COUNTRYWIDE HOME LOANS, INC. a Seller PARK MONACO INC. a Seller CWHEQ, INC. Purchaser PURCHASE AGREEMENT Dated as of May 31, 2007 REVOLVING HOME EQUITY LOAN ASSET BACKED NOTES, Series 2007-E
EXHIBIT
99.2
Exhibit
99.2
EXECUTION
COPY
COUNTRYWIDE
HOME LOANS, INC.
a
Seller
PARK
MONACO INC.
Purchaser
__________________________________
Dated
as
of May 31, 2007
__________________________________
REVOLVING
HOME EQUITY LOAN ASSET BACKED NOTES,
Series
2007-E
Page
ARTICLE
I
DEFINITIONS
Section
1.01.
|
Definitions
|
1
|
ARTICLE
II
SALE
OF
MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section
2.01.
|
Sale
of the Mortgage
Loans
|
2
|
Section
2.02.
|
Obligations
of Sellers Upon
Sale
|
3
|
Section
2.03.
|
Payment
of Purchase Price for the
Mortgage Loans
|
6
|
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES; REMEDIES FOR BREACH
Section
3.01.
|
Seller
Representations and
Warranties
|
7
|
Section
3.02.
|
Seller
Representations and
Warranties Relating to the Mortgage Loans
|
9
|
ARTICLE
IV
SELLERS’
COVENANTS
Section
4.01.
|
Covenants
of the
Sellers
|
22
|
ARTICLE
V
SERVICING
Section
5.01.
|
Servicing
|
22
|
ARTICLE
VI
TERMINATION
Section
6.01.
|
Termination
|
22
|
ARTICLE
VII
MISCELLANEOUS
PROVISIONS
Section
7.01.
|
Amendment
|
22
|
Section
7.02.
|
Governing
Law
|
23
|
Section
7.03.
|
Notices
|
23
|
Section
7.04.
|
Severability
of
Provisions
|
23
|
Section
7.05.
|
Counterparts;
Electronic
Delivery
|
23
|
i
Section
7.06.
|
Further
Agreements
|
23
|
Section
7.07.
|
Successors
and Assigns:
Assignment of Purchase Agreement
|
24
|
Section
7.08.
|
Survival
|
24
|
SCHEDULES
AND ANNEXES
Schedule
I
|
MORTGAGE
LOAN SCHEDULE
|
Sch-I-1
|
Schedule
II
|
STANDARD
& POOR'S GLOSSARY
|
Sch-II-1
|
Annex
1
|
ADOPTION
ANNEX
|
Xxx-1-1
|
ii
This
PURCHASE AGREEMENT, dated as of May 31, 2007 (the
“Agreement”),
between COUNTRYWIDE HOME LOANS, INC., a
New York corporation, as a seller (“CHL” or a
“Seller”), Park Monaco Inc.,
a Delaware corporation,
as a seller (“Park Monaco” or a
“Seller,” and together with CHL,
the
“Sellers”), and CWHEQ, Inc., a Delaware corporation
(the “Purchaser”),
WHEREAS,
each Seller is the owner of the applicable notes or other evidence of
indebtedness indicated on Schedule I as owned by that Seller, and certain other
notes or other evidence of indebtedness made or to be made in the future, and
Related Documentation; and
WHEREAS,
each Seller wants to sell its Mortgage Loans to the Purchaser pursuant to this
Agreement; and
NOW,
THEREFORE, the parties agree as follows.
ARTICLE
I
DEFINITIONS
Section
1.01. Definitions.
Capitalized
terms used in this Agreement that are not otherwise defined have the meanings
given to them in the Master Glossary of Defined Terms attached as Annex 1 to
the
Indenture dated as of the date hereof between CWHEQ Revolving Home Equity Loan
Trust, Series 2007-E and The Bank of New York, as indenture trustee. In
addition, Section 1.04 (Rules of Construction) of the Indenture is incorporated
by reference with appropriate substitution of this Agreement for references
in
that Section to the Indenture so that the language of that Section will read
appropriately as applying to this Agreement.
ARTICLE
II
SALE
OF
MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section
2.01. Sale
of the Mortgage Loans.
(a) The
Initial Mortgage Loans. Concurrently with the execution and delivery of
this Agreement, CHL, with respect to each Initial Mortgage Loan it owns as
indicated on Schedule I, hereby transfers to the Purchaser, without recourse,
all of its right, title, and interest existing now or in the future
in
(1) that
Mortgage Loan, including its Asset Balance (including all Additional Balances),
the related Mortgage File, all property that secures that Mortgage Loan, and
all
collections received on it after the Cut-off Date (excluding payments due by
the
Cut-off Date);
(2) property
that secured that Mortgage Loan that is acquired by foreclosure or deed in
lieu
of foreclosure;
(3) its
rights under the hazard insurance policies related to the mortgages that secure
the Mortgage Loans;
(4) all
rights under any guaranty executed in connection with that Mortgage
Loan;
(5) all
other
assets included or to be included in the Trust for the benefit of the
Noteholders and the Credit Enhancer; and
(6) all
proceeds of the foregoing.
Park
Monaco, with respect to each Initial Mortgage Loan it owns as indicated on
Schedule I, hereby transfers to the Purchaser, without recourse, all of its
right, title, and interest existing now or in the future in
(1) that
Mortgage Loan, including its Asset Balance (including all Additional Balances),
the related Mortgage File, all property that secures that Mortgage Loan, and
all
collections received on it after the Cut-off Date (excluding payments due by
the
Cut-off Date);
(2) property
that secured that Mortgage Loan that is acquired by foreclosure or deed in
lieu
of foreclosure;
(3) its
rights under the hazard insurance policies related to the mortgages that secure
the Mortgage Loans;
(4) all
rights under any guaranty executed in connection with that Mortgage
Loan;
2
(5) all
other
assets included or to be included in the Trust for the benefit of the
Noteholders and the Credit Enhancer; and
(6) all
proceeds of the foregoing.
The
Additional Home Equity Loans. The Purchaser may use the funds in the
Additional Loan Account to purchase Additional Home Equity Loans on any
Subsequent Closing Date designated by the Purchaser by the Latest Subsequent
Closing Date. On each Subsequent Closing Date, each Seller shall deliver a
Transfer Document (properly completed and executed by the Seller) to the
Purchaser. When each Seller delivers a Transfer Document, that Seller hereby
transfers to the Purchaser without recourse, and the Purchaser purchases and
shall effect payment for, all of its right, title, and interest in each
Additional Home Equity Loan identified in the Transfer Document, including
its
Asset Balance (including all Additional Balances) and all collections received
on it after the relevant Subsequent Cut-off Date (excluding payments due by
the
Subsequent Cut-off Date) and all proceeds of the foregoing.
(b) By
the
sale of a Mortgage Loan and its Additional Balances, each Seller has sold to
the
Purchaser, and the Purchaser has purchased from each Seller, each future draw
of
new borrowing under the related Credit Line Agreement. The Purchaser shall
pay
the applicable Seller for each Additional Balance in cash in an amount equal
to
the principal amount of the Additional Balance as it arises. The Trust, the
applicable Seller, and the Purchaser may agree to a netting arrangement in
connection with this transaction, when appropriate, rather than actually moving
cash.
Section
2.02. Obligations
of Sellers Upon Sale.
In
connection with the transfers pursuant to Section 2.01(a), each Seller further
agrees, at its own expense:
(a) to
deliver to the Purchaser by the Closing Date a Mortgage Loan Schedule containing
an accurate list of all Initial Mortgage Loans sold by it, specifying for each
Initial Mortgage Loan, among other things, its account number and its Cut-off
Date Asset Balance;
(b) to
indicate in its books and records that the applicable Mortgage Loans have been
sold to the Indenture Trustee, as assignee of the Purchaser, pursuant to this
Agreement by the Closing Date for the Initial Mortgage Loans, and by each
Subsequent Closing Date for the related Additional Home Equity
Loans;
(c) to
deliver to the Purchaser, or at the Purchaser’s direction to the Indenture
Trustee and the Owner Trustee, and the Credit Enhancer, an Officer’s Certificate
confirming the satisfaction of each of the conditions precedent in Section
2.01(b) of the Sale and Servicing Agreement by each Subsequent Closing Date;
and
3
(d) to
deliver to the Purchaser, or at the Purchaser’s direction to the Indenture
Trustee, a revised Mortgage Loan Schedule reflecting the addition of the
Additional Home Equity Loans within 15 days following each Subsequent Closing
Date.
The
Initial Mortgage Loan Schedule containing the Mortgage Loans sold by both
Sellers is Exhibit A to the Sale and Servicing Agreement and shall also be
attached as Schedule I to this Agreement and is hereby incorporated into this
Agreement.
Each
Seller agrees to perfect and protect the Purchaser’s interest in each Mortgage
Loan transferred by it pursuant to Section 2.01(a) and its proceeds by
preparing, executing, and filing a UCC1 Financing Statement with the Secretary
of State in the State of New York or the Secretary of State in the State of
Delaware, as applicable, describing the Mortgage Loans and naming the applicable
Seller as debtor and the Purchaser as secured party and indicating that the
Mortgage Loans have been assigned to the Trust and all necessary Continuation
Statements and any additional UCC1 Financing Statements due to a change in
the
name or the state of incorporation of that Seller. The Financing Statement
shall
be filed by the Closing Date. This Financing Statement will state in bold-faced
type that a purchase of the Mortgage Loans included in the collateral covered
by
the Financing Statement from the debtor will violate the rights of the secured
party and its assignee.
The
Purchaser agrees to perfect and protect the Trust’s interest in each Mortgage
Loan and its proceeds by preparing, executing, and filing a UCC1 Financing
Statement with the Secretary of State in the State of Delaware describing the
Mortgage Loans and naming the Purchaser as debtor and the Trust as secured
party
(and indicating that the Mortgage Loans have been pledged to the Indenture
Trustee) and all necessary Continuation Statements and any additional UCC1
Financing Statements due to a change in the name or the state of incorporation
of the Purchaser. The Financing Statement shall be filed by the Closing Date.
This Financing Statement will state in bold-faced type that a purchase of the
Mortgage Loans included in the collateral covered by the Financing Statement
from the debtor will violate the rights of the secured party and its
assignee.
In
connection with any transfer by a Seller, it shall deliver to the order of
the
Purchaser the following documents for each Mortgage Loan transferred by that
Seller (the “Related Documentation”):
(1) the
original Mortgage Note endorsed in blank or, if the original Mortgage Note
has
been lost or destroyed and not replaced, an original lost note affidavit from
the Sponsor stating that the original Mortgage Note was lost, misplaced, or
destroyed, together with a copy of the related Mortgage Note;
(2) unless
the Mortgage Loan is registered on the MERS® System, an original assignment of
mortgage in blank in recordable form;
4
(3) the
original recorded mortgage with evidence of recording on it (noting the presence
of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan) or, if the original recorded
mortgage with evidence of recording on it cannot be delivered by the Closing
Date because of a delay caused by the public recording office where the original
Mortgage has been delivered for recordation or because the original Mortgage
has
been lost, the Sponsor shall deliver to the Indenture Trustee an accurate copy
of the mortgage, together with (i) when the delay is caused by the public
recording office, an Officer’s Certificate of the Sponsor or the Purchaser
stating that the original mortgage has been dispatched to the appropriate public
recording official or (ii) when the original mortgage has been lost, a
certificate by the appropriate county recording office where the mortgage is
recorded;
(4) any
original intervening assignments needed for a complete chain of title to the
Trust with evidence of recording on them, or, if any original intervening
assignment has not been returned from the applicable recording office or has
been lost, an accurate copy of it, together with (i) when the delay is caused
by
the public recording office, an Officer’s Certificate of the Sponsor or the
Purchaser stating that the original intervening assignment has been dispatched
to the appropriate public recording official for recordation or (ii) when the
original intervening assignment has been lost, a certificate by the appropriate
county recording office where the mortgage is recorded;
(5) a
title
policy for each Mortgage Loan with a Credit Limit in excess of
$100,000;
(6) the
original of any guaranty executed in connection with the Mortgage
Note;
(7) the
original of each assumption, modification, consolidation, or substitution
agreement relating to the Mortgage Loan; and
(8) any
security agreement, chattel mortgage, or equivalent instrument executed in
connection with the Mortgage.
The
Related Documentation for the Initial Mortgage Loans will be
delivered:
(1) no
later than the Closing Date, with respect to at least 50% of the Initial
Mortgage Loans,
(2) no
later than the twentieth day after the Closing Date, with respect to at least
40% of the Initial Mortgage Loans in addition to those delivered on the Closing
Date, and
(3) within
thirty days following the Closing Date, with respect to the remaining Initial
Mortgage Loans.
5
The
Related Documentation for the Additional Home Equity Loans will be
delivered:
(1) no
later than relevant Subsequent Closing Date, with respect to no less than 10%
of
the relevant Additional Home Equity Loans; and
(2) within
twenty days following the relevant Subsequent Closing Date, with respect to
the
remaining relevant Additional Home Equity Loans.
Each
Seller confirms to the Purchaser that, as of the Closing Date, it has caused
the
portions of the Electronic Ledger relating to the Initial Mortgage Loans
maintained by that Seller to be clearly and unambiguously marked to indicate
that the Initial Mortgage Loans have been sold to the Purchaser, and sold by
the
Purchaser to the Trust, and Granted by the Trust to the Indenture Trustee,
and
that a purchase of those Mortgage Loans from that Seller or the Purchaser will
violate the rights of the Trust, as secured party with respect to those Mortgage
Loans. By the relevant Subsequent Closing Date or the applicable date of
substitution, as applicable, CHL shall cause the portions of the Electronic
Ledgers relating to the relevant Additional Home Equity Loans or Eligible
Substitute Mortgage Loans, as the case may be, to be clearly and unambiguously
marked, and shall make appropriate entries in its general accounting records,
to
indicate that those Mortgage Loans have been transferred to the Trust at the
direction of the Purchaser and that they have been Granted by the Trust to
the
Indenture Trustee, and that a purchase of the Mortgage Loans from CHL or the
Purchaser will violate the rights of the Trust, as secured party with respect
to
those Mortgage Loans.
The
Purchaser accepts all right, title, and interest of each of the Sellers existing
now or in the future in the Mortgage Loans and other property transferred to
it
pursuant to this Section.
The
transfer of the Mortgage Loans is a sale by each Seller to the Purchaser of
all
its interest in the applicable Mortgage Loans and other property described
above. However, to provide for the possibility that either transfer might be
characterized as a transfer for security and not as a sale, each Seller hereby
Grants to the Purchaser a Security Interest in all of its right, title, and
interest in the applicable Mortgage Loans and other property described above,
whether existing now or in the future, to secure all of that its obligations
under this Agreement; and this Agreement shall constitute a Security Agreement
under applicable law.
Section
2.03. Payment
of Purchase Price for the Mortgage Loans.
(a) In
consideration of the sale of the Initial Mortgage Loans from each of the Sellers
to the Purchaser on the Closing Date, the Purchaser agrees to transfer to the
applicable Seller on the Closing Date the purchase price for the applicable
Initial Mortgage Loans provided in the Adoption Annex attached as Annex 1 to
this Agreement (the “Adoption Annex”).
6
(b) In
consideration of the sale of the Additional Home Equity Loans from the Seller
to
the Purchaser on each Subsequent Closing Date, the Purchaser agrees to cause
the
Trust to pay to the Seller, when the conditions to the release of the purchase
price for the Additional Home Equity Loans under the Sale and Servicing
Agreement have been met, an amount equal to their Cut-off Date Asset
Balance.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES; REMEDIES FOR BREACH
Section
3.01. Sellers
Representations and Warranties.
(a) CHL
represents and warrants to the Purchaser as of the Closing Date:
(1) CHL
is a
New York corporation, validly existing and in good standing under the laws
of
the State of New York, and has the corporate power to own its assets and to
transact the business in which it is currently engaged. CHL is duly qualified
to
do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or any
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of CHL;
(2) CHL
has
the power and authority to make, execute, deliver, and perform this Agreement
and all of the transactions contemplated by this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery, and performance
of this Agreement. When executed and delivered, this Agreement will constitute
the valid and legally binding obligation of CHL enforceable in accordance with
its terms;
(3) CHL
is
not required to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau, or agency in connection with the execution,
delivery, performance, validity, or enforceability of this Agreement, except
for
any consents, licenses, approvals or authorizations, or registrations or
declarations, that have been obtained or filed, as the case may be, before
the
Closing Date;
(4) The
execution, delivery, and performance of this Agreement by the Seller will not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to the Seller or any provision of the certificate of
incorporation or bylaws of CHL, or constitute a material breach of any mortgage,
indenture, contract, or other agreement to which CHL is a party or by which
CHL
may be bound; and
7
(5) No
litigation or administrative proceeding of or before any court, tribunal, or
governmental body is currently pending, or to the knowledge of CHL threatened,
against CHL or any of its properties or with respect to this Agreement or the
Notes that in the opinion of CHL has a reasonable likelihood of resulting in
a
material adverse effect on the transactions contemplated by this
Agreement.
(6) The
representations in Section 3.01(b) are true.
(b) Park
Monaco represents and warrants to the Purchaser as of the Closing
Date:
(1) Park
Monaco is a Delaware corporation, validly existing and in good standing under
the laws of the State of Delaware, and has the corporate power to own its assets
and to transact the business in which it is currently engaged. Park Monaco
is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which the character of the business transacted by it
or
any properties owned or leased by it requires such qualification and in which
the failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of Park
Monaco.
(2) Park
Monaco has the power and authority to make, execute, deliver, and perform this
Agreement and all of the transactions contemplated by this Agreement, and has
taken all necessary corporate action to authorize the execution, delivery,
and
performance of this Agreement. When executed and delivered, this Agreement
will
constitute the valid and legally binding obligation of Park Monaco enforceable
in accordance with its terms;
(3) Park
Monaco is not required to obtain the consent of any other party or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau, or agency in connection with the execution,
delivery, performance, validity, or enforceability of this Agreement, except
for
any consents, licenses, approvals or authorizations, or registrations or
declarations, that have been obtained or filed, as the case may be, before
the
Closing Date;
(4) The
execution, delivery, and performance of this Agreement by Park Monaco will
not
violate any provision of any existing law or regulation or any order or decree
of any court applicable to Park Monaco or any provision of the certificate
of
incorporation or bylaws of Park Monaco, or constitute a material breach of
any
mortgage, indenture, contract, or other agreement to which Park Monaco is a
party or by which Park Monaco may be bound; and
(5) No
litigation or administrative proceeding of or before any court, tribunal, or
governmental body is currently pending, or to the knowledge of Park Monaco
threatened, against Park Monaco or any of its properties or with respect to
this
Agreement or the Notes that in the opinion of Park Monaco has a reasonable
likelihood of resulting in a material adverse effect on the transactions
contemplated by this Agreement.
8
(c) The
representations and warranties in this Section 3.01 shall survive the transfer
of the Mortgage Loans to the Purchaser. CHL shall cure a breach of any of the
representations and warranties of CHL and Park Monaco in accordance with the
Sale and Servicing Agreement. The remedy specified in the Sale and Servicing
Agreement shall constitute the sole remedy against a Seller with respect to
any
breach.
Section
3.02. Seller
Representations and Warranties Relating to the Mortgage
Loans.
(a) CHL
represents and warrants to the Purchaser as of the Cut-off Date, unless
specifically stated otherwise:
(1) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
this
Agreement constitutes a valid and legally binding obligation of CHL, enforceable
against CHL in accordance with its terms.
(2) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
either
(A) this
Agreement constitutes a valid transfer to the Purchaser of all right, title,
and
interest of each of the Sellers in the applicable Mortgage Loans, and all
collections received in respect of the applicable Mortgage Loans after the
Cut-off Date or Subsequent Cut-off Date, as applicable (excluding payments
due
by the Cut-off Date or Subsequent Cut-off Date, as applicable), all proceeds
of
the applicable Mortgage Loans, and all other property specified in
Section 2.01(a) or (b), and the Sale and Servicing Agreement constitutes a
valid transfer to the Trust of the foregoing property and all other property
specified in Section 2.01(a) or (b) of the Sale and Servicing Agreement
such that, on execution of the Sale and Servicing Agreement, it is owned by
the
Trust free of all liens and other encumbrances, and is part of the corpus of
the
Trust transferred to the Trust by the Purchaser, and upon payment for the
Additional Balances, this Agreement and the Sale and Servicing Agreement will
constitute a valid transfer to the Trust of all interest of each of the Sellers
in the Additional Balances, all proceeds of the Additional Balances, and all
other property specified in Section 2.01(a) of the Sale and Servicing
Agreement relating to the Additional Balances free of all liens and other
encumbrances, and the Indenture constitutes a valid Grant of a Security Interest
to the Indenture Trustee in that property, and the Indenture Trustee has a
first
priority perfected Security Interest in the property, subject to the effect
of
Section 9-315 of the UCC with respect to collections on the Mortgage Loans
that are deposited in the Collection Account in accordance with the next to
last
paragraph of Section 3.02(b) of the Sale and Servicing Agreement,
or
9
(B) this
Agreement or the Sale and Servicing Agreement, as appropriate, constitutes
a
Grant of a Security Interest to the Owner Trustee on behalf of the Trust and
the
Indenture constitutes a Grant of a Security Interest to the Indenture Trustee
in
the property described in clause (A) above. If this Agreement and the Sale
and Servicing Agreement constitute the Grant of a Security Interest to the
Trust
and the Indenture constitutes a Grant of a Security Interest to the Indenture
Trustee in such property, the Indenture Trustee will have a first priority
perfected Security Interest in the property, subject to the effect of
Section 9-315 of the UCC with respect to collections on the Mortgage Loans
that are deposited in the Collection Account in accordance with the next to
last
paragraph of Section 3.02(b) of the Sale and Servicing Agreement. This
Security Interest is enforceable as such against creditors of and purchasers
from the Trust, the Purchaser, and each of the Sellers.
(3) CHL
has
not authorized the filing of and is not aware of any financing statements
against either Seller that include a description of collateral covering the
Collateral other than any financing statement (A) relating to the Security
Interests granted to the Depositor, the Trust, or the Indenture Trustee under
this Agreement, pursuant to the Sale and Servicing Agreement, or pursuant to
the
Indenture, (B) that has been terminated, or (C) that names the
Depositor, the Trust, or the Indenture Trustee as secured party.
(4) As
of the
Closing Date, the information in the Mortgage Loan Schedule for the Initial
Mortgage Loans is correct in all material respects. As of the relevant
Subsequent Closing Date with respect to any Additional Home Equity Loans, the
information in the Mortgage Loan Schedule for the relevant Additional Home
Equity is correct in all material respects. As of the applicable date of
substitution for an Eligible Substitute Mortgage Loan, the information with
respect to the Eligible Substitute Mortgage Loan in the Mortgage Loan Schedule
is correct in all material respects. As of the date any Additional Balance
is
created, the information as to the Mortgage Loan identification number and
the
Additional Balance of that Mortgage Loan reported for inclusion in the Mortgage
Loan Schedule is correct in all material respects.
10
(5) The
applicable Mortgage Loans have not been assigned or pledged, and the related
Seller is their sole owner and holder free of any liens, claims, encumbrances,
participation interests, equities, pledges, charges, or Security Interests
of
any nature, and has full authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage Loans, to
transfer them pursuant to this Agreement.
(6) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
related Mortgage Note and the mortgage for each Mortgage Loan have not been
assigned or pledged, and immediately before the sale of the Mortgage Loans
to
the Purchaser, the related Seller was the sole owner and holder of the Mortgage
Loan free of any liens, claims, encumbrances, participation interests, equities,
pledges, charges, or Security Interests of any nature, and has full authority,
under all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to transfer it pursuant to this
Agreement.
(7) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
related mortgage is a valid and subsisting first or second lien on the property
described in it, as shown on the Mortgage Loan Schedule with respect to each
related Mortgage Loan, and as of the Cut-off Date, relevant Subsequent Closing
Date, or date of substitution, as applicable, the related Mortgaged Property
is
free of all encumbrances and liens having priority over the first or second
lien, as applicable, of the mortgage except for liens for
(A) real
estate taxes and special assessments not yet delinquent;
(B) any
first
mortgage loan secured by the Mortgaged Property and specified on the Mortgage
Loan Schedule;
(C) covenants,
conditions and restrictions, rights of way, easements, and other matters of
public record as of the date of recording that are acceptable to mortgage
lending institutions generally; and
(D) other
matters to which like properties are commonly subject that do not materially
interfere with the benefits of the security intended to be provided by the
mortgage.
11
(8) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
no
obligor has a valid offset, defense, or counterclaim under any Credit Line
Agreement or mortgage.
(9) To
the
best knowledge of CHL, as of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no related Mortgaged Property
has any delinquent recording or other tax or fee or assessment lien or
governmental charge against it, other than those that have been or will be
paid
by the Seller.
(10) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
no
proceeding is pending or, to the best knowledge of CHL, threatened for the
total
or partial condemnation of the related Mortgaged Property, and the property
is
free of material damage and is in good repair.
(11) To
the
best knowledge of CHL, as of the Closing Date with respect to the Initial
Mortgage Loans, the relevant Subsequent Closing Date with respect to any
Additional Home Equity Loans, or the applicable date of substitution with
respect to any Eligible Substitute Mortgage Loan, no mechanics’ or similar liens
or claims have been filed for work, labor, or material affecting the related
Mortgaged Property that are, or may be, liens prior or equal to the lien of
the
related mortgage, except liens that are fully insured against by the title
insurance policy referred to in clause (16).
(12) As
of the
Initial Cut-off Date, no Initial Mortgage Loan is 60 days or more delinquent
and
no more than the applicable percentage specified in the Adoption Annex of the
Initial Mortgage Loans being transferred on the Closing Date (by Cut-off Date
Loan Balance) were 30-59 days delinquent; and as of the applicable date on
which
any other Mortgage Loan is being subsequently transferred, no such Mortgage
Loan
is 30 days or more delinquent.
(13) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
Mortgage File for each Mortgage Loan contains each of the documents specified
to
be included in it.
(14) At
origination, each Mortgage Loan and the related Mortgage Note complied in all
material respects with applicable local, state, and federal laws, including
all
applicable predatory and abusive lending laws, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity, or disclosure laws applicable to the Mortgage Loan, and the
servicing practices used by the Master Servicer with respect to each Mortgage
Loan have been consistent with the practices and the degree of skill and care
the Master Servicer exercises in servicing for itself loans that it owns that
are comparable to the Mortgage Loans.
12
(15) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
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; and “High Cost
Loan” and “Covered Loan” have the
meaning assigned to them in the Standard & Poor’s LEVELS® Glossary
attached
as Schedule II (the “Glossary”) where
(x) a
“High Cost Loan” is each loan identified in the column
“Category under applicable anti-predatory lending
law” of the table entitled
“Standard & Poor’s High Cost Loan Categorization” in the Glossary as each
such loan is defined in the applicable anti-predatory lending law of the state
or jurisdiction specified in such table and
(y) “Covered
Loan” is each loan identified in the column “Category under
applicable anti-predatory lending law” of the table entitled “Standard &
Poor’s Covered Loan Categorization” in the Glossary as each such loan is defined
in the applicable anti-predatory lending law of the state or jurisdiction
specified in such table.
(16) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
either a lender’s title insurance policy or binder was issued or a guaranty of
title customary in the relevant jurisdiction was obtained, on the date of
origination of the Mortgage Loan being transferred on the relevant date and
each
policy is valid and remains in full force.
(17) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
none
of the Mortgaged Properties is a mobile home or a manufactured housing unit
that
is not considered or classified as part of the real estate under the laws of
the
jurisdiction in which it is located.
13
(18) No
more
than the percentage specified in the Adoption Annex of the Initial Mortgage
Loans, by aggregate principal balance of the Initial Mortgage Loans, are secured
by Mortgaged Properties located in one United States postal zip
code.
(19) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
Combined Loan-to-Value Ratio for each Mortgage Loan was not in excess of the
percentage specified in the Adoption Annex.
(20) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
no
selection procedure reasonably believed by CHL to be adverse to the interests
of
the Transferor, the Noteholders, or the Credit Enhancer was used in selecting
the Mortgage Loans.
(21) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
neither Seller has transferred the Mortgage Loans to the Trust with any intent
to hinder, delay, or defraud any of its creditors.
(22) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
Minimum Monthly Payment with respect to any Mortgage Loan is not less than
the
interest accrued at the applicable Loan Rate on the average daily Asset Balance
during the interest period relating to the date on which the Minimum Monthly
Payment is due.
(23) The
Mortgage Notes constitute either “instruments” or “general intangibles” as
defined in the UCC.
(24) By
the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or within 30
days
of the applicable date of substitution with respect to any Eligible Substitute
Mortgage Loan, the Sponsor will file UCC1 financing statements in the proper
filing office in the appropriate jurisdiction to perfect the Security Interest
in the Collateral Granted under the Indenture.
(25) The
Mortgage Notes that constitute or evidence the Collateral do not have any marks
or notations indicating that they have been pledged, assigned, or otherwise
transferred to any person other than the Purchaser, the Trust, or the Indenture
Trustee. All financing statements filed or to be filed against each Seller
in
favor of the Purchaser, the Trust, or the Indenture Trustee in connection with
this Agreement, the Sale and Servicing Agreement, or the Indenture describing
the Collateral contain a statement to the following effect: “A purchase of the
Mortgage Loans included in the collateral covered by this financing statement
will violate the rights of the Purchaser, the Trust, or the Indenture
Trustee.”
14
(26) As
of the
Closing Date, CHL and Park Monaco will have received a written acknowledgement
from the Custodian that is acting solely as agent of the Indenture
Trustee.
(27) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
each
Credit Line Agreement and each Mortgage Loan is an enforceable obligation of
the
related mortgagor.
(28) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
neither Seller has received a notice of default of any senior mortgage loan
related to a Mortgaged Property that has not been cured by a party other than
the Master Servicer.
(29) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
definition of “prime rate” in each Credit Line Agreement relating to a Mortgage
Loan does not differ materially from “the highest ‘prime rate’ as published in
the ‘Money Rates’ table of The Wall Street Journal as of the first
business day of the calendar month for the applicable interest rate adjustment
date.”
(30) The
weighted average remaining term to maturity of the Initial Mortgage Loans on
a
contractual basis as of the Cut-off Date is approximately the number of months
specified in the Adoption Annex. On each date that the Loan Rates have been
adjusted, interest rate adjustments on the Initial Mortgage Loans were made
in
compliance with the related mortgage and Mortgage Note and applicable law.
Over
the term of each Mortgage Loan, the Loan Rate may not exceed the related Loan
Rate Cap. The Loan Rate Cap for the Initial Mortgage Loans ranges between the
percentages specified in the Adoption Annex and the weighted average Loan Rate
Cap is approximately the percentage specified in the Adoption Annex. The Gross
Margins for the Initial Mortgage Loans range between the percentages specified
in the Adoption Annex and the weighted average Gross Margin is approximately
the
percentage specified in the Adoption Annex as of the Cut-off Date for the
Initial Mortgage Loans. The Loan Rates on the Initial Mortgage Loans range
between the percentages specified in the Adoption Annex and the weighted average
Loan Rate on the Initial Mortgage Loans is approximately the percentage
specified in the Adoption Annex.
15
(31) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
each
Mortgaged Property consists of a single parcel of real property with a
one-to-four unit single family residence erected on it, or an individual
condominium unit, planned unit development unit, or townhouse.
(32) No
more
than the percentage specified in the Adoption Annex (by Cut-off Date Loan
Balance) of the Initial Mortgage Loans are secured by real property improved
by
individual condominium units, units in planned unit developments, or two-to-four
family residences erected on them, and at least the percentage specified in
the
Adoption Annex (by Cut-off Date Loan Balance) of the Mortgage Loans are secured
by real property with a detached one-family residence erected on
them.
(33) The
Credit Limits on the Initial Mortgage Loans range between approximately the
dollar amounts specified in the Adoption Annex with an average of approximately
the dollar amount specified in the Adoption Annex. As of the Cut-off Date for
the Initial Mortgage Loans, no Mortgage Loan had a principal balance in excess
of approximately the dollar amount specified in the Adoption Annex and the
average principal balance of the Initial Mortgage Loans is equal to
approximately the dollar amounts specified in the Adoption Annex.
(34) Approximately
the percentages specified in the Adoption Annex of the Initial Mortgage Loans,
by aggregate principal balance as of the Cut-off Date, are secured by first
and
second liens.
(35) As
of the
Closing Date, no more than the percentage specified in the Adoption Annex of
the
Initial Mortgage Loans, by aggregate principal balance, were appraised
electronically.
(36) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
no
default exists under any applicable Mortgage Note or applicable Mortgage Loan
and no event that, with the passage of time or with notice and the expiration
of
any grace or cure period, would constitute a default under any applicable
Mortgage Note or applicable Mortgage Loan has occurred and been waived. As
of
the Closing Date with respect to the Initial Mortgage Loans, the relevant
Subsequent Closing Date with respect to any Additional Home Equity Loans, or
the
applicable date of substitution with respect to any Eligible Substitute Mortgage
Loan, no modifications to the applicable Mortgage Notes and applicable Mortgage
Loans have been made and not disclosed.
16
(37) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
each
Mortgage Loan was originated in accordance with the Sponsor’s underwriting
guidelines and the Sponsor had no knowledge of any fact that would have caused
a
reasonable originator of mortgage loans to conclude on the date of origination
of each Mortgage Loan that each such Mortgage Loan would not be paid in full
when due.
(38) To
the
best knowledge of CHL at the time of origination of each Mortgage Loan, no
improvement located on or being part of the Mortgaged Property was in violation
of any applicable zoning and subdivision laws or ordinances.
(39) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
any
leasehold estate securing a Mortgage Loan has a term of not less than five
years
in excess of the term of the related Mortgage Loan.
(40) Based
on
the drawn balances of the Initial Mortgage Loans, the Initial Mortgage Loans
had
the characteristics set out in the Adoption Annex in respect of the following:
weighted average Combined Loan-to-Value Ratio; range of Combined Loan-to-Value
Ratios; percentage of primary residences; weighted average FICO score; range
of
FICO scores; Weighted Average Net Loan Rate; range of net Loan Rates; weighted
average original stated term to maturity; range of original term to maturity;
range of remaining term to maturity; average drawn balance; weighted average
utilization ratio; and percentage of the Initial Mortgage Loans that have their
respective Mortgaged Properties located in the top five states, measured by
aggregate drawn balances.
(41) Any
Initial Mortgage Loan that has been modified in any manner has been so modified
in accordance with the policies and procedures of the Master Servicer and in
a
manner that was permitted by the Sale and Servicing Agreement, the Indenture,
and any other Transaction Document.
(42) Each
Initial Mortgage Loan was originated (within the meaning of Section 3(a)(41)
of
the Securities Exchange Act of 1934) by an entity that satisfied at the time
of
origination the requirements of Section 3(a)(41) of the Securities Exchange
Act
of 1934.
17
(43) At
the
time each Initial Mortgage Loan was originated, each Seller was, and each Seller
is an approved seller of conventional mortgage loans for Xxxxxx Xxx and Xxxxxxx
Mac and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing
Act.
(44) A
lender’s policy of title insurance together with a condominium endorsement and
extended coverage endorsement, if applicable, in an amount at least equal to
the
principal balance of the related Mortgage Loan as of the Cut-off Date or the
relevant Subsequent Cut-off Date, as applicable, or a commitment (binder) to
issue the same was effective on the date of the origination of each Mortgage
Loan, each such policy is valid and remains in full force, and each such policy
was issued by a title insurer qualified to do business in the jurisdiction
where
the Mortgaged Property is located and acceptable to Xxxxxx Mae and Xxxxxxx
Mac
and is in a form acceptable to Xxxxxx Mae and Xxxxxxx Mac, which policy insures
the Sponsor and successor owners of indebtedness secured by the insured
Mortgage, as to the first priority lien, of the Mortgage subject to the
exceptions in paragraph (7) above.
(45) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
the
improvements on each Mortgaged Property are covered by a valid and existing
hazard insurance policy with a generally acceptable carrier that provides for
fire and extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing the Mortgage Loan or (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds of the
policy will be sufficient to prevent the Mortgagor or the mortgagee
from becoming a co-insurer. If the Mortgaged Property is a condominium unit,
it
is included under the coverage afforded by a blanket policy for the condominium
unit. All such individual insurance policies and all flood policies referred
to
in item (46) below contain a standard mortgagee clause naming the Sponsor or
the
original mortgagee, and its successors in interest, as mortgagee, and the
Sponsor has received no notice that any premiums due and payable thereon have
not been paid, and the Mortgage obligates the Mortgagor thereunder to maintain
all such insurance, including flood insurance, at the Mortgagor’s expense, and
upon the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor’s expense and to seek
reimbursement therefor from the Mortgagor.
18
(46) If
the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a flood
insurance policy in a form meeting the requirements of the current guidelines
of
the Flood Insurance Administration is in effect with respect to the Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the outstanding principal balance of the Mortgage
Loan and any mortgage loan senior to that Mortgage Loan, (B) the minimum amount
required to compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the National Flood
Insurance Act of 1968.
(47) Each
Mortgage Note and the related Mortgage are genuine, and each is the valid and
legally binding obligation of its maker, enforceable in accordance with its
terms and under applicable law, except that (a) its enforceability may be
limited by bankruptcy, insolvency, moratorium, receivership, and other similar
laws relating to creditors’ rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. To the best of CHL’s knowledge, all parties
to the Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly and
properly executed by such parties.
(48) No
Mortgage Loan has a shared appreciation feature, or other contingent interest
feature.
(49) To
the
best of CHL’s knowledge, all of the improvements that were included for the
purpose of determining the appraised value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of the Mortgaged Property,
and no improvements on adjoining properties encroach on the Mortgaged
Property.
(50) To
the
best of CHL’s knowledge, all inspections, licenses, and certificates required to
be made or issued with respect to all occupied portions of the Mortgaged
Property and, with respect to the use and occupancy of the same, including
certificates of occupancy and fire underwriting certificates, have been made
or
obtained from the appropriate authorities, unless their lack would not have
a
material adverse effect on the value of the Mortgaged Property, and the
Mortgaged Property is lawfully occupied under applicable law.
(51) Each
Mortgage contains customary and enforceable provisions that render the rights
and remedies of its holder adequate for the realization against the Mortgaged
Property of the benefits of the security intended to be provided by it,
including, (i) in the case of a Mortgage designated as a deed of trust, by
trustee’s sale, and (ii) otherwise by judicial foreclosure.
19
(52) Before
the approval of the Mortgage Loan application, an appraisal of the related
Mortgaged Property was obtained from a qualified appraiser, duly appointed
by
the Sponsor, who had no interest, direct or indirect, in the Mortgaged Property
or in any loan secured by the Mortgaged Property, and whose compensation is
not
affected by the approval or disapproval of the Mortgage Loan.
(53) Except
for (A) payments in the nature of escrow payments, and (B) interest accruing
from the date of the Mortgage Note or date of disbursement of the Mortgage
proceeds, whichever is later, to the day that precedes by one month the Due
Period of the first installment of principal and interest and taxes and
insurance payments, the Sponsor has not advanced funds, or induced, solicited,
or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the
Mortgage.
(54) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
no
foreclosure proceedings are pending against any Mortgaged Property and no
Mortgage Loan is subject to any pending bankruptcy or insolvency
proceeding.
(55) As
of the
Closing Date with respect to the Initial Mortgage Loans, the relevant Subsequent
Closing Date with respect to any Additional Home Equity Loans, or the applicable
date of substitution with respect to any Eligible Substitute Mortgage Loan,
there is no homestead exemption available and enforceable that materially
interferes with the right to sell any Mortgaged Property at a trustee’s sale or
the right to foreclose the related Mortgage.
(56) No
borrower was required to purchase any single premium credit insurance policy
(e.g., life, disability, accident, unemployment, or health insurance product)
or
debt cancellation agreement as a condition of obtaining the extension of credit.
No borrower obtained a prepaid single-premium credit insurance policy (e.g.,
life, 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 debt cancellation agreements as part of
the
origination of, or as a condition to closing, the Mortgage Loan.
(57) The
Initial Mortgage Loans, individually and in the aggregate, conform in all
material respects to their descriptions in the Prospectus
Supplement.
20
(58) Each
Mortgage Loan represents a “qualified mortgage” within the meaning of Section
860(a)(3) of the Code (but without regard to the rule in Treasury Regulation
§
1.860G-2(f)(2) that treats a defective obligation as a qualified mortgage,
or
any substantially similar successor provision).
(b) [RESERVED]
(c) If
the
substance of any representation or warranty under the Sale and Servicing
Agreement or in this Section made to the best of CHL’s knowledge or as to which
a Seller has no knowledge is inaccurate and the inaccuracy materially and
adversely affects the interest of the Purchaser or its assignee in the related
Mortgage Loan, then, notwithstanding that the Seller did not know the substance
of the representation and warranty was inaccurate at the time the representation
or warranty was made, the inaccuracy shall be a breach of the applicable
representation or warranty and CHL shall cure the breach, repurchase the
Mortgage Loan, or substitute for the Mortgage Loan in accordance with the Sale
and Servicing Agreement.
(d) The
representations and warranties in this Section shall survive the transfer and
assignment of the Mortgage Loans to the Purchaser. The sole remedy of the
Purchaser, the Noteholders, the Indenture Trustee on behalf of Noteholders,
and
the Credit Enhancer against a Seller for the breach of a representation or
warranty is CHL’s obligation to accept a transfer of a Mortgage Loan as to which
a breach has occurred and is continuing and to make any required deposit in
the
Collection Account or to substitute an Eligible Substitute Mortgage
Loan.
(e) The
Purchaser acknowledges that CHL, as Master Servicer, in its sole discretion,
may
purchase for its own account from the Trust any Mortgage Loan that is 151 days
or more delinquent. The price for any Mortgage Loan purchased shall be
calculated in the same manner as in Section 3.06 of the Sale and Servicing
Agreement and shall be deposited in the Collection Account. When it receives
a
certificate from the Master Servicer in the form of Exhibit B to the Sale and
Servicing Agreement, the Trust shall release to the purchaser of the Mortgage
Loan the related Mortgage File and shall execute and deliver any instruments
of
transfer prepared by the purchaser of the Mortgage Loan, without recourse,
necessary to vest in the purchaser of the Mortgage Loan any Mortgage Loan
released pursuant to this Agreement, and the purchaser of the Mortgage Loan
shall succeed to all the Trust’s interest in the Mortgage Loan and all security
and documents. This assignment shall be an assignment outright and not for
security. The purchaser of the Mortgage Loan shall then own the Mortgage Loan,
and all security and documents, free of any further obligation to the Trust,
the
Owner Trustee, the Indenture Trustee, the Transferor, the Credit Enhancer,
or
the Noteholders with respect to it.
21
ARTICLE
IV
Section
4.01. Covenants
of the Sellers.
Except
for the transfer under this Agreement, none of the Sellers will transfer to
any
other person, or create or suffer to exist any Lien on any Mortgage Loan, or
any
interest in one; each Seller will notify the Indenture Trustee of the existence
of any Lien on any Mortgage Loan immediately on its discovery; and CHL will
defend the right, title, and interest of the Trust and the Indenture Trustee
in
the Mortgage Loans against all claims of third parties claiming through a
Seller. Nothing in this Section shall prohibit a Seller from suffering to exist
on any of the Mortgage Loans any Liens for municipal or other local taxes and
other governmental charges if they are not due at the time or if the applicable
Seller is contesting their validity in good faith by appropriate proceedings
and
set aside on its books adequate reserves with respect to them.
ARTICLE
V
SERVICING
Section
5.01. Servicing.
CHL
will
be the Master Servicer of the Mortgage Loans pursuant to the Sale and Servicing
Agreement.
ARTICLE
VI
Section
6.01. Termination.
The
respective obligations of each of the Sellers and the Purchaser created by
this
Agreement shall terminate when the Indenture terminates in accordance with
its
terms.
ARTICLE
VII
Section
7.01. Amendment.
This
Agreement may be amended from time to time by CHL, Park Monaco, and the
Purchaser, with the written consent of the Credit Enhancer, by written agreement
signed by CHL, Park Monaco, and the Purchaser.
22
Section
7.02. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PROVISIONS THAT WOULD RESULT IN
THE
APPLICATION OF THE LAWS OF ANOTHER STATE.
Section
7.03. Notices.
All
notices, demands, instructions, consents, and other communications required
or
permitted under this Agreement shall be in writing and signed by the party
giving the same and shall be personally delivered or sent by first class or
express mail (postage prepaid), national overnight courier service, or by
facsimile transmission or other electronic communication device capable of
transmitting or creating a written record (confirmed by first class mail) and
shall be considered to be given for purposes of this Agreement on the day that
the writing is delivered when personally delivered or sent by facsimile or
overnight courier or three Business Days after it was sent to its intended
recipient if sent by first class mail. A facsimile has been delivered when
the
sending machine issues an electronic confirmation of transmission. Unless
otherwise specified in a notice sent or delivered in accordance with the
provisions of this Section, notices, demands, instructions, consents, and other
communications in writing shall be given to or made on the respective parties
at
their respective addresses indicated in the Adoption Annex attached to the
Indenture.
Section
7.04. Severability
of Provisions.
Any
provisions of this Agreement that are held invalid for any reason or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of the invalidity or unenforceability without invalidating the
remaining provisions of this Agreement, and the prohibition or unenforceability
in a jurisdiction shall not invalidate or render unenforceable that provision
in
any other jurisdiction.
Section
7.05. Counterparts;
Electronic Delivery.
This
Agreement may be executed in any number of copies, and by the different parties
on the same or separate counterparts, each of which shall be considered to
be an
original instrument. Any signature page to this Agreement containing a manual
signature may be delivered by facsimile transmission or other electronic
communication device capable of transmitting or creating a printable written
record, and when so delivered shall have the effect of delivery of an original
manually signed signature page.
Section
7.06. Further
Agreements.
The
Purchaser and each Seller agree to execute and deliver to the other any
additional documents appropriate to effectuate the purposes of this Agreement
or
in connection with the issuance of the Notes.
23
Section
7.07. Successors
and Assigns: Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by each
Seller, the Purchaser, the Trust, the Indenture Trustee, and the Credit
Enhancer. The obligations of each Seller under this Agreement cannot be assigned
or delegated to a third party without the consent of the Purchaser and the
Credit Enhancer, except that any Seller may assign its obligations under this
Agreement to any person into which that Seller is merged or any corporation
resulting from any merger, conversion, or consolidation to which that Seller
is
a party or any person succeeding to the business of that Seller. The Purchaser
is acquiring the Mortgage Loans to further transfer them to the Trust, and
the
Trust will Grant a Security Interest in them to the Indenture Trustee under
the
Indenture pursuant to which the Trust will issue a series of Notes secured
by
the Mortgage Loans. As an inducement to the Purchaser to purchase the Mortgage
Loans, each Seller consents to the assignment by the Purchaser to the Trust,
and
by the Trust to the Indenture Trustee of all of the Purchaser’s rights against
it under this Agreement insofar as they relate to the Mortgage Loans transferred
to the Trust applicable to that Seller and to the enforcement or exercise of
any
right against that Seller pursuant to this Agreement by the Indenture Trustee
under the Sale and Servicing Agreement and the Indenture. Enforcement of a
right
by the Indenture Trustee shall have the same effect as if the right had been
exercised by the Purchaser directly.
Section
7.08. Survival.
The
representations and warranties in Article III shall survive the purchase of
the
Mortgage Loans.
24
CWHEQ,
Inc.
|
|||
as Purchaser | |||
|
By:
|
/s/ Xxxxxx Xxxxx | |
Name: Xxxxxx Xxxxx | |||
Title: Executive Vice President | |||
Countrywide
Home Loans, Inc.
|
|||
as a Seller | |||
|
By:
|
/s/ Xxxxxx Xxxxx | |
Name: Xxxxxx Xxxxx | |||
Title: Executive Vice President | |||
Park
Monaco Inc.
|
|||
as a Seller | |||
|
By:
|
/s/ Xxxxxx Xxxxx | |
Name: Xxxxxx Xxxxx | |||
Title: Executive Vice President | |||
25
STATE
OF CALIFORNIA
|
)
|
: ss.:
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
the
31st
day of May, 2007
before me, a Notary Public in and for said State, personally appeared Xxxxxx
Xxxxx, known to me to be an Executive Vice President of CWHEQ, Inc., the
corporation that executed the within instrument, and also known to me to be
the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
/s/
Xxxxxx
Xxxxxx
Notary
Public
Xxxxxx
X.
Xxxxxx
Commission
# 1609859
Notary
Public – California
Los
Angeles County
My
Comm.
Expires October 15, 2009.
26
STATE
OF CALIFORNIA
|
)
|
: ss.:
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
the
31st
day of May, 2007
before me, Xxxxxx Xxxxx of Countrywide Home Loans, Inc., personally appeared,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person, or the entity on behalf
of
which the person acted, executed the instrument.
/s/
Xxxxxx
Xxxxxx
Notary
Public
Xxxxxx
X.
Xxxxxx
Commission
# 1609859
Notary
Public – California
Los
Angeles County
My
Comm.
Expires October 15, 2009.
27
STATE
OF CALIFORNIA
|
)
|
: ss.:
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
the
31st
day of May, 2007
before me, Xxxxxx Xxxxx of PARK MONACO INC., personally appeared, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person whose name is subscribed to the within instrument and acknowledged to
me
that he executed the same in his authorized capacity, and that by his signature
on the instrument the person, or the entity on behalf of which the person acted,
executed the instrument.
/s/
Xxxxxx
Xxxxxx
Notary
Public
Xxxxxx
X.
Xxxxxx
Commission
# 1609859
Notary
Public – California
Los
Angeles County
My
Comm.
Expires October 15, 2009.
28
SCHEDULE
I
SCHEDULE
OF
MORTGAGE
LOANS
[Delivered
to the Indenture Trustee only]
Sch-I-1
SCHEDULE
II
STANDARD
& POOR’S GLOSSARY
Standard
& Poor's Predatory Lending Categorization
Standard
& Poor's has categorized loans governed by anti-predatory lending laws in
the jurisdictions listed below into three categories based on a combination
of
factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor's High Cost Loan category because they included thresholds
and tests that are typical of what is generally considered High Cost by the
industry.
Standard
& Poor’s High-Cost Loan Categorization
|
|
State/jurisdiction
|
Category
under applicable anti-predatory lending law
|
Arkansas
|
High
Cost Home Loan
|
Cleveland
Heights, Ohio
|
Covered
Loan
|
Colorado
|
Covered
Loan
|
Connecticut
|
High
Cost Home Loan
|
District
of Columbia
|
Covered
Loan
|
Florida
|
High
Cost Home Loan
|
Georgia
(Oct. 1, 2002 – March 6, 2003)
|
High
Cost Home Loan
|
Georgia
as amended (March 7, 2003 – current)
|
High
Cost Home Loan
|
HOEPA
Section 32
|
High
Cost Loan
|
Illinois
|
High
Risk Home Loan
|
Kansas
|
High
Loan-to-Value Consumer Loans and High APR Consumer
Loans
|
Kentucky
|
High
Cost Home Loan
|
Los
Angeles, Calif.
|
High
Cost Refinance Home Loan
|
Maine
|
High
Rate High Fee mortgage
|
Massachusetts
|
High
Cost Home Loan
|
Nevada
|
Home
Loan
|
New
Jersey
|
High
Cost Home Loan
|
High
Cost Home Loan
|
|
New
Mexico
|
High
Cost Home Loan
|
North
Carolina
|
High
Cost Home Loan
|
Oakland,
Calif.
|
High
Cost Home Loan
|
Ohio
|
Covered
Loan
|
Oklahoma
|
Subsection
10 Mortgage
|
South
Carolina
|
High
Cost Home Loan
|
West
Virginia
|
West
Virginia Mortgage Loan Act Loan
|
Standard
& Poor’s Covered Loan Categorization
|
|
State/jurisdiction
|
Category
under applicable anti-predatory lending law
|
Georgia
(Oct. 1, 2002 – March 6, 2003)
|
Covered
Loan
|
New
Jersey
|
Covered
Home Loan
|
Sch-II-1
Standard
& Poor’s Home Loan Categorization
|
|
State/jurisdiction
|
Category
under applicable anti-predatory lending law
|
Georgia
(Oct. 1, 2002- March 6, 2003)
|
Home
Loan
|
New
Jersey
|
Home
Loan
|
New
Mexico
|
Home
Loan
|
North
Carolina
|
Consumer
Home Loan
|
Oakland,
Calif.
|
Home
Loan
|
South
Carolina
|
Consumer
Home Loan
|
Sch-II-2
ANNEX
1
ADOPTION
ANNEX
The
purchase price for the Mortgage Loans pursuant to Section 2.03 is the transfer
to the Seller on the Closing Date of the Transferor Certificates and the
proceeds from the sale of the Notes.
The
items
referred to in the representations and warranties in Section 3.02(a)
are:
(12) 0.00%
of the Mortgage Loans being transferred on the relevant date (by Cut-off Date
Loan Balance) were 30-59 days delinquent as of the Cut-off Date.
(18) As
of the Cut-off Date no more than 0.28% of the Mortgage Loans, by aggregate
principal balance, are secured by Mortgaged Properties located in one United
States postal zip code.
(19) The
Combined Loan-to-Value Ratio for each Mortgage Loan was not in excess of
100.00%.
(30) The
weighted average remaining term to maturity of the Mortgage Loans on a
contractual basis as of the Cut-off Date is approximately 298 months. The Loan
Rate Caps for the Mortgage Loans range between -0.875% and 16.750%, and the
weighted average Loan Rate Cap is approximately 8.739%. The Gross Margins for
the Mortgage Loans range between -2.000% and 13.125%, and the weighted average
Gross Margin is approximately 1.811% as of the Cut-off Date for the Mortgage
Loans. The Loan Rates on the Mortgage Loans range between 3.990% and 21.000%,
and the weighted average Loan Rate on the Mortgage Loans is approximately
9.668%.
(32) No
more than 35.91% (by Cut-off Date Loan Balance) of the Mortgage Loans are
secured by real property improved by individual condominium units, units in
planned unit developments, townhouses, or two-to-four family residences erected
on them, and at least 64.09% (by Cut-off Date Loan Balance) of the Mortgage
Loans are secured by real property with a detached one-family residence erected
on them.
(33) The
Credit Limits on the Mortgage Loans range between approximately $7,500 and
$1,700,000, with an average of approximately $70,350,81 with respect to the
Mortgage Loans. As of the Cut-off Date, no Mortgage Loan had a principal balance
in excess of approximately $1,327,500 and the average principal balance of
the
Mortgage Loans is equal to approximately $58,223 with respect to the Mortgage
Loans.
(34) Approximately
1.50% and 98.50% of the Mortgage Loans, by aggregate principal balance as of
the
Cut-off Date for the Mortgage Loans, are secured by first and second liens,
respectively.
(35) As
of the Closing Date, no more than 13.16% of the Mortgage Loans, by aggregate
principal balance, were appraised electronically.
(40) As
of the Cut-off Date (based on the aggregate drawn balances), the Mortgage Loans
had a weighted average Combined Loan-to-Value Ratio of 87.11%; a range of
Combined Loan-to-Value Ratios between 5.79% and 100.00%; a percentage of primary
residences of 88.85%; a weighted average FICO score of 712; a range of FICO
scores between 540 and 832; a Weighted Average Net Loan Rate of 9.164%; a range
of net Loan Rates between 3.486% and 20.496%; a weighted average original stated
term to maturity of 299 months; a range of original term to maturity between
120
and 360 months; a range of remaining term to maturity between 117 and 358
months; an average drawn balance of $58,223; an average utilization ratio of
84.07%; and 64.66% of the Mortgage Loans have their respective Mortgaged
Properties located in the top five states, measured by aggregate drawn
balances.