and Cooperation. The parties hereto further
agree, and any Indemnified Party not a party hereto is deemed to agree,
as a condition to its reliance on such indemnification, that the
Company's indemnification obligations under this Section 13.7 are
subject to the following terms and conditions:
(i) An Indemnified Party seeking indemnification
hereunder shall give written notice to the Company within a
reasonable time after the Indemnified Party receives notice
or becomes aware of an indemnifiable claim;
(ii) The Company shall undertake the defense of the
action or claim with counsel or other representatives of its
own choosing and reasonably acceptable to the Indemnified
Party (which counsel shall not, except with the consent of
the Indemnified Party, be counsel to the Indemnifying
Party);
(iii) The Indemnified Party shall have the right to
participate and assist in, but not control, the defense of
such claim and employ separate counsel in any action or
claim at the expense of the Indemnified Party (i.e., at its
own expense); and
(iv) The Company shall not settle or compromise any
claim suit or action against the Indemnified Party without
the express prior written consent of the Indemnified Party.
(c) With respect to any breach of this Article 13, the Purchaser
shall have the remedies set forth in this Agreement, including without
limitation, Article 10.
(d) Limitations. Notwithstanding anything in this Agreement to the
contrary, in no event shall the Company be obligated under this Section
13.7 to indemnify an Indemnified Party otherwise entitled to indemnity
hereunder in respect of any indemnifiable claims or losses that result
from the willful misconduct, bad faith or grossly negligent acts or
omissions of the Indemnified Party.
74
IN WITNESS WHEREOF, the Company and the Purchaser have caused their names to
be signed hereto by their respective duly authorized officers as of the day
and year first above written.
XXXXXXX SACHS MORTGAGE COMPANY
By: Xxxxxxx Xxxxx Real Estate
Funding Corp., its General Partner
By:_________________________________
Name:______________________________
Title:_______________________________
NATIONAL CITY MORTGAGE CO.,
As seller and servicer
By:_________________________________
Name:______________________________
Title:_______________________________
EXHIBIT A
MORTGAGE LOAN SCHEDULE
See attached
A-1
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be retained by the
Company in the Servicing File or delivered to the Custodian pursuant to
Sections 2.1 and 2.3 of the Flow Seller's Warranties and the Servicing
Agreement to which this Exhibit is attached (the "Agreement"):
(A) The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of ______________, without
recourse" and signed in the name of the Company by an authorized officer
(in the event that the Mortgage Loan was acquired by the Company in a
merger, the signature must be in the following form: "[Company],
successor by merger to [name of predecessor]"; and in the event that the
Mortgage Loan was acquired or originated by the Company while doing
business under another name, the signature must be in the following
form: "[Company], formerly know as [previous name]").
(B) The original of any personal endorsement, surety and/or
guaranty agreement executed in connection with the Mortgage Note, if
any.
(C) Except as set forth below, the original Mortgage, with
evidence of recording thereon or a certified true and correct copy of
the Mortgage sent for recordation. If in connection with any Mortgage
Loan, the Company cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Company shall deliver or cause to be delivered to
the Custodian, a photocopy of such Mortgage, together with (i) in the
case of a delay caused by the public recording office, an Officer's
Certificate of the Company stating that such Mortgage has been
dispatched to the appropriate public recording office for recordation
and that the original recorded Mortgage or a copy of such Mortgage
certified by such public recording office to be a true and complete copy
of the original recorded Mortgage will be promptly delivered to the
Custodian upon receipt thereof by the Company; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such
public recording office or by the title insurance company that issued
the title policy to be a true and complete copy of the original recorded
Mortgage.
(D) The originals or certified true copies of all assumption,
modification, consolidation or extension agreements, with evidence of
recording noted thereon if recordation is required to maintain the lien
of the mortgage or is otherwise required, or, if
B-1
recordation is not so required, an original or copy of any such
assumption, modification, consolidation or extension agreements.
(E) The original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording, from the Company to
"______________" or as otherwise directed by the Purchaser. If the
Mortgage Loan was acquired by the Company in a merger, the Assignment of
Mortgage must be made by "[Company], successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or originated by the
Company while doing business under another name, the Assignment of
Mortgage must be by "[Company], formerly know as [previous name]."
Subject to the foregoing and where permitted under the Applicable Laws
of the jurisdiction wherein the Mortgaged property is located, such
Assignments of Mortgage may be made by blanket assignments for Mortgage
Loans secured by the Mortgaged Properties located in the same county.
(F) Originals or certified true copies of all intervening
assignments of the Mortgage necessary to show a complete chain of title
from the original mortgagee to the Company, with evidence of recording
thereon, or if any such intervening assignment has not been returned
from the applicable recording office or has been lost or if such public
recording office retains the original recorded assignments of mortgage,
the Company shall deliver or cause to be delivered to the Custodian, a
photocopy of such intervening assignment, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of the Company stating that such intervening assignment of
mortgage has been dispatched to the appropriate public recording office
for recordation and that such original recorded intervening assignment
of mortgage or a copy of such intervening assignment of mortgage
certified by the appropriate public recording office or by the title
insurance company that issued the title policy to be a true and complete
copy of the original recorded intervening assignment of mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Company;
or (ii) in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in
a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and complete copy
of the original recorded intervening assignment.
(G) The original mortgage policy of title insurance or evidence of
title.
(H) Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
With respect to each Mortgage Loan, the Mortgage File shall include each of
the following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
(I) Verification of Mortgage Insurance.
(J) The original hazard insurance policy and, if required by law,
flood insurance policy, in accordance with Section 4.10 of the
Agreement.
B-2
(K) Residential loan application.
(L) Mortgage Loan closing statement.
(M) Verification of employment and income, unless originated under
the Company's Limited Documentation program, FNMA Timesaver Plus.
(N) Verification of acceptable evidence of source and amount of
down payment.
(O) Credit report on the Mortgagor, if available.
(P) Residential appraisal report.
(Q) Photograph of the Mortgaged Property.
(R) Survey of the Mortgaged Property, if required by the title
company or Applicable Law.
(S) Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the title
policy, i.e. map or plat, restrictions, easements, sewer agreements,
home association declarations, etc.
(T) All required disclosure statements.
(U) If available, termite report, structural engineer's report,
water potability and septic certification.
(V) Sales contract, if applicable.
(W) Evidence of payment of taxes and insurance premiums, insurance
claim files, correspondence, current and historical computerized data
files, and all other processing, underwriting and closing papers and
records which are customarily contained in a mortgage loan file and
which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(X) Amortization schedule, if available.
(Y) Original power of attorney, if applicable.
In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in
returning any recorded document, the Company shall deliver to the Custodian,
within 240 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will
be delivered to the Custodian. The Company shall be required to deliver to the
Custodian
B-3
the applicable recorded document by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested form the
Purchaser, which consent shall not be unreasonably withheld.
B-4
EXHIBIT C
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
-------------------
CUSTODIAL AGREEMENT, dated as of April 1, 2003 (the "Agreement"), among
Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), having an address of 00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, National City Mortgage Co., having an
address at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000 (in such capacity the
"Seller"), and JPMorgan Chase Bank having an address at 0000 Xxxxxx Xxxxxx,
00xx xxxxx, Xxxxxxx, Xxxxx 00000 (the "Custodian").
WITNESSETH:
----------
WHEREAS, the Purchaser has purchased from the Seller certain one- to four-
family, first-lien, fixed rate residential mortgage loans (the "Mortgage
Loans") pursuant to the terms and conditions of the Flow Seller's Warranties
and Servicing Agreement, dated as of May 1, 2003 (the "Seller's Warranties and
Servicing Agreement"), between the Seller and the Purchaser and the Warranty
Xxxx of Sale dated April 8, 2003 (Fixed Rate Pool Bid date 2/11/03);
WHEREAS, the Seller has agreed to sell to the Purchaser, with respect to the
Mortgage Loans, the Mortgage Loans pursuant to the terms and conditions of the
Seller's Warranties and Servicing Agreement;
WHEREAS, the Mortgage Loans purchased pursuant to the Seller's Warranties and
Servicing Agreement will be serviced by the Seller (in such capacity, the
"Servicer") pursuant to the Seller's Warranties and Servicing Agreement; and
WHEREAS, the Purchaser desires to have the Custodian take possession of the
mortgage notes for the Mortgage Loans, along with certain other documents
specified herein, as the Custodian of the Purchaser or subsequent purchasers
of the Mortgage Loans, in accordance with the terms and conditions hereof.
NOW THEREFORE, in consideration of the mutual undertaking herein expressed,
the parties hereto hereby agree as follows:
1. On or prior to the Closing Date (as defined in the Seller's
Warranties and Servicing Agreement), the Seller shall deliver and release to
the Custodian, subject to and in accordance with the relevant section of the
Seller's Warranties and Servicing Agreement, the following documents,
pertaining to each of the Mortgage Loans identified in the Mortgage Loan
Schedule (the "Mortgage Loan Schedule") a copy of which Mortgage Loan Schedule
is annexed as Exhibit 1 hereto:
(a) the original executed mortgage note endorsed, "Pay to the
order of ______________, without recourse", or as otherwise directed by
the Purchaser, and signed in the name of the Seller by an officer of the
Seller, or a lost note affidavit with a copy of the original mortgage
note attached; the mortgage note shall include all
C-1
intervening original endorsements showing a complete chain of title from
the originator to the Seller;
(b) the original executed mortgage, or a certified copy thereof,
in either case with evidence of recording noted thereon; the standard
Xxxxxx Xxx/FHLMC Condominium Rider or PUD Rider must be attached to the
mortgage if the mortgaged property is a condominium or is located in a
PUD;
(c) the original assignment of each mortgage from the Seller to
"[in blank]" or as otherwise directed by the Purchaser;
(d) the original policy of title insurance, or attorney's opinion
of title (accompanied by an abstract of title), as the case may be, with
respect to each Mortgage Loan;
(e) originals of any intervening assignments of the mortgage
necessary to show a complete chain of title from the original mortgagee
to the Seller with evidence of recording noted thereon; provided, that
such intervening assignments may be in the form of blanket assignments,
a copy of which, with evidence of recording noted thereon, shall be
acceptable;
(f) originals of all modification agreements with evidence of
recording noted thereon if recordation is required to maintain the lien
of the mortgage or is otherwise required, or, if recordation is not so
required, an original or copy of any such modification agreement;
(g) for each Mortgage Loan with respect to which the borrower's
name as it appears on the note does not match the borrower's name on the
Mortgage Loan Schedule, one of the following: (i) the original of the
assumption with evidence of recording thereon if required to maintain
the lien of the mortgage or if otherwise required, or, if recordation is
not so required, an original or copy of such assumption agreement; or
(ii) a copy of a marriage certificate, court order, decree or other
document evidencing that the two different names refer to the same
person;
(h) to the extent applicable, (x) an original power of attorney
with evidence of recordation thereon if necessary to maintain the lien
on the Mortgage or if the document to which such power of attorney
relates is required to be recorded, or, if recordation is not so
required, an original of such power of attorney, and (y) an original
guaranty agreement; and
(i) personal endorsement and/or guaranty agreements for all
non-individual loans. (corporations, partnerships, trusts, estates,
etc.)
Notwithstanding the foregoing, with respect to any power of attorney,
mortgage, assignment, intervening assignment, assumption agreement,
modification agreement or deed of sale for which a certified copy is delivered
in accordance with the foregoing, the copy must be certified
C-2
as true and complete by the appropriate public recording office, or, if the
original has been submitted for recording but has not yet been returned from
the applicable recording office, an officer of the Seller must certify the
copy as a true copy of the original submitted for recordation. Copies of
blanket intervening assignments, however, need not be certified.
2. From time to time, the Servicer shall forward to the Custodian
additional documents evidencing an assumption or modification of a Mortgage
Loan approved by the Purchaser and the Servicer. All Mortgage Loan documents
held by the Custodian as to each Mortgage Loan are referred herein as the
"Custodian's Mortgage File." The Custodian, in its independent capacity,
agrees to act as custodian for the Purchaser and any successor to the
Purchaser in accordance with the terms and conditions of this Agreement,
including upon any securitization of the Mortgage Loans, as custodian for the
trustee (the "Trustee") under the securitization trust agreement.
3. With respect to each Custodian's Mortgage File delivered to the
Custodian, the Custodian is exclusively the Custodian for the Purchaser, and
the Purchaser's successor or assigns. The Custodian shall hold all Custodian's
Mortgage Files for the exclusive use and benefit of the Purchaser and, except
as otherwise provided herein, shall make disposition thereof only in
accordance with the terms of this Agreement and the written instructions of
the Purchaser. The Custodian shall segregate by group (as directed by the
Purchaser) and maintain continuous custody of all Custodian's Mortgage Files
received by it in secure and fire resistant facilities in accordance with
customary standards for such custody.
4. Upon the initial sale of the Mortgage Loans, the Custodian shall
deliver to the Purchaser a Custody Receipt in the form annexed hereto as
Exhibit 3 (the "Custody Receipt") which includes verification that, except as
shown on an exceptions list attached thereto:
(a) all documents required to be delivered to it pursuant to
Sections 1(a) through (e) of this Agreement are in the Custodian's
possession; provided, that, the Custodian shall separately note on the
Data Collection Schedule (as defined below) any Mortgage Loans with
respect to which the original note is missing and a lost note affidavit
and a copy of such note is delivered;
(b) all documents required to be delivered to it pursuant to
Sections 1(f) and 1(g) of this Agreement are in the Custodian's
possession; provided, that:
(i) the Custodian shall have no obligation to verify the
receipt of any such documents the existence of which was not made
known to the Custodian by the Custodian's Mortgage File, and
(ii) the Custodian shall have no obligation to determine
whether recordation of any such document is necessary;
(c) all documents required to be delivered to it pursuant to
Section 1(i) of this Agreement are in the Custodian's possession;
provided, that, the Custodian shall have no
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obligation to verify the receipt of any such documents the existence of
which was not made known to the Custodian by the Custodian's Mortgage
File;
(d) all powers of attorney and other documents required to be
delivered to it pursuant to Section 1(h) of this Agreement are in the
Custodian's possession; provided, that:
(i) the Custodian shall have no obligation to verify the
receipt of any such documents the existence of which was not made
known to the Custodian by the Custodian's Mortgage File, and
(ii) the Custodian shall have no obligation to determine
whether recordation of any such power of attorney is necessary
(except that the Custodian shall conclude that if the document to
which such power of attorney relates is a mortgage, interim
assignment, assignment or a document that was recorded, then the
Custodian shall conclude that such power of attorney should have
been recorded);
(e) all documents have been examined by the Custodian and appear
regular on their face and relate to the Mortgage Loans;
(f) based only on the Custodian's examination of the foregoing
documents, the information set forth on the Mortgage Loan Schedule
representing each Mortgage Loan accurately reflects the following:
(i) Mortgage Loan number,
(ii) the first payment date (acceptable of accurate within
30 days),
(iii) the maturity date (acceptable of accurate within 30
days),
(iv) the original loan amount,
(v) the original interest rate,
(vi) the full name of the borrower(s) (acceptable if first
and/or middle names are missing or initialized (e.g., X.X. Xxxxx
would match Xxxxxxx Xxxxx Xxxxx), acceptable if first names are
shortened or lengthened or nicknames substituted therefor (e.g.,
Xxx for Xxxxxx or Xxxx for Xxxxxxx), acceptable if middle or
maiden names are omitted, acceptable if "Jr.", "Sr.", "II" and
similar designations are omitted, acceptable if discrepancy is a
typographical error),
(vii) the property address, including zip code (acceptable
if the first three digits of the zip code match), and
(viii) the original principal and interest payment.
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(g) each mortgage note has been endorsed and each assignment of
mortgage has been assigned as described in Section 1 hereof; provided,
that, the Custodian shall have no obligation to confirm that the
assignments are in recordable form.
In making the verification required by this Section 4, the Custodian may rely
conclusively on the Mortgage Loan Schedule attached hereto, and the Custodian
shall have no obligation to independently verify the correctness of such
Mortgage Loan Schedule. If any discrepancy exists between the Verified
Information and the Mortgage Loan Schedule, the Custodian shall notify the
Purchaser and the Servicer by attaching a list of such discrepancies to the
Final Certification.
It is understood that before delivering the Custody Receipt, the Custodian
shall examine the Mortgage Loan Documents to confirm the following (and shall
report any exceptions to these confirmations in the exceptions report attached
to the Custody Receipt):
(1) each mortgage note, mortgage, assumption, modification,
guaranty, power of attorney and deed of sale bears a signature or
signatures that appear to be original and that purport to be that of the
Person or Persons named as the maker and mortgagor/trustor or, if
photocopies are permitted by this Agreement, that such copies bear a
reproduction of such signature or signatures;
(2) the principal amount of the indebtedness secured by the
mortgage is identical to the original principal amount of the note;
(3) the interest rate shown on the note is identical to the
interest rate shown on the Mortgage Loan Schedule;
(4) the assignment of the mortgage from the Seller is in the form
required pursuant to Section l(c) hereof, and bears the signature of the
Seller, that appears to be an original and any other necessary party or,
if photocopies are permitted by this Agreement, such copies bear a
reproduction of such signature or signatures;
(5) if intervening assignments are included in the Custodian's
Mortgage File, each such intervening assignment bears the signature of
the mortgagee and/or the assignor (and any other necessary party) that
appears to be an original or, if photocopies are permitted by this
Agreement, that such copies bear a reproduction of such signature or
signatures; and
(6) the title insurance policy or certificate of title is for an
amount not less than the original principal amount of the related note.
5. Prior to August 31, 2003, the Custodian shall deliver to the
Purchaser a Final Certification in the form of Exhibit 4 evidencing the
completeness of the Custodian's Mortgage File for each Mortgage Loan, with any
applicable exceptions noted on such Certification.
6. No later than the fifth Business Day of each month, commencing in May
2003, the Custodian shall deliver to the Servicer, GS Mortgage Securities
Corp., as depositor and the
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Trustee in electronic or hard copy format, as requested by the Purchaser, the
exceptions list required by Section 4 hereof, updated to remove exceptions
cured since the date on which the Custody Receipt was issued pursuant to
Section 4 hereof. In the event the Mortgage Loans are securitized, the
Custodian will only be required to deliver the exceptions list upon request.
In addition, such monthly reports shall list any document with respect to
which the Seller delivered a copy certifying that the original had been sent
for recording, until such time as the Seller delivers to the Custodian the
original of such document or a copy thereof certified by the appropriate
public recording office. The Data Collection Schedule shall not be included
unless specifically requested in advance. Except as specifically provided
above, the Custodian shall be under no duty to review, inspect or examine such
documents to determine that any of them are enforceable or appropriate for
their prescribed purpose. During the life of the Mortgage Loans, in the event
the Custodian discovers any defect with respect to the Custodian's Mortgage
Files, the Custodian shall give written notice of such defect to the
Purchaser.
7. The Custodian shall hold in its possession and custody at JPMorgan
Chase Bank, 0000 Xxxxxx Xxxxxx, 00xx xxxxx, Xxxxxxx, XX 00000, for the
Purchaser or any assignee of the Purchaser, all of the Custodian's Mortgage
Files delivered from time to time by the Servicer to the Custodian.
8. From time to time and as appropriate for the foreclosure or servicing
of the Mortgage Loans, the Purchaser hereby authorizes the Custodian to
release to the Servicer (or, after securitization of the Mortgage Loans, if so
designated by the Servicer, to the Trustee), within three (3) business days of
receipt of either (i) a written request and receipt of the Servicer in the
form attached hereto as Exhibit 5(a) executed by one of the authorized
signatories set forth on Exhibit 6, as such exhibit may be updated from time
to time by the Servicer or (ii) an electronic request through the use of an
electronic file request system mutually acceptable to the Custodian and the
Servicer, a Custodian's Mortgage File to the place indicated in any such
written request from the Servicer. A list of authorized signatures for such
written requests has been furnished to the Custodian by the Servicer. All
Custodian's Mortgage Files so released to the Servicer shall be held by it in
trust for the benefit of the Purchaser. The Servicer shall return to the
Custodian the Custodian's Mortgage File when the Servicer's need therefor in
connection with such foreclosure or servicing no longer exist, unless the
Mortgage Loan shall be liquidated or paid in full.
Servicer may provide an electronic transmission for release of documents in a
form agreed to in advance of initial transmission by both Servicer and
Custodian containing information readable without intervention by Custodian
data processing operations computer hardware and software staff, and arranged
in a record layout to be specified by Custodian (a "Paperless Release
Request"). Servicer agrees to maintain and control access to electronic
signature information and assumes liability for any unauthorized use thereof.
Servicer also agrees to maintain accurate records of electronic transactions
related to the Custodial Files. Servicer hereby authorizes Custodian to
automatically append the electronic signature of an Authorized Representative
to the applicable request for release of documents and agrees and acknowledges
that by appending such Authorized Representatives electronic signature, the
Custodian shall be entitled to rely thereon. For purposes of this Agreement
the term "electronic signature" is defined as an
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"electronic identifier intended by the person using it to have the same force
and effect as the use of a manual signature."
Servicer agrees in advance to comply with all Custodian data encryption,
security and record layout standards in connection with any Paperless Release
Request as may be amended from time to time upon notice from Custodian to
Servicer. Custodian reserves the right to restrict or suspend Servicer's
access to the Custodian's computer systems for maintenance or repairs or for
any other reason in Custodian's sole discretion, provided however that
Custodian shall promptly provide Servicer notice of such restriction or
suspension.
Notwithstanding the foregoing, Servicer is authorized to transmit and
Custodian is authorized to accept signed facsimile copies of Requests for
Release.
9. Upon the repurchase of any Mortgage Loan or the payment or
liquidation in full of the Mortgage Loan, and within three Business Days of
receipt by the Custodian of the Servicer's request for release, receipt and
certification either (i) in the form attached hereto as Exhibit 5(b), executed
by one of the authorized signatories set forth on Exhibit 6 as such exhibit
may be updated from time to time by the Servicer or (ii) through the use of an
electronic request system mutually acceptable to the Custodian and the
Servicer (which certification shall include a statement to the effect that all
amounts received in connection with such repurchase or payment in full or
liquidation have been credited to the Collection Account as provided in the
Seller's Warranties and Servicing Agreement), the Custodian shall release the
related Custodian's Mortgage File to the Servicer.
10. Upon reasonable prior written notice, the Custodian shall permit the
Purchaser and its agents, and servicing officers of the Servicer reasonable
access to its premises during the Custodian's normal business hours to inspect
the Custodian's Mortgage Files and all other documents, records and other
papers in possession or under the control of the Custodian relating to the
Mortgage Loans serviced by the Servicer. Each such person shall comply with
the Custodian's reasonable standards and procedures for physical security and
personal conduct while on the Custodian's premises. Any person failing, in the
Custodian's sole but reasonable business judgment, to meet such standards may
be removed or denied access to the premises. The Purchaser shall be
responsible for any reasonable expense in connection with such examination.
11. The Purchaser, with or without cause, or upon failure by the
Custodian to perform or observe any term of this Agreement, may remove and
discharge the Custodian or any successor Custodian thereafter appointed from
the performance of its duties under this Agreement upon written notice from
the Purchaser to the Custodian or the successor Custodian; provided that at
least sixty (60) days prior written notice shall be given with respect to a
removal or discharge without cause. Having given notice of such removal, the
Purchaser shall promptly appoint a successor Custodian to act on its behalf by
written instrument, an original counterpart of which instrument shall be
delivered to the Seller and one copy to the successor Custodian. In the event
of any such removal, the Custodian shall promptly transfer, to the successor
Custodian as directed, all Custodian's Mortgage Files being administered under
this Agreement. Such transfer shall be at the Custodian's expense only if the
Custodian is discharged and removed
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upon a failure by the Custodian to perform or observe any material terms of
this Agreement; otherwise such transfer shall occur at the expense of the
Purchaser. In any event, the Custodian shall be entitled to the payment of all
outstanding fees and expenses of the Custodian due the Custodian at the time
of such removal by the Purchaser. In the event that the Purchaser removes the
Custodian without cause, any transfer or set-up fees payable to the successor
Custodian will be payable by the Purchaser. In any event, the reasonable
ongoing fees of any successor Custodian shall be paid by the Purchaser.
12. It is understood that the Custodian will charge for its services
under this agreement as set forth in a separate agreement between the
Custodian and the Purchaser, the payment of which shall be the sole obligation
of the Purchaser.
13. The Custodian shall, at its own expense, maintain at all times
during the existence of this Agreement and keep in full force and effect, (a)
fidelity insurance, (b) errors and omissions insurance, and (c) all risk
property insurance. All such insurance shall be in amounts, with standard
coverage and subject to deductibles, all as is customary for insurance
typically maintained by banks which act as custodian and in an amount and with
coverages not less than that required by the Xxxxxx Mae. Upon request, the
Purchaser will be provided with certificates of insurance, as specified in
this paragraph 13.
14. The Custodian may resign as the Custodian hereunder upon at least
sixty (60) days prior written notice to the Purchaser whereupon the Custodian
shall deliver the Custodian's Mortgage Files to Purchaser, or a designee of
the Purchaser, in accordance with directions from the Purchaser. In the event
of such resignation, or termination, the Purchaser shall pay all outstanding
fees and expenses of the Custodian and shall appoint a successor Custodian.
15. For the purpose of facilitating the execution of this Custodial
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
16. Upon the request of the Purchaser, at any time, the Custodian shall
provide to the Purchaser a list of all of the Mortgage Loans owned by the
Purchaser for which the Custodian holds a Custodian's Mortgage File pursuant
to this Agreement. Such list may be in the form of a copy of the Mortgage Loan
Schedule with manual deletions to specifically denote any Mortgage Loans paid
off, repurchased or liquidated since the date of this Agreement.
17. The duties and obligations of the Custodian shall only be such as
are expressly set forth in this Agreement or as set forth in a written
amendment to this Agreement executed by the parties hereto or their successors
and assigns. In no event shall the Custodian be liable for special, indirect
or consequential damages, even if advised of this possibility of the same.
18. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered,
delivered by facsimile or mailed by first class mail or overnight express
mail, postage prepaid, to the parties to this agreement at the address listed
on Exhibit 2 or such other address as may hereafter be furnished in writing to
each
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of the parties to this Agreement. Any such demand, notice or communication
hereunder shall be deemed to have been received on the date received, if
received prior to 4 p.m. eastern time, delivered to or received at the
premises of the addressee or received at the facsimile number of the address,
or, if received after 4 p.m. eastern time, then on the next business day.
19. This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to its conflict of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
20. The Custodian shall have no duties or obligation except those
expressly stated in this Agreement, and such duties or obligations shall be
determined solely by the express provisions of the Agreement. The Custodian,
its officers, directors, employees, agents or other representatives shall not
be personally liable for any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within the discretion or rights
or powers conferred upon the Custodian by this Agreement or in reliance upon
any written notice, request, consent, certificate, order, affidavit, letter,
telegram or other document reasonably believed by it to be genuine and to have
been signed or sent by the proper party or parties; provided, however, that
the provisions of this paragraph shall not be construed to relieve the
Custodian from liability from its own negligent action, its own negligent
failure to act, or its own bad faith or willful misconduct or any breach by
the Custodian of any of its obligations hereunder, which breach was due to
negligence on the part of the Custodian. The Custodian will be regarded as
making no representations and having no responsibilities (except as expressly
set forth herein) as to the validity, sufficiency, value, genuineness,
ownership or transferability of any Mortgage Loan, and will not be required to
and will not make any representations as to the validity, value or genuineness
of any Mortgage Loan. The Custodian shall not be obligated to take any legal
action hereunder that might in its judgment involve any expense or liability
unless it has been furnished with reasonable indemnity. The Custodian may rely
on and shall be protected in acting in good faith upon the written
instructions of the Purchaser, the Servicer and the Trustee (if any) and such
employees and representatives of the Purchaser, the Servicer and the Trustee
(if any) as each such party may hereinafter designate in writing. The
Custodian may execute any of the powers hereunder or perform any duties
hereunder either directly or through agents or attorneys; provided, however,
that the execution of such powers by any such agents or attorneys shall not
diminish or relieve the Custodian for responsibility therefor to the same
degree as if the Custodian itself had executed such powers.
21. The Custodian shall be entitled to obtain the advice or opinion of
counsel (which shall be either in house counsel or a nationally recognized
outside counsel) with respect to a matter of law for which the Custodian has a
reasonable question as to the rights and duties relating to the Custodian
hereunder and the Custodian shall have no liability for any action taken or
omitted in conformity with its good faith reliance on such advice or opinion;
provided, however, that the provisions of this paragraph shall not relieve the
Custodian from liability from its own negligent selection of counsel.
22. This Agreement (together with the separate fee agreement between the
Purchaser and the Custodian) contains the entire agreement between the parties
relating to the subject
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matter hereof and may be amended only by written agreement signed by the
Purchaser and the Custodian.
23. The Purchaser shall have the right, without consent of the
Custodian, to assign its interest under this Agreement with respect to some or
all of the Mortgage Loans, and designate any person to exercise any rights of
the Purchaser hereunder, and the assignee or designee shall accede to the
rights and obligations hereunder of the Purchaser with respect to such
Mortgage Loans; provided, however, that the Purchaser may not assign its
interest to more than five (5) persons without the consent of the Custodian,
such consent not to be unreasonably withheld. All references to the Purchaser
in this Agreement shall be deemed to include its assignee or designee. Upon
the Custodian's receipt of the written notification, which shall state the
name and address of the transferee and the date of sale and shall be
accompanied by the original Custody Receipt presently outstanding delivered to
the Purchaser, the Custodian shall change its records to reflect that such
transferee is the owner of such Mortgage Loan and shall immediately issue (i)
a new Custody Receipt with respect to a portion of or all of the Mortgage
Loans, as the case may be, in the name of such transferee and (ii) a new
Custody Receipt with respect to any Mortgage Loans retained by the Purchaser;
provided, that, any Custody Receipt issued after the date of the initial sale
of the Mortgage Loans shall not (1) confirm the accuracy of the Mortgage Loan
Schedule with respect to Verified Information nor (2) include the Data
Collection Schedule. The Purchaser and the Custodian agree herein that any and
all such transferees of a Mortgage Loan shall succeed to all the rights and
obligations of the Purchaser and shall be considered a Purchaser under this
Agreement.
24. The Purchaser agrees to indemnify and hold the Custodian, its
directors, officers, agents, employees, and other representatives harmless
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against it
or them in any way arising out of this Agreement as a result of any action or
failure to act, so long as such action or failure to act by it or them
hereunder does not constitute bad faith, negligence or willful misconduct of
the Custodian or any of its agents, officers, directors or employees or breach
by the Custodian of its obligations hereunder. The foregoing indemnity shall
survive the termination of this Agreement.
25. This Agreement shall inure to the benefit of the successors and
assigns of the parties hereto.
26. Each party agrees to keep confidential the existence of this
Agreement, the identity of the parties hereto, and any other term or condition
of this Agreement and the transactions contemplated hereby, and to use such
information solely in order to effectuate the purpose of the Agreement;
provided, that, each party may provide confidential information to its
employees, agents and affiliates who have a need to know such information in
order to effectuate the transaction, and provided, further that such
information is identified as confidential non-public information. In the event
that either party or any of its employees, agents or affiliates are requested
pursuant to, or required by, applicable law, regulation or legal process to
disclose any non-public information, such party will notify the other promptly
prior to any such disclosure so that such party may seek a protective order or
other appropriate remedy or, in such
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party's sole discretion, waive compliance with the terms of this Section 26.
In the event that no such protective order or other remedy is timely obtained,
or that such party waives compliance with the terms of this Section 26, the
party required to disclose such non-public information or its employees,
agents or affiliates will furnish only that portion of the non-public
information that it is advised by counsel is legally required and will
exercise all reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the non-public information.
27. The Custodian (or any successor thereto) shall at all times (a) be a
depository institution or trust company subject to supervision by federal or
state authority, (b) have a combined capital and surplus of at least
$10,000,000, (c) be qualified to do business in any jurisdiction in which it
holds a Custodian's Mortgage File, (d) be qualified to act as a custodian for
Xxxxxx Xxx, the Federal Home Loan Mortgage Corporation and the Government
National Mortgage Association, and (e) not be an affiliate of the Purchaser or
the Seller, except insofar as the Purchaser or its assignee gives its prior
written consent.
28. Upon the initial sale of the Mortgage Loans, the Custodian shall
deliver to the Purchaser (a) an opinion of counsel and (b) an officer's
certificate, each in form and substance reasonably satisfactory to the
Purchaser.
29. The Custodian represents, warrants and covenants that:
(a) The Custodian is (i) a banking corporation duly organized,
validly existing and in good standing under the laws of the State of New
York and (ii) duly qualified and in good standing and in possession of
all requisite authority, power, licenses, permits and franchises in
order to execute, deliver and comply with its obligations under the
terms of this Agreement;
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action and the execution
and delivery of this Agreement by the Custodian in the manner
contemplated herein and the performance of and compliance with the terms
hereof by it will not (i) violate, contravene, or create a default under
any applicable laws, licenses, or permits to the best of its knowledge,
or (ii) violate, contravene or create a default under any charter
document or bylaw of the Custodian or to the best of the Custodian's
knowledge any contract, agreement or instrument to which the Custodian
or by which any of its property may be bound and will not result in the
creation of any lien, security interest or other charge or encumbrance
upon or with respect to any of its property;
(c) The execution and delivery of this Agreement by the Custodian
and the performance of and compliance with its obligations and covenants
hereunder do not require the consent or approval of any governmental
authority or, if such consent or approval is required, it has been
obtained;
(d) The Custodian has duly executed and delivered this Agreement,
and this Agreement, assuming due authorization, execution and delivery
by the Purchaser and Seller, constitutes a legal, valid and binding
obligation of the Custodian, enforceable
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against it in accordance with its terms, except as the enforcement
thereof may be limited by applicable debtor relief laws and that certain
equitable remedies may not be available regardless of whether
enforcement is sought in equity or law; and
(e) There is no action, suit, proceeding or investigation pending
or, to the Custodian's knowledge, threatened, against the Custodian,
which seeks to prevent the consummation of the transaction contemplated
hereby or which, either in any one instance or in the aggregate, if
determined adversely to the Custodian would adversely affect the
execution, delivery or enforceability of this Agreement, the ability of
the Custodian to perform its obligations hereunder, or have a material
adverse effect on the financial condition of the Custodian.
30. The Custodian is not responsible for preparing or filing any reports
or returns relating to federal, state or local income taxes with respect to
this Agreement, other than for the Custodian's compensation or for
reimbursement of expenses. The Custodian will be responsible for the
transmission of mortgage files and loan documents, with insurance thereon as
provided in the normal course by the nationally recognized overnight courier
service utilized by the Custodian for such transmission. At the request of the
Purchaser, the Custodian will obtain and maintain additional insurance with an
insurance provider specified by the Purchaser against loss or damage to such
Mortgage Files and loan documents in connection with such transmission in an
amount specified by the Purchaser. The costs and expenses incurred in
connection with obtaining and maintaining such insurance shall be the sole
responsibility of the Purchaser. It is expressly agreed that in no event shall
the Custodian have any liability for any losses or damages to any person,
including, without limitation, the Purchaser or Servicer, arising out of
actions of the Custodian consistent with this Agreement. In the absence of any
written instructions from the Purchaser with respect to the transmission of
the Custodian's Mortgage Files, the parties hereby agree that the Custodian
may utilize any nationally recognized overnight courier service and shall be
entitled to reimbursement from the Purchaser.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
duly authorized officers as of the date first above written.
XXXXXXX SACHS MORTGAGE
COMPANY, as Purchaser
By: Xxxxxxx Xxxxx Real Estate Funding Corp.,
General Partner
By: ______________________________
Name: _____________________________
Title: ____________________________
JPMORGAN CHASE BANK,
as Custodian
By: ______________________________
Name: _____________________________
Title: ____________________________
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NATIONAL CITY MORTGAGE CO., as
Seller/Servicer
By: ______________________________
Name: _____________________________
Title: ____________________________
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EXHIBIT D
FORM OF OPINION OF COUNSEL
Sale of Series [ ] Mortgage Loans by
[ ] to
Xxxxxxx Xxxxx Mortgage Company
Dear Sir/Madam:
I am _____ of [ ] and have acted as counsel to [ ] (the "Company"), with
respect to certain matters in connection with the sale by the Company of the
mortgage loans (the "Mortgage Loans") pursuant to that certain Flow Seller's
Warranties and Servicing Agreement designated as Mortgage Loan Series (the
"Seller's Warranties and Servicing Agreement") by and between the Company and
Xxxxxxx Sachs Mortgage Company (the "Purchaser"), dated as of [ ], 2003, which
sale is in the form of whole Mortgage Loans. The Mortgage Loans are listed on
Schedule A to the Warranty Xxxx of Sale issued in connection with the Seller's
Warranties and Servicing Agreement. Capitalized terms not otherwise defined
herein have the meanings set forth in the Seller's Warranties and Servicing
Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Custodial Agreement;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as I have deemed necessary
and relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Seller's
Warranties and Servicing Agreement. I have assumed the authenticity of all
documents submitted to me as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the state of [ ].
2. The Company has the power to engage in the transactions contemplated by the
Seller's Warranties and Servicing Agreement and the Custodial Agreement and
all requisite power, authority and legal right to execute and deliver the
Seller's Warranties and Servicing Agreement,
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the Custodial Agreement and the Mortgage Loans, and to perform and observe the
terms and conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company, signed
(a) the Seller's Warranties and Servicing Agreement, (b) the Custodial
Agreement , and (c) any other document delivered prior hereto or on the date
hereof in connection with the sale and servicing of the Mortgage Loans in
accordance with the Seller's Warranties and Servicing Agreement and the person
was, at the respective times of such signing and delivery, and is, as of the
date hereof, duly elected or appointed, qualified and acting and as such
officer or attorney-in-fact, and the signatures of such persons appearing on
such documents are their genuine signatures.
4. Each of the Seller's Warranties and Servicing Agreement, the Custodial
Agreement and the Mortgage Loans, has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
enforceable in accordance with its terms, subject to bankruptcy laws and other
similar laws of general application affecting rights of creditors and subject
to the application of the rules of equity, including those respecting the
availability of specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or with the
Purchaser's ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original signature in order to complete the
transactions contemplated by the Seller's Warranties and Servicing Agreement
and the Custodial Agreement, and by original or facsimile signature in order
to execute the endorsements to the Mortgage Notes and the assignments of the
Mortgages, and the original or facsimile signature of the officer at the
Company executing the endorsements to the Mortgage Notes and the assignments
of the Mortgages represents the legal and valid signature of said officer of
the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Seller's
Warranties and Servicing Agreement, the Custodial Agreement or the sale and
delivery of the Mortgage Loans or the consummation of the transactions
contemplated by the Seller's Warranties and Servicing Agreement, and the
Custodial Agreement; or (ii) any required consent, approval, authorization or
order has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Seller's Warranties and Servicing Agreement
and the Custodial Agreement, will conflict with or results in or will result
in a breach of or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to which
it is subject, or violates any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Company which, in my opinion,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
D-2
condition, properties or assets of the Company or in any material impairment
of the right or ability of the Company to carry on its business substantially
as now conducted or in any material liability on the part of the Company or
which would draw into question the validity of the Seller's Warranties and
Servicing Agreement, and the Custodial Agreement, or of any action taken or to
be taken in connection with the transactions contemplated thereby, or which
would be likely to impair materially the ability of the Company to perform
under the terms of the Seller's Warranties and Servicing Agreement and the
Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened" unless
the potential litigant or governmental authority has manifested to the legal
department of the Company or an employee of the Company responsible for the
receipt of process a present intention to initiate such proceedings; nor have
I regarded any legal or governmental actions, investigations or proceedings as
including those that are conducted by state or federal authorities in
connection with their routine regulatory activities. The sale of each Mortgage
Note and Mortgage as and in the manner contemplated by the Seller's Warranties
and Servicing Agreement is sufficient fully to transfer all right, title and
interest of the Company thereto as noteholder and mortgagee, apart from the
rights to service the Mortgage Loans pursuant to the Seller's Warranties and
Servicing Agreement.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage Notes to
the Purchaser. Upon the completion of the endorsement of the Mortgage Notes
and the completion of the assignments of the Mortgages, and the recording
thereof, the endorsement of the Mortgage Notes, the delivery to the Custodian
of the completed assignments of the Mortgages, and the delivery of the
original endorsed Mortgage Notes to the Custodian would be sufficient to
permit the entity to which such Mortgage Note is initially endorsed at the
Purchaser's direction, and to whom such assignment of Mortgages is initially
assigned at the Purchaser's direction, to avail itself of all protection
available under Applicable Law against the claims of any present or future
creditors of the Company, and would be sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the Mortgages and the
Mortgage Notes by the Company from being enforceable, such that in a properly
presented and argued case under title 11, United States Code (the "Bankruptcy
Code"), in which the Company were the debtor, a bankruptcy court having
jurisdiction over the Company would consider the transfer of the Mortgage
Loans from the Company to the Purchaser to be a true sale of the Mortgage
Loans from the Company to the Purchaser and not a secured loan by the
Purchaser to the Company and, accordingly, the Mortgage Loans and the payments
and other collections thereon (other than those at any given time that may be
commingled with unrelated funds held by the Company) and the proceeds thereof
transferred to the Purchaser by the Company in accordance with the Company's
Warranties and Servicing Agreement would not be deemed property of the
Company's estate for purposes of Section 541 of the Bankruptcy Code or be
subject to the automatic stay provisions of Section 362 of the Bankruptcy
Code.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
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Sincerely,
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EXHIBIT E
ITEMS TO BE INCLUDED IN MONTHLY REMITTANCE ADVICE
On each Closing Date, the Company shall deliver to the
Purchaser an initial set-up report (the "Initial Set-up Report"),
dated as of the related Cut-off Date, which shall set forth
certain information regarding the related Mortgage Pool. Such
information shall include, without limitation, the principal
balance of each Mortgage Loan, the interest rate, delinquency
status and any other information requested by the Purchaser. For
each month after each Closing Date, the Company shall provide a
monthly remittance advice report (the "Monthly Remittance Advice
Reports") to the Purchaser, which shall set forth for each related
Mortgage Loan, the trial balance, interest rate, delinquency,
foreclosure and related default information, and such other
information as may be requested by the Purchaser. The Initial
Set-up Report and the Monthly Remittance Advice Reports will be
delivered in an Excel format or in such other electronic format as
agreed to by the parties. Each Initial Set-up Report and Monthly
Remittance Advice Report shall contain only such information as is
readily available to the Company and is mutually agreed to by
Company and the Purchaser.
E-1
EXHIBIT F
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT made this _____ day of
__________________, 200_, among [ ], a __________________________
(the "Servicer"), _________________________ a ________________________ (the
"Assignee"), and _____________________________, a _______________________ (the
"Assignor").
WHEREAS, Xxxxxxx Sachs Mortgage Company and the Servicer have entered into a
certain Flow Seller's Warranties and Servicing Agreement dated as of [ ], 2003
(the "Servicing Agreement"), pursuant to which the Servicer sold certain
mortgage loans listed on the mortgage loan schedule attached as an exhibit to
the Servicing Agreement;
WHEREAS, the Assignee has agreed on certain terms and conditions to purchase
from the Assignor certain mortgage loans (the "Mortgage Loans"), which
Mortgage Loans are subject to the provisions of the Servicing Agreement and
are listed on the mortgage loan schedule attached as Exhibit 1 hereto (the
"Mortgage Loan Schedule");
WHEREAS, pursuant to a Trust Agreement, dated as of [______ __], 200__ (the
"Trust Agreement"), between GS Mortgage Securities Corp., as Depositor, and
[______], as Trustee (the "Trustee"), the Assignee will transfer the Mortgage
Loans to the Trustee, together with the Assignee's rights in the Sale and
Servicing Agreement;
NOW THEREFORE, in consideration of the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. Assignment and Assumption.
(a) The Assignor hereby assigns to the Assignee all of its right,
title and interest in and to the Mortgage Loans and Servicing Agreement, to
the extent relating to the Mortgage Loans (other than the rights of the
Assignor to indemnification thereunder), and the Assignee hereby assumes all
of the Assignor's obligations under the Servicing Agreement, to the extent
relating to the Mortgage Loans from and after the date hereof, and the
Servicer hereby acknowledges such assignment and assumption and hereby agrees
to the release of the Assignor from any obligations under the Servicing
Agreement from and after the date hereof, to the extent relating to the
Mortgage Loans. Notwithstanding the foregoing, it is understood that the
Assignor is not released from liability for any breaches of the
representations and warranties made in Section 3.6 of the Servicing Agreement,
and the Assignee is not undertaking any such liability hereunder.
(b) The Assignor represents and warrants to the Assignee that the
Assignor has not taken any action which would serve to impair or encumber the
Assignor's ownership interest in the Mortgage Loans since the date of the
Servicing Agreement.
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(c) The Servicer and the Assignor shall have the right to amend,
modify or terminate the Servicing Agreement without the joinder of the
Assignee with respect to mortgage loans not conveyed to the Assignee
hereunder, provided, however, that such amendment, modification or termination
shall not affect or be binding on the Assignee.
2. Accuracy of Servicing Agreement.
The Servicer and the Assignor represent and warrant to the Assignee that (i)
attached hereto as Exhibit 2 is a true, accurate and complete copy of the
Servicing Agreement, (ii) the Servicing Agreement is in full force and effect
as of the date hereof, (iii) the Servicing Agreement has not been amended or
modified in any respect and (iv) no notice of termination has been given to
the Servicer under the Servicing Agreement.
3. Recognition of Purchaser.
From and after the date hereof, the Servicer shall note the transfer of the
Mortgage Loans to the Assignee in its books and records, shall recognize the
Assignee as the owner of the Mortgage Loans and shall service the Mortgage
Loans for the benefit of the Assignee pursuant to the Servicing Agreement, the
terms of which are incorporated herein by reference. It is the intention of
the Assignor, Servicer and Assignee that the Servicing Agreement shall be
binding upon and inure to the benefit of the Servicer and the Assignee and
their successors and assigns.
4. Representations and Warranties of the Assignee. The Assignee
hereby represents and warrants to the Assignor as follows:
(a) Decision to Purchase. The Assignee represents and warrants
that it is a sophisticated investor able to evaluate the risks and merits of
the transactions contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of the Assignor or the
Servicer other than those contained in the Servicing Agreement or this
Agreement.
(b) Authority. The Assignee hereto represents and warrants that it
is duly and legally authorized to enter into this Agreement and to perform its
obligations hereunder and under the Servicing Agreement.
(c) Enforceability. The Assignee hereto represents and warrants
that this Agreement has been duly authorized, executed and delivered by it and
(assuming due authorization, execution and delivery thereof by each of the
other parties hereto) constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforcement is considered in
a proceeding in equity or at law).
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5. Representations and Warranties of the Assignor. The Assignor
hereby represents and warrants to the Assignee as follows:
(a) The Assignor has been duly organized and is validly existing
as a limited partnership in good standing under the laws of the State of New
York with full power and authority (corporate and other) to enter into and
perform its obligations under the Servicing Agreement and this Assignment
Agreement.
(b) This Assignment Agreement has been duly executed and delivered
by the Assignor, and, assuming due authorization, execution and delivery by
each of the other parties hereto, constitutes a legal, valid, and binding
agreement of the Assignor, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a proceeding in
equity or at law.
(c) The execution, delivery and performance by the Assignor of
this Assignment Agreement and the consummation of the transactions
contemplated thereby do not require the consent or approval of, the giving of
notice to, the registration with, or the taking of any other action in respect
of, any state, federal or other governmental authority or agency, except such
as has been obtained, given, effected or taken prior to the date thereof.
(d) The execution and delivery of this Assignment Agreement have
been duly authorized by all necessary corporate action on the part of the
Assignor; neither the execution and delivery by the Assignor of this
Assignment Agreement, nor the consummation by the Assignor of the transactions
therein contemplated, nor compliance by the Assignor with the provisions
thereof, will conflict with or result in a breach of, or constitute a default
under, any of the provisions of the governing documents of the Assignor or any
law, governmental rule or regulation or any material judgment, decree or order
binding on the Assignor or any of its properties, or any of the provisions of
any material indenture, mortgage, deed of trust, contract or other instrument
to which the Assignor is a party or by which it is bound.
(e) There are no actions, suits or proceedings pending or, to the
knowledge of the Assignor, threatened, before or by any court, administrative
agency, arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Assignment Agreement or (B) with respect to
any other matter that in the judgment of the Assignor will be determined
adversely to the Assignor and will if determined adversely to the Assignor
materially adversely affect its ability to perform its obligations under this
Assignment Agreement.
(f) Except for the sale to the Assignee, the Assignor has not
assigned or pledged any Mortgage Note or the related Mortgage or any interest
or participation therein.
(g) The Assignor has not satisfied, canceled, or subordinated in
whole or in part, or rescinded the Mortgage, and the Assignor has not released
the Mortgaged Property from the lien of the Mortgage, in whole or in part, nor
has the Assignor executed an instrument that would effect any such release,
cancellation, subordination, or rescission. The Assignor has not released any
Mortgagor, in whole or in part, except in connection with an assumption
agreement
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or other agreement approved by the related Federal Insurer, to the extent such
approval was required.
It is understood and agreed that the representations and warranties set forth
in this Section 5 shall survive delivery of the respective Mortgage Files to
the Custodian and shall inure to the benefit of the Assignee and its assigns
notwithstanding any restrictive or qualified endorsement or assignment. Upon
the discovery by the Assignor or the Assignee and its assigns of a breach of
the foregoing representations and warranties, the party discovering such
breach shall give prompt written notice to the other parties to this
Assignment Agreement, and in no event later than two (2) Business Days from
the date of such discovery. It is understood and agreed that the obligations
of the Assignor set forth in Section 6 to repurchase a Mortgage Loan
constitute the sole remedies available to the Assignee and its assigns on
their behalf respecting a breach of the representations and warranties
contained in this Section 5. It is further understood and agreed that the
Assignor shall be deemed not to have made the representations and warranties
in this Section 5 with respect to, and to the extent of, representations and
warranties made, as to the matters covered in this Section 5, by the Servicer
in the Servicing Agreement (or any officer's certificate delivered pursuant
thereto).
It is understood and agreed that the Assignor has made no representations or
warranties to the Assignee other than those contained in this Section 5, and
no other affiliate of the Assignor has made any representations or warranties
of any kind to the Assignee.
6. Repurchase of Mortgage Loans.
Upon discovery or notice of any breach by the Assignor of any representation,
warranty, or covenant under this Assignment Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest of the
Assignee therein (it being understood that any such defect or breach shall be
deemed to have materially and adversely affected the value of the related
Mortgage Loan or the interest of the Assignee therein if the Assignee incurs a
loss as a result of such defect or breach), the Assignee promptly shall
request that the Assignor cure such breach and, if the Assignor does not cure
such breach in all material respects within 60 days from the date on which it
is notified of the breach, the Assignee may enforce the Assignor's obligation
hereunder to purchase such Mortgage Loan from the Assignee. Notwithstanding
the foregoing, however, if such breach is a Qualification Defect, such cure or
repurchase must take place within 75 days of the Defect Discovery Date.
In the event the Servicer has breached a representation or warranty under the
Servicing Agreement that is substantially identical to a representation or
warranty breached by the Assignor hereunder, the Assignee shall first proceed
against the Servicer. If the Servicer does not within 60 days after
notification of the breach, take steps to cure such breach (which may include
certifying to progress made and requesting an extension of the time to cure
such breach, as permitted under the Servicing Agreement) or purchase, or
substitute for the Mortgage Loan, the Trustee shall be entitled to enforce the
obligations of the Assignor hereunder to cure such breach or to purchase the
Mortgage Loan from the Trust. In such event, the Assignor shall succeed to the
rights of the Assignee to enforce the obligations of the Servicer to cure such
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breach or repurchase such Mortgage Loan under the terms of the related
Servicing Agreement with respect to such Mortgage Loan
Except as specifically set forth herein, the Assignee shall have no
responsibility to enforce any provision of this Assignment Agreement, to
oversee compliance hereof, or to take notice of any breach or default thereof.
7. Continuing Effect.
Except as contemplated hereby, the Servicing Agreement shall remain in full
force and effect in accordance with its terms.
8. Governing Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9. Notices.
Any notices or other communications permitted or required hereunder or under
the Servicing Agreement shall be in writing and shall be deemed conclusively
to have been given if personally delivered at or mailed by registered mail,
postage prepaid, and return receipt requested or transmitted by telex,
telegraph or telecopier and confirmed by a similar mailed writing, to: (i) in
the case of the Servicer, [______________________, _____________________] or
such address as may hereafter be furnished by the Servicer; (ii) in the case
of the Assignee, _________________, _________________, Attention:
________________________, or such other address as may hereafter be furnished
by the Assignee, and (iii) in the case of the Assignor, __________________,
Attention: _________________, or such other address as may hereafter be
furnished by the Assignor.
10. Counterparts.
This Agreement may be executed in counterparts, each of which when so executed
shall be deemed to be an original and all of which when taken together shall
constitute one and the same instrument.
11. Definitions.
Any capitalized term used but not defined in this Agreement has the same
meaning as in the Servicing Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above written.
ASSIGNEE:
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By: ______________________________
Name: _____________________________
Title: ____________________________
ASSIGNOR:
By: ______________________________
Name: _____________________________
Title: ____________________________
Acknowledged by:
SERVICER:
By: ______________________________
Name: _____________________________
Title: ____________________________
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EXHIBIT G
FORM OF SELLER'S OFFICER'S CERTIFICATE
I, ______________________, hereby certify that I am a duly elected [Vice
President] of _____________________________, a corporation organized under the
laws of the State of _________ (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of the
Articles of Incorporation of the Company which is in full force and effect on
the date hereof.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of the
by-laws of the Company which are in effect on the date hereof.
3. The execution and delivery by the Company of the Flow Seller's Warranties
and Servicing Agreement, dated as of [ ], 2003 (the "Sale and Servicing
Agreement") and the Custodial Agreement , dated as of [ ], 2003 (the
"Custodial Agreement" and, together with the Sale and Servicing Agreement, the
"Agreements") are in the ordinary course of business of the Company.
4. A true and correct copy of the resolutions of the board of directors of the
Company that approve, authorize and direct the Company to enter into the
Agreements are attached hereto as Exhibit 3.
5. Each person who, as an officer or representative of the Company, signed (a)
the Sale and Servicing Agreement, or (b) any other document delivered prior
hereto or on the date hereof in connection with any transaction described in
the Agreements was, at the respective times of such signing and delivery a
duly elected or appointed, qualified and acting officer or representative of
the Company, who holds the office set forth opposite his or her name on
Exhibit 4, and the signatures of such persons appearing on such documents are
their genuine signatures.
No proceedings for dissolution, merger, consolidation, liquidation,
conservatorship or receivership of the Company or for the sale of all or
substantially all of its assets is pending, or to my knowledge threatened, and
no such proceeding is contemplated by the Company.
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IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
Dated: By: ______________________________
Title: Vice President
I, __________________ the Secretary of
__________________________, hereby certify that
_______________________ is a duly elected and acting Vice
President of the Company and that the signature appearing above is
his genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By: ______________________________
Title: Secretary
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EXHIBIT H
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the _______________________
of National City Mortgage Co., certify to Xxxxxxx Xxxxx Mortgage Company, [the
Depositor], and the [Master Servicer] [Securities Administrator] [Trustee],
and their officers, with the knowledge and intent that they will rely upon
this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by
the Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee]
pursuant to the Agreement (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements were
made, not misleading with respect to the period of time covered by the
Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement
and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material
H-1
instances of noncompliance described in such reports have been disclosed
to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:_______________________________
By:_________________________________
Name:
Title:
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EXHIBIT I
FORM OF WARRANTY XXXX OF SALE
On this _______ day of ________, 200__, National City Mortgage Co. ("Seller")
as the Seller under that certain Second Amended and Restated Flow Seller's
Warranties and Servicing Agreement, dated as of November 1, 2005 (the
"Agreement") does hereby sell, transfer, assign, set over and convey to
Xxxxxxx Xxxxx Mortgage Company as Purchaser under the Agreement, without
recourse, but subject to the terms of the Agreement, all rights, title and
interest of the Seller in and to the Mortgage Loans listed on the Mortgage
Loan Schedule attached hereto, together with the related Mortgage Files and
all rights and obligations arising under the documents contained therein.
Pursuant to Section 2.01 of the Agreement, the Seller has delivered to the
Purchaser or its custodian the Mortgage Loan Documents for each Mortgage Loan
to be purchased as set forth in the Agreement. The contents of each related
Servicing File required to be maintained and retained by the Seller to service
the Mortgage Loans pursuant to the Agreement and thus not delivered to the
Purchaser are and shall be held in trust by the Seller for the benefit of the
Purchaser as the owner thereof. The Seller's possession of any portion of each
such Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Agreement,
and such retention and possession by the Seller shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, and the contents
of the Mortgage File and Servicing File is vested in the Purchaser and the
ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in such custodial capacity
only.
The Seller confirms to the Purchaser that the representations and warranties
set forth in Sections 2.6, 3.1 and 3.2 of the Agreement are true and correct
as of the date hereof, and that all statements made in the Sellers' Officer's
Certificate and all attachments thereto remain complete, true and correct in
all respects as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
NATIONAL CITY MORTGAGE CO.
(Seller)
By: ______________________________
Name:
Title:
I-1
EXHIBIT J
COMPANY GUIDE
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EXHIBIT K
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by National City Mortgage Co. [Name of Subservicer] shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
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Applicable
Servicing Criteria Servicing Criteria
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Reference Criteria
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General Servicing Considerations
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1122(d)(1)(i) Policies and procedures are instituted to monitor
any performance or other triggers and events of
default in accordance with the transaction
agreements.
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1122(d)(1)(ii) If any material servicing activities are outsourced
to third parties, policies and procedures are
instituted to monitor the third party's performance
and compliance with such servicing activities.
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1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
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1122(d)(1)(iv) A fidelity bond and errors and omissions policy is
in effect on the party participating in the
servicing function throughout the reporting period
in the amount of coverage required by and otherwise
in accordance with the terms of the transaction
agreements.
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Cash Collection and Administration
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1122(d)(2)(i) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related
bank clearing accounts no more than two business
days following receipt, or such other number of
days specified in the transaction agreements.
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
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K-1
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Applicable
Servicing Criteria Servicing Criteria
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Reference Criteria
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1122(d)(2)(iii) Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances,
are made, reviewed and approved as specified in the
transaction agreements.
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1122(d)(2)(iv) The related accounts for the transaction, such as
cash reserve accounts or accounts established as a
form of overcollateralization, are separately
maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
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1122(d)(2)(v) Each custodial account is maintained at a federally
insured depository institution as set forth in the
transaction agreements. For purposes of this
criterion, "federally insured depository
institution" with respect to a foreign financial
institution means a foreign financial institution
that meets the requirements of Rule 13k- 1(b)(1) of
the Securities Exchange Act.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
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1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for
all asset-backed securities related bank accounts,
including custodial accounts and related bank
clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30
calendar days after the bank statement cutoff date,
or such other number of days specified in the
transaction agreements; (C) reviewed and approved
by someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are
resolved within 90 calendar days of their original
identification, or such other number of days
specified in the transaction agreements.
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Investor Remittances and Reporting
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1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
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K-2
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Applicable
Servicing Criteria Servicing Criteria
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Reference Criteria
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requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other
terms set forth in the transaction agreements; (B)
provide information calculated in accordance with
the terms specified in the transaction agreements;
(C) are filed with the Commission as required by
its rules and regulations; and (D) agree with
investors' or the trustee's records as to the total
unpaid principal balance and number of mortgage
loans serviced by the Servicer.
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1122(d)(3)(ii) Amounts due to investors are allocated and remitted
in accordance with timeframes, distribution
priority and other terms set forth in the
transaction agreements.
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1122(d)(3)(iii) Disbursements made to an investor are posted within
two business days to the Servicer's investor
records, or such other number of days specified in
the transaction agreements.
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1122(d)(3)(iv) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment,
or custodial bank statements.
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Pool Asset Administration
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1122(d)(4)(i) Collateral or security on mortgage loans is
maintained as required by the transaction
agreements or related mortgage loan documents.
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1122(d)(4)(ii) Mortgage loan and related documents are safeguarded
as required by the transaction agreements
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1122(d)(4)(iii) Any additions, removals or substitutions to the
asset pool are made, reviewed and approved in
accordance with any conditions or requirements in
the transaction agreements.
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1122(d)(4)(iv) Payments on mortgage loans, including any payoffs,
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor
records maintained no more than two business days
after receipt, or such other number of days
specified in the transaction agreements, and
allocated to principal,
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K-3
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Applicable
Servicing Criteria Servicing Criteria
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Reference Criteria
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interest or other items (e.g., escrow) in accordance with
the related mortgage loan documents.
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1122(d)(4)(v) The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to
an obligor's unpaid principal balance.
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1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications
or re- agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
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1122(d)(4)(vii) Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu
of foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded
in accordance with the timeframes or other
requirements established by the transaction
agreements.
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1122(d)(4)(viii) Records documenting collection efforts are
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at least
a monthly basis, or such other period specified in
the transaction agreements, and describe the
entity's activities in monitoring delinquent
mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g.,
illness or unemployment).
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1122(d)(4)(ix) Adjustments to interest rates or rates of return
for mortgage loans with variable rates are computed
based on the related mortgage loan documents.
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1122(d)(4)(x) Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or
such other period specified in the transaction
agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable
mortgage loan documents
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K-4
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Applicable
Servicing Criteria Servicing Criteria
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Reference Criteria
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and state laws; and (C) such funds are
returned to the obligor within 30 calendar
days of full repayment of the related mortgage
loans, or such other number of days specified in
the transaction agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax
or insurance payments) are made on or before the
related penalty or expiration dates, as indicated
on the appropriate bills or notices for such
payments, provided that such support has been
received by the servicer at least 30 calendar days
prior to these dates, or such other number of days
specified in the transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
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1122(d)(4)(xiii) Disbursements made on behalf of an obligor are
posted within two business days to the obligor's
records maintained by the servicer, or such other
number of days specified in the transaction
agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in accordance
with the transaction agreements.
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1122(d)(4)(xv) Any external enhancement or other support,
identified in Item 1114(a)(1) through (3) or Item
1115 of Regulation AB, is maintained as set forth
in the transaction agreements.
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K-5
National City Mortgage Co. [NAME OF
SUBSERVICER]
Date:__________________________________
By:
Name:
K-6
EXHIBIT 3
Form of Exhibit K to the Servicing Agreement
--------------------------------------------
EXHIBIT K
Form of Annual Certification
I, ______________________, Vice President of National City Mortgage Co., (the
"Servicer"), certify to __________________, and its officers, directors,
agents and affiliates (in its role as ____________, the "____________"), and
with the knowledge and intent that they will rely upon this certification,
that:
(i) Based on my knowledge, the information relating to the Mortgage Loans and
the servicing thereof submitted by the Servicer to the ___________ which is
used in connection with preparation of the reports on Form 8-K and the annual
report on Form 10-K filed with the Securities and Exchange Commission with
respect to each transaction listed on the attached Exhibit 1, taken as a
whole, does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
date of this certification;
(ii) The servicing information required to be provided to the _____________ by
the Servicer under the Amended and Restated Flow Seller's Warranties and
Servicing Agreement, between National City Mortgage Co. and Xxxxxxx Xxxxx
Mortgage Company, dated as of August 1, 2003, as amended by Amendment No. 1,
dated July 1, 2004, between Xxxxxxx Sachs Mortgage Company and National City
Mortgage Co., (together the "Servicing Agreement") has been provided to the
______________;
(iii) I am responsible for reviewing the activities performed by the Servicer
under the Servicing Agreement and based upon the review required by the
relevant Servicing Agreement, and except as disclosed in the Annual Statement
of Compliance, the Annual Independent Public Accountant's Servicing Report and
all servicing reports, officer's certificates and other information relating
to the servicing of the Mortgage Loans submitted to the ___________, the
Servicer has, as of the date of this certification fulfilled its obligations
under the Servicing Agreement; and
(iv) I have disclosed to the ___________ all significant deficiencies relating
to the Servicer's compliance with the minimum servicing standards in
accordance with a review conducted in compliance with the Uniform Single
Attestation Program for Mortgage Bankers or similar standard as set forth in
the relevant Servicing Agreement.
(v) The Servicer shall indemnify and hold harmless the ___________ and its
officers, directors, agents and affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach by the Servicer or any of its officers, directors, agents or affiliates
of its obligations under this Certification or the negligence, bad faith or
willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or
3-1
insufficient to hold harmless the ___________, then the Servicer agrees that
it shall contribute to the amount paid or payable by the ___________ as a
result of the losses, claims, damages or liabilities of the ___________ in
such proportion as is appropriate to reflect the relative fault of the
___________ on the one hand and the Servicer on the other in connection with a
breach of the Servicer's obligations under this Certification or the
Servicer's negligence, bad faith or willful misconduct in connection
therewith.
Any capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Servicing Agreement.
3-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Servicer.
Dated:
By:______________________________
Name:
Title
3-3
