Exhibit 99.5
Execution
FLOW SERVICING AGREEMENT
BETWEEN
TABERNA REALTY HOLDINGS TRUST
OWNER,
XXXXXX CAPITAL, A DIVISION OF XXXXXX BROTHERS HOLDINGS INC.
SERVICING RIGHTS OWNER
AND
AURORA LOAN SERVICES LLC
SERVICER
DATED AS OF SEPTEMBER 30, 2005
RESIDENTIAL MORTGAGE LOANS
GROUP NO. 2005-FLOW
TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS 1
ARTICLE II. OWNER'S ENGAGEMENT OF SERVICER TO PERFORM SERVICING
RESPONSIBILITIES 9
Section 2.01. Contract for Servicing; Possession of Servicing Files... 9
Section 2.02. Books and Records....................................... 9
Section 2.03. Custodial Agreement or Owner's Possession of the
Mortgage Loan Documents.............................. 10
Section 2.04. Original Documents...................................... 11
ARTICLE III. SERVICING OF THE MORTGAGE LOANS 11
Section 3.01. Servicer to Service..................................... 11
Section 3.02. Collection of Mortgage Loan Payments.................... 13
Section 3.03. Establishment of and Deposits to Custodial Account...... 14
Section 3.04. Permitted Withdrawals From Custodial Account............ 15
Section 3.05. Establishment of and Deposits to Escrow Account......... 16
Section 3.06. Permitted Withdrawals From Escrow Account............... 16
Section 3.07. Notification of Adjustments............................. 17
Section 3.08. Reserved................................................ 17
Section 3.09. Protection of Accounts.................................. 17
Section 3.10. Title, Management and Disposition of REO Property....... 18
Section 3.11. Real Estate Owned Reports............................... 19
Section 3.12. Credit Reporting........................................ 20
ARTICLE IV. PAYMENTS TO OWNER 20
Section 4.01. Remittances............................................. 20
Section 4.02. Statements to Owner..................................... 21
Section 4.03. Monthly Advances by Servicer............................ 22
ARTICLE V. GENERAL SERVICING PROCEDURES 22
Section 5.01. Servicing Compensation.................................. 22
Section 5.02. Annual Statement as to Compliance....................... 23
Section 5.03. Annual Independent Public Accountants' Servicing
Report............................................... 23
Section 5.04. Owner's Right to Examine Servicer Records............... 23
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ARTICLE VI. REPRESENTATIONS, WARRANTIES AND AGREEMENTS 24
Section 6.01. Representations, Warranties and Agreements of the
Servicer............................................. 24
Section 6.02. Remedies for Breach of Representations and Warranties of
the Servicer......................................... 25
Section 6.03. Representations and Warranties of the Owner............. 26
Section 6.04. Remedies for Breach of Representations and Warranties of
the Owner............................................ 27
ARTICLE VII. INDEMNIFICATION BY THE SERVICER 28
Section 7.01. Additional Indemnification by the Servicer; Third Party
Claims............................................... 28
ARTICLE VIII. THE SERVICER 29
Section 8.01. Merger or Consolidation of the Servicer................. 29
Section 8.02. Limitation on Liability of the Servicer and Others...... 29
Section 8.03. Limitation on Resignation and Assignment by the
Servicer............................................. 29
ARTICLE IX. TERMINATION 30
Section 9.01. Termination for Cause................................... 30
Section 9.02. Termination Without Cause............................... 32
ARTICLE X. MISCELLANEOUS PROVISIONS 32
Section 10.01. Successor to the Servicer............................... 32
Section 10.02. Closing................................................. 34
Section 10.03. Closing Documents....................................... 34
Section 10.04. Costs................................................... 35
Section 10.05. Notices................................................. 35
Section 10.06. Severability Clause..................................... 36
Section 10.07. No Personal Solicitation................................ 36
Section 10.08. Counterparts............................................ 37
Section 10.09. Place of Delivery and Governing Law..................... 37
Section 10.10. Further Agreements...................................... 37
Section 10.11. Successors and Assigns; Assignment of Flow Servicing
Agreement............................................ 37
Section 10.12. Waivers................................................. 38
Section 10.13. Exhibits................................................ 38
Section 10.14. General Interpretive Principles......................... 38
Section 10.15. Reproduction of Documents............................... 38
Section 10.16. Reconstitution.......................................... 39
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Section 10.17. Confidentiality......................................... 40
Section 10.18. Safeguarding Customer Information....................... 40
EXHIBITS
EXHIBIT A FORM OF ACKNOWLEDGMENT AGREEMENT
EXHIBIT B FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT C CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT D ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT E ANNUAL CERTIFICATION
EXHIBIT F MONTHLY REMITTANCE DATA FIELDS
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Exhibit 99.5
Execution
FLOW SERVICING AGREEMENT
This is a Flow Servicing Agreement (the "Agreement"), dated as of
September 30, 2005, by and between Taberna Realty Holdings Trust (the "Owner"),
Aurora Loan Services LLC (the "Servicer") and Xxxxxx Capital, A Division of
Xxxxxx Brothers Holdings Inc., having an office at 000 Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Servicing Rights Owner").
WITNESSETH
WHEREAS, from time to time the Owner shall acquire ownership to
certain fixed or adjustable rate first or second lien mortgage loans, excluding
any of the related Servicing Rights (the "Mortgage Loans") from the Servicing
Rights Owner; and
WHEREAS, the Servicing Rights Owner has previously contracted with the
Servicer for the servicing responsibilities associated with the Mortgage Loans
and the Servicer has assumed the servicing responsibilities to such Mortgage
Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and reasonable consideration, the receipt and
adequacy of which is hereby acknowledged, the Owner and Servicer hereby agree
the Servicer shall continue to service the Mortgage Loans as follows:
ARTICLE I.
DEFINITIONS
The following terms are defined as follows (except as otherwise agreed
in writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loans in the
jurisdiction where the related Mortgaged Property is located.
Acknowledgment Agreement: An Acknowledgment Agreement in the form of
Exhibit A hereto.
Act: The National Housing Act, as amended from time to time.
Agreement: This Flow Servicing Agreement and all amendments hereof and
supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, other
than Servicing Fees, including but not limited to, interest received on funds
deposited in the Custodial Account or the Escrow Account, late charges, fees
received with respect to checks or bank drafts returned by the related bank for
non-sufficient funds, assumption fees, optional insurance
administrative fees and all other incidental fees and charges (but excluding
prepayment charges, which shall be the property of the Servicing Rights Owner).
The Servicer shall retain all Ancillary Income.
Applicable Agency: With respect to the Mortgage Loans, Xxxxxx Xxx.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment Fee: $9.25 per Assignment of Mortgage plus all reasonable
out-of-pocket recording expenses incurred in connection with recording such
Assignments of Mortgage.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the transfer of the Mortgage to the party indicated therein, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law.
Best Efforts: Efforts determined to be reasonably diligent by the
Owner or Servicer, as the case may be, in its sole discretion. Such efforts do
not require the Owner or Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Owner or Servicer, as the case may be, to advance or expend fees or
sums of money in addition to those specifically set forth in this Agreement.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the States of
Nebraska, New York or Colorado are authorized or obligated by law or executive
order to be closed.
Closing Date: The date or dates set forth on the related
Acknowledgment Agreement.
Code: The Internal Revenue Code of 1986, as it may be amended from
time to time or any successor statute thereto, and applicable U.S. Department of
the Treasury regulations issued pursuant thereto.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan documents.
Costs: For any Person, any actual claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and other costs and expenses of such Person, excluding however, any
and all consequential and punitive damages.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 3.03.
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Custodial Agreement: The applicable custodial agreement relating to
custody of the Mortgage Loans, between the Custodian and the Owner, as specified
in the related Acknowledgment Agreement.
Custodian: The custodian under the related Custodial Agreement as
specified in the related Acknowledgment Agreement.
Customer Information: Shall have the meaning set forth in the
Interagency Guidelines Establishing Standards for Safeguarding Customer
Information published in final form on February 1, 2001, 66 Fed. Reg. 8616.
Determination Date: For each month that this Agreement is in effect,
the date which is two (2) Business Days prior to the Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on
a Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month following the actual Due Date.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of the Remittance
Date and ending on the first day of the month in which the Remittance Date
occurs.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than the Determination Date in each month:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America; and
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal and/or state banking authorities, so long as at the time of such
investment or contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution or
trust company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt obligations of such holding company)
are rated "P-1" by Xxxxx'x Investors Service, Inc. and the long-term debt
obligations of such holding company) are rated "P-1" by Xxxxx'x Investors
Service, Inc. and the long-term debt obligations of such depository institution
or trust company (or, in the case of a depository institution or trust company
which is the principal subsidiary of a holding company, the long-term debt
obligations of such holding company) are rated at least "Aa" by Xxxxx'x
Investors Service, Inc.;
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provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer pursuant to the Xxxxxx Mae Guides.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 3.05.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: Any event set forth in Section 9.01.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to the Xxxxxx Xxx Guides.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related REO Property, if the Mortgaged Property is acquired in satisfaction of
the Mortgage Loan.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation or any successor in interest thereto.
MERS Eligible Mortgage Loan: Any Mortgage Loan that has been
designated by the Servicer as recordable in the name of MERS.
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MERS Mortgage Loan: Any Mortgage Loan as to which the related
Mortgage, or an Assignment of Mortgage, has been or will be recorded in the name
of MERS, as agent for the holder from time to time of the Mortgage Note.
Monthly Advance: With respect to each Remittance Date and each
Mortgage Loan, an amount equal to the Monthly Payment (with the interest portion
of such Monthly Payment adjusted to the Mortgage Loan Remittance Rate) which was
due on the Mortgage Loan, and (i) which was delinquent at the close of business
on the immediately preceding Determination Date and (ii) which was not the
subject of a previous Monthly Advance.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, including all riders thereto, which creates a first or second
lien on an unsubordinated estate in fee simple in real property securing the
Mortgage Note.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in the Xxxxxx Mae Guides.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note, which for adjustable rate Mortgage Loans may be subject to
adjustment from time to time in accordance with the terms of the Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan subject to this Agreement being identified on
the Mortgage Loan Schedule, which Mortgage Loan includes without limitation the
Mortgage Loan documents, the Monthly Payments, Principal Prepayments,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition
Proceeds, and all other rights, benefits, proceeds and obligations arising from
or in connection with such Mortgage Loan.
Mortgage Loan Package: A pool of Mortgage Loans purchased by the Owner
and for which the Servicer shall begin to service on a Closing Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
Mortgage Interest Rate minus the applicable Servicing Fee.
Mortgage Loan Schedule: A schedule of the Mortgage Loans in a Mortgage
Loan Package setting forth information with respect to such Mortgage Loans
attached as Annex 1 to the related Acknowledgment Agreement, including, if
applicable, a prepayment charge indicator and related provisions.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage, including all riders thereto.
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Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Sale Proceeds: The proceeds from the sale of REO Property, net of
all expenses incurred by the Servicer in connection with such sale, including,
without limitation, legal fees and expenses, referral fees, brokerage
commissions, conveyance taxes and any other related expense.
Nonrecoverable Advance: Any Monthly Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan by the
Servicer which, in the reasonable discretion of the Servicer, will not or, in
the case of a proposed Servicing Advance, would not, ultimately be recoverable
by the Servicer from the related Mortgagor, related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds or otherwise. The determination by the
Servicer that all or a portion of a Servicing Advance or a Monthly Advance would
be a Nonrecoverable Advance shall be evidenced by a certification of a Servicing
Officer delivered to the Owner which details the reasons for such determination.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Servicer, reasonably acceptable to the Owner.
Owner: Taberna Realty Holdings Trust, or its successors in interest
and assigns.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by
a Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during the
Prepayment Period, which Principal Prepayment was applied to such Mortgage Loan
prior to such Mortgage Loan's Due Date in such Due Period, the amount of
interest (net of the related Servicing Fee) that would have accrued on the
amount of such Principal Prepayment during the period commencing on the date as
of which such Principal Prepayment was applied to such Mortgage Loan and ending
on the day immediately preceding the next scheduled Due Date, inclusive.
Prepayment Period: With respect to any Remittance Date and a Principal
Prepayment in full or in part, the calendar month immediately preceding the
month of such Remittance Date.
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 Northeast
Edition.
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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 charge 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.
Qualified Depository: Any of (i) a depository the accounts of which
are insured by the FDIC and the debt obligations of which are rated AA (or its
equivalent) or better by each Rating Agency; (ii) the corporate trust department
of any bank the debt obligations of which are rated at least A-1 or its
equivalent by each Rating Agency; or (iii) Xxxxxx Brothers Bank, FSB, a federal
savings bank.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Mae.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's or their
respective successors.
Reconstitution Agreement: As defined in Section 10.16.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
Remittance Date: The 18thday (or if such 18th day is not a Business
Day, the first Business Day immediately following) of any month.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 3.10.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Owner through foreclosure or by deed in lieu of foreclosure, pursuant to
Section 3.10.
Servicer: Aurora Loan Services LLC or its successor in interest or
assigns or any successor to the Servicer under this Agreement as herein
provided.
Servicing Advances: All customary, reasonable, necessary and
documented "out of pocket" costs and expenses (including reasonable attorneys'
fees and disbursements) incurred in the performance by the Servicer of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or administrative or judicial proceedings, including foreclosures,
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (d) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property, and PMI Policy premiums and fire and hazard insurance
coverage, (e) any losses sustained by the Servicer with respect to the
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liquidation of the Mortgaged Property and (f) compliance with the obligations
pursuant to the provisions of the Xxxxxx Mae Guides.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of one
full month, be equal to one-twelfth the product of (a) the Servicing Fee Rate
and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall
be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Owner 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, Condemnation
Proceeds and Insurance Proceeds, to the extent permitted by Section 3.05) of
such Monthly Payment collected by the Servicer.
Servicing Fee Rate: With respect to each Mortgage Loan, the amount set
forth in the related Acknowledgment Agreement.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Owner by the Servicer.
Servicing Officer: Any officer of the Servicer involved in or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Servicer to the
Owner upon request, as such list may from time to time be amended.
Servicing Rights: Any and all of the following: (a) any and all rights
to service the Mortgage Loans; (b) any payments to or monies received by the
Servicer for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Servicer
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Servicer with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans.
Servicing Rights Owner: Xxxxxx Capital, A Division of Xxxxxx Brothers
Holdings Inc.
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ARTICLE II.
OWNER'S ENGAGEMENT OF SERVICER TO
PERFORM SERVICING RESPONSIBILITIES
Section 2.01. Contract for Servicing; Possession of Servicing Files.
With respect to the Mortgage Loans in each Mortgage Loan Package, from
and after the related Closing Date, the Servicer, as an independent contractor,
shall service and administer the Mortgage Loans, by execution and delivery of
the related Acknowledgment Agreement, in the form attached hereto as Exhibit A,
and shall have full power and authority, acting alone, to do any and all things
in connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. Each Servicing File delivered to the Servicer
shall be held by the Servicer in order to service the Mortgage Loans pursuant to
this Agreement and are and shall be held in trust by the Servicer for the
benefit of the Owner as the owner thereof and the Servicing Rights Owner. The
Servicer's possession of any portion of the Mortgage Loan documents shall be at
the will of the Owner for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to this Agreement, and such retention and
possession by the Servicer shall be in a custodial capacity only. The ownership
of each Mortgage Note, Mortgage, and the contents of the Servicing File shall be
vested in the Owner and the ownership of all records and documents with respect
to the related Mortgage Loan prepared by or which come into the possession of
the Servicer shall immediately vest in the Owner and shall be retained and
maintained, in trust, by the Servicer at the will of the Owner in such custodial
capacity only. The portion of each Servicing File retained by the Servicer
pursuant to this Agreement shall be segregated from the other books and records
of the Servicer and shall be appropriately marked to clearly reflect the
ownership of the related Mortgage Loan by the Owner. The Servicer shall release
from its custody the contents of any Servicing File retained by it only in
accordance with this Agreement.
Section 2.02. Books and Records.
The Servicer shall perform any initial endorsements of the Mortgage
Notes and shall prepare or cause to be prepared and record or cause to be
recorded any initial Assignments of Mortgage (A) with respect to each MERS
Eligible Mortgage Loan, in the name of MERS (or such party shall ascertain that
such assignment has previously been so recorded) or (B) with respect to each
non-MERS Mortgage Loan, in the name as the Owner shall designate (other than the
Servicer), unless instructions to the contrary are delivered to the Servicer.
The Servicer shall pay all necessary fees associated with the preparation and
recording of the initial Assignments of Mortgage. With respect to any non-MERS
Mortgage Loan and subsequent endorsements of the Mortgage Notes and/or
subsequent Assignments of Mortgage, either (A) the Owner or the Owner's designee
or (B) the Servicer, for an Assignment Fee paid by the Owner, shall (1) prepare
or cause to be prepared all such subsequent Assignments of Mortgage and/or (2)
track such subsequent Assignments of Mortgage to ensure they have been recorded.
The Owner shall pay all necessary fees associated with the subsequent
endorsements of the Mortgage Notes and the preparation and recording of the
subsequent Assignments of Mortgage. Record title to each
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MERS Mortgage and the related Mortgage Note shall vest in MERS (solely as
nominee for the Owner and the Owner's successors and assigns) and the successors
and assigns of MERS. Notwithstanding the foregoing, the Servicer shall cooperate
with the Owner in the Owner's preparation and recording of any and all
Assignments of Mortgage. All funds received on or in connection with a Mortgage
Loan shall be received and held by the Servicer in trust for the benefit of the
Owner as the owner of the Mortgage Loans pursuant to the terms of this
Agreement.
Section 2.03. Custodial Agreement or Owner's Possession of the
Mortgage Loan Documents.
With respect to all Mortgage Loans subject to this Agreement, the
Owner shall have either taken possession of the Mortgage Loan documents for each
Mortgage Loan, or shall have delivered and released or caused to have been
delivered and released to the related Custodian on or prior to the date hereof
those Mortgage Loan documents required with respect to each Mortgage Loan. In
the event of any conflict, inconsistency or discrepancy between any of the
provisions of this Agreement and any of the provisions of the related Custodial
Agreement, the provisions of this Agreement shall control and be binding upon
the Owner and the Servicer.
Subsequent to the Closing Date with respect to each Mortgage Loan
Package, the Owner or the related Custodian, as the case may be, shall have
certified its receipt of all Mortgage Loan documents required to be delivered
pursuant to the related Custodial Agreement or the terms of this Agreement, as
the case may be, as evidenced by the trust receipt and initial certification of
the Owner or the related Custodian in the form annexed to the related Custodial
Agreement, or as may be prescribed by the Owner. The Owner shall be responsible
for maintaining the related Custodial Agreement, if any, and shall pay all other
fees and expenses of the related Custodian including but not limited to, (i) any
and all annual and warehousing fees, (ii) any and all termination fees in the
event the related Custodian is terminated by the Owner, except that the Servicer
shall pay such termination fees in the event the related Custodian is terminated
pursuant to the Servicer's request, if applicable, and (iii) any and all fees
due in connection with the deposit or retrieval of a Mortgage Loan document or
documents (collectively, the "Custodial Fees").
The Servicer shall forward to the Owner or the Custodian, as the case
may be, original documents evidencing an assumption, modification, consolidation
or extension of any Mortgage Loan entered into in accordance with this Agreement
within two (2) weeks of their execution, provided, however, that the Servicer
shall provide the Owner or the Custodian, as the case may be, with a certified
true copy of any such document submitted for recordation within two (2) weeks 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 three
hundred sixty (360) days of its submission for recordation. If such copy has not
been returned by the applicable recording office within three hundred sixty
(360) days of its submission, the Servicer shall notify the Owner or the
Custodian, as the case may be, of such delinquency, demonstrating that the
Servicer has used its Best Efforts to obtain such copy (the "Delinquent
Document"). Upon adequate demonstration of a Best Efforts attempt by the
Servicer to obtain the Delinquent Document, the Owner shall, in its
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sole discretion, extend the time period for the receipt of the Delinquent
Document for a reasonable time period by which it is reasonably expected that
the Delinquent Document will be received.
The Custodian's or the Owner's address, as the case may be, for
purposes of delivering Mortgage Loan Document release forms shall be set forth
in the related Acknowledgment Agreement.
Section 2.04. Original Documents.
Upon the request of the Servicer, the Custodian or the Owner, as the
case may be, shall release to the Servicer any original mortgage loan documents
necessary for the Servicer to carry out its obligations hereunder not later than
2 Business Days of receipt of such request. Such request shall be sent to the
Owner at the address set forth in Section 10.05 and to the Custodian at: Xxxxx
Fargo Bank Minnesota, N.A., 000 Xxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, Attention:
Xxxxx Xxxxxxxx (or such other address as may be provided by the Owner or the
Custodian to the Servicer from time to time). Servicer shall have no liability
for any losses, expenses or costs resulting from the inability of the Custodian
or the Owner, as the case may be, to deliver requested documents to the Owner on
or prior to the date which is 2 Business Days from receipt of the related
request.
ARTICLE III.
SERVICING OF THE MORTGAGE LOANS
Section 3.01. Servicer to Service.
The Servicer, as an independent contractor, shall service and
administer the Mortgage Loans from and after the related Closing Date and shall
have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices. The Servicer shall service the Mortgage Loans in
strict compliance with the servicing provisions related to the Xxxxxx Xxx, MBS
Program (Special Servicing Option) of the Xxxxxx Mae Guides, which include, but
are not limited to, provisions regarding the liquidation of Mortgage Loans, the
collection of Mortgage Loan payments, the payment of taxes, insurance and other
charges, the maintenance of hazard insurance, the maintenance of mortgage
impairment insurance, the maintenance of a Fidelity Bond and Errors and
Omissions Insurance, inspections, the restoration of Mortgaged Property, the
maintenance of PMI Policies, insurance claims, the title, management and
disposition of REO Property, permitted withdrawals with respect to REO Property,
REO reports, liquidation reports, and reports of foreclosures and abandonments
of Mortgaged Property, the transfer of Mortgaged Property, the release of
Mortgage Loan documents, annual statements, and examination of records and
facilities. In the event of any conflict, inconsistency or discrepancy between
any of the servicing provisions of this Agreement and any of the servicing
provisions of the Xxxxxx Xxx Guides, the provisions of this Agreement shall
control and be binding upon the Owner and the Servicer.
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It is understood and agreed that the Owner shall approve all
foreclosures and chargeoffs in respect of a Mortgage Loan prior to the
commencement of any foreclosure proceedings by the Servicer and that the Owner
must approve any and all advances with respect to foreclosures made by the
Servicer if such approval would be required by Xxxxxx Mae and any such advance
is in excess of 20% of the outstanding principal balance of the applicable
Mortgage Loan. In the event that Owner does not disapprove of any such advance
or foreclosure within three (3) days of receipt of notice of such advance or
foreclosure, then the Owner is deemed to have approved such advance or
foreclosure.
The Servicer may also, in its sole discretion, as an alternative to
foreclosure, sell defaulted Mortgage Loans at fair market value to
third-parties, if the Servicer reasonably believes that such sale would maximize
proceeds to the Owner in the aggregate (on a present value basis) with respect
to that Mortgage Loan.
The Owner's address for purposes of all foreclosure and chargeoff
consent requests is:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
E-mail address: xxxxxxx@xxxxxxxxxxxxxx.xxx
with a copy to:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
E-mail address: xxxxxx@xxxxxxxxxxxxxx.xxx
Notwithstanding the foregoing paragraph, the Owner and the Servicer
hereby agree as follows:
(a) The Servicer shall, in accordance with the relevant provisions of
the Xxxxxxxx-Xxxxxxxx National Affordable Housing Act of 1990, as the same may
be amended from time to time, and the regulations provided in accordance with
the Real Estate Settlement Procedures Act, provide notice to the Mortgagor of
each Mortgage of the transfer of the servicing thereto to the Servicer.
(b) The Servicer shall retain all Ancillary Income.
(c) The Servicer shall have no obligations to make any Monthly Advance
or Servicing Advance which it deems a Nonrecoverable Advance.
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Consistent with the terms of this Agreement, the Servicer may (i)
waive, modify or vary any term of any Mortgage Loan or (ii) consent to the
postponement of strict compliance with any such term or (iii) in any manner
grant indulgence to any Mortgagor, if such modification would not require the
notification to and/or consent by the Applicable Agency without the prior
consent of the Owner. Where such notification to and/or consent by the
Applicable Agency is required for any such modification, the Servicer must first
obtain the prior written consent of the Owner before making such modification.
In the event that the Owner does not disapprove of any such modification within
two (2) Business Days of receipt of a request for consent to such modification,
then the Owner is deemed to have consented to such modification.
Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the Owner, 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 Servicer, within five (5) Business Days following
the Servicer's request, the Owner shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Servicer shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, the Xxxxxx Xxx Guides, and the Owner's reliance on the
Servicer.
In the event that the Mortgage Loan documents relating to a Mortgage
Loan contain provisions requiring the related Mortgagor to arbitrate disputes
(at the Owner's option), the Owner hereby authorizes the Servicer to waive the
Owner's right or option to arbitrate disputes and to send written notice of such
waiver to the Mortgagor, although the Mortgagor may still require arbitration at
its option.
Section 3.02. Collection of Mortgage Loan Payments.
Continuously from and after the related Closing Date, the Servicer
shall proceed diligently to collect all payments due under each of the Mortgage
Loans when the same shall become due and payable and shall take special care in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loans and each related
Mortgaged Property, to the end that the installments payable by the Mortgagors
will be sufficient to pay such charges as and when they become due and payable.
Notwithstanding anything herein to the contrary, the Servicer shall have no
obligation to collect, or make payments to the Owner with respect to, any
prepayment charges, late fees, fees or other items which are prohibited under
any applicable law, rule, regulation or order of any governmental authority.
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Section 3.03. Establishment of and Deposits to Custodial Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled as directed by the Owner.
The Custodial Account shall be established with a Qualified Depository. Any
funds deposited in the Custodial Account may be invested in Eligible Investments
subject to the provisions of Section 3.09 hereof. Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
3.04. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form of Exhibit C. A copy of such certification or letter
agreement shall be furnished to the Owner and, upon request, to any subsequent
owner of the Mortgage Loans.
The Servicer shall deposit in the Custodial Account on a daily basis,
within two (2) Business Days of receipt, and retain therein, the following
collections received by the Servicer and payments made by the Servicer after the
date hereof:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments and prepayment charges;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds;
(v) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor;
(vi) with respect to each Principal Prepayment in full the
Prepayment Interest Shortfall Amount, if any, for the month of distribution.
Such deposit shall be made from the Servicer's own funds, without reimbursement
therefor up to a maximum amount per month of the Servicing Fee actually received
for such month for the Mortgage Loans;
(vii) any amounts required to be deposited by the Servicer in
connection with the deductible clause in any blanket hazard insurance policy;
(viii) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds; and
(ix) any other amount required to be deposited in the Custodial
Account hereunder.
Any interest paid on funds deposited in the Custodial Account by the
depository institution shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally,
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any other benefit derived from the Custodial Account associated with the
receipt, disbursement and accumulation of principal, interest, taxes, hazard
insurance, mortgage insurance, etc. shall accrue to the Servicer.
Section 3.04. Permitted Withdrawals From Custodial Account.
The Servicer shall, from time to time, withdraw funds from the
Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the
manner provided for in Section 4.01;
(ii) in the event the Servicer has elected not to retain the
Servicing Fee out of any Mortgagor payments on account of interest or other
recovery of interest with respect to a particular Mortgage Loan (including late
collections of interest on such Mortgage Loan, or interest portions of Insurance
Proceeds or Liquidation Proceeds) prior to the deposit of such Mortgagor payment
or recovery in the Custodial Account, to pay to itself the related Servicing Fee
from all such Mortgagor payments on account of interest or other such recovery
for interest with respect to that Mortgage Loan;
(iii) to reimburse itself for Monthly Advances of the funds made
pursuant to Section 4.03, the Servicer's right to reimburse itself pursuant to
this subclause (iii) with respect to any Monthly Advance (other than
Nonrecoverable Advances) 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 Servicer's right thereto shall be prior to
the rights of Owner;
(iv) to reimburse itself for unreimbursed Servicing Advances, the
Servicer's right to reimburse itself pursuant to this subclause (iv) with
respect to any Servicing Advance (other than Nonrecoverable Advances) being
limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to the Mortgage Loan ;
(v) to reimburse itself for Nonrecoverable Advances, it being
understood that, in the case of any such reimbursements, the Servicer's right
thereto shall be prior to the rights of the Owner;
(vi) to pay itself interest accrued and payable on funds
deposited in the Custodial Account;
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement;
(viii) to transfer funds to another Qualified Depository in
accordance with Section 3.09 hereof;
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(ix) to invest funds in certain Eligible Investments in
accordance with Section 3.09 hereof;
(x) to reimburse itself for expenses incurred by or reimbursable
to the Servicer to the extent not previously reimbursed under clauses (iii) and
(iv) of this Section 3.04;
(xi) to remit any prepayment charges to the Servicing Rights
Owner; and
(xii) to withdraw funds deposited in error.
Section 3.05. Establishment of and Deposits to Escrow Account.
The Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled as
directed by the Owner. The Escrow Accounts shall be established with a Qualified
Depository in a manner that shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Account may be drawn on by the
Servicer in accordance with Section 3.06. The creation of any Escrow Account
shall be evidenced by a letter agreement in the form of Exhibit D. A copy of
such certification or letter agreement shall be furnished to the Owner and, upon
request, to any subsequent owner of the Mortgage Loans.
The Servicer shall deposit in the Escrow Account or Accounts on a
daily basis, within two (2) Business Days of receipt, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06. The Servicer shall retain any interest paid on funds deposited in
the Escrow Account by the depository institution, other than interest on
escrowed funds required by law to be paid to the Mortgagor. Additionally, any
other benefit derived from the Escrow Account associated with the receipt,
disbursement and accumulation of principal, interest, taxes, hazard insurance,
mortgage insurance, etc. shall accrue to the Servicer. To the extent required by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.
Section 3.06. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Servicer only:
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(i) to effect timely payments of ground rents, taxes,
assessments, water rates, sewer rents, mortgage insurance premiums, condominium
charges, fire and hazard insurance premiums or other items constituting Escrow
Payments for the related Mortgage;
(ii) to refund to any Mortgagor any funds found to be in excess
of the amounts required under the terms of the related Mortgage Loan;
(iii) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the terms
of the related Mortgage and Mortgage Note;
(iv) for application to restoration or repair of the Mortgaged
Property in accordance with the Xxxxxx Mae Guides;
(v) to pay to the Servicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow Account;
(vi) to clear and terminate the Escrow Account on the termination
of this Agreement; and
(vii) to withdraw funds deposited in error.
Section 3.07. Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Servicer shall
adjust the Mortgage Interest Rate on the related interest rate adjustment date
and shall adjust the Monthly Payment on the related mortgage payment adjustment
date, if applicable, in compliance with the requirements of applicable law and
the related Mortgage and Mortgage Note. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
Monthly Payment adjustments. The Servicer shall promptly, upon written request
therefor, deliver to the Owner such notifications and any additional applicable
data regarding such adjustments and the methods used to calculate and implement
such adjustments. Upon the discovery by the Servicer or the receipt of notice
from the Owner that the Servicer has failed to adjust a Mortgage Interest Rate
or Monthly Payment in accordance with the terms of the related Mortgage Note,
the Servicer shall immediately deposit in the Custodial Account from its own
funds the amount of any interest loss or deferral caused the Owner thereby.
Section 3.08. Reserved.
Section 3.09. Protection of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time after providing notice
thereof to the Owner. The Servicer may transfer the Custodial Account or the
Escrow Account to a depository which is not a Qualified Depository only upon
obtaining the consent of the Owner, which consent shall not be withheld
unreasonably.
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The Servicer shall bear any expenses, losses or damages sustained by
the Owner if the Custodial Account and/or the Escrow Account are not demand
deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account may
at the option of the Servicer be invested in Eligible Investments. Any such
Eligible Investment shall mature no later than the Determination Date next
following the date of such Eligible Investment, provided, however, that if such
Eligible Investment is an obligation of a Qualified Depository (other than the
Servicer) that maintains the Custodial Account or the Escrow Account, then such
Eligible Investment may mature on such Remittance Date. Any such Eligible
Investment shall be made in the name of the Servicer in trust for the benefit of
the Owner. All income on or gain realized from any such Eligible Investment
shall be for the benefit of the Servicer and may be withdrawn at any time by the
Servicer. Any losses incurred in respect of any such investment shall be
deposited in the Custodial Account or the Escrow Account, by the Servicer out of
its own funds immediately as realized.
Section 3.10. 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 Owner or MERS, as applicable, or in the event
the Owner 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 as
otherwise directed by the Owner, the deed or certificate of sale shall be taken
in the name of such Person or Persons (other than the Servicer) as shall be
consistent with an Opinion of Counsel obtained by the Servicer from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Owner shall acknowledge
in writing that such title is being held as nominee for the Owner.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Owner solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Owner.
The Servicer may permit an obligor to pay off a non-performing
Mortgage Loan at less than its unpaid principal balance or chargeoff all or a
portion of such non-performing Mortgage Loan if such discounted payoff or
chargeoff is in accordance with Accepted Servicing Practices and the Servicer
believes that such discounted payoff or chargeoff is in the best interest of the
Owner; provided that in the case of any proposed discounted payoff or proposed
chargeoff, the Servicer shall notify the Owner of the proposed discounted payoff
or chargeoff.
The Servicer shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event within three
years after title has been
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taken to such REO Property, unless (a) a REMIC election has not been made with
respect to the arrangement under which the Mortgage Loans and the REO Property
are held, and (b) the Servicer determines, and gives an appropriate notice to
the Owner to such effect, that a longer period is necessary for the orderly
liquidation of such REO Property. If a period longer than three years is
permitted under the foregoing sentence and is necessary to sell any REO
Property, the Servicer shall report monthly to the Owner as to the progress
being made in selling such REO Property. Notwithstanding anything herein to the
contrary, the Servicer shall not be required to provide financing for the sale
of any REO Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in an amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.
The disposition of REO Property shall be carried out by the Servicer
at such price, and upon such terms and conditions, as the Servicer deems to be
in the best interests of the Owner. With respect to any REO Property, upon a REO
Disposition, the Servicer shall be entitled to retain from REO Disposition
Proceeds a disposition fee equal to $1,500. The proceeds of sale of the REO
Property shall be promptly deposited in the Custodial Account. After the
expenses of such disposition shall have been paid, the Servicer shall submit a
reasonably detailed invoice for reimbursement of Servicing Advances it incurred
thereunder.
The Servicer shall make monthly distributions on each Remittance Date
to the Owner of the net cash flow from the REO Property (which shall equal the
revenues from such REO Property net of the expenses described in this Section
3.10 and of any reserves reasonably required from time to time to be maintained
to satisfy anticipated liabilities for such expenses).
Notwithstanding anything to the contrary contained herein in
connection with a foreclosure, in the event the Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property to be conducted by a qualified
inspector, the Servicer shall cause the Mortgaged Property to be so inspected,
which inspection shall be at the expense of the Owner. Upon completion of the
inspection, the Servicer shall promptly provide the Owner with a written report
of the environmental inspection. After reviewing the environmental inspection
report, the Owner shall determine how the Servicer shall proceed with respect to
the Mortgaged Property.
Section 3.11. Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 4.02, the
Servicer shall, upon the Owner's written request, furnish to the Owner on or
before the Remittance Date each month a statement with respect to any REO
Property covering the operation of such REO Property for the previous month and
the Servicer's efforts in connection with the sale of such REO Property and any
rental of such REO Property incidental to the sale thereof for the previous
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month. The REO Property statement shall be accompanied by such other information
as the Owner shall reasonably request.
The Owner's address for purposes of delivering the REO Property
statement shall be:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
E-mail address: xxxxxxx@xxxxxxxxxxxxxx.xxx
with a copy to:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
E-mail address: xxxxxx@xxxxxxxxxxxxxx.xxx
Section 3.12. Credit Reporting.
The Servicer shall fully furnish, on a monthly basis, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information on the Mortgagor credit files to Equifax, Experian and
Trans Union Credit Information Company on a monthly basis.
ARTICLE IV.
PAYMENTS TO OWNER
Section 4.01. Remittances.
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (i) 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
3.04), plus (ii) all Monthly Advances, if any, which the Servicer is obligated
to make pursuant to Section 4.03, minus (iii) any amounts attributable to
Principal Prepayments, Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds or REO Disposition Proceeds received after the applicable Prepayment
Period, which amounts shall be remitted on the following Remittance Date,
together with any additional interest required to be deposited in the Custodial
Account in connection with such Principal Prepayment in accordance with Section
3.03(vi), and minus (iv) any amounts attributable to Monthly Payments collected
but due on a Due Date or Due Dates subsequent to the first day of the month in
which such Remittance Date occurs, which amounts shall be remitted on the
Remittance Date next succeeding the Due Date related to such Monthly Payment.
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With respect to any remittance received by the Owner after the date on
which such payment was due, the Servicer shall pay to the Owner interest on any
such late payment at an annual rate equal to the Prime Rate, adjusted as of the
date of each change, plus two percentage points, but in no event greater than
the maximum amount permitted by applicable law. Such interest shall be deposited
in the Custodial Account by the Servicer on the date such late payment is made
and shall cover the period commencing with the day following the date on which
such payment was due and ending with the Business Day on which such payment is
made, both inclusive. Such interest shall be remitted along with the
distribution payable on the next succeeding Remittance Date. The payment by the
Servicer of any such interest shall not be deemed an extension of time for
payment or a waiver of any Event of Default by the Servicer.
The Owner's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Flow Servicing Agreement are
as set forth in the related Acknowledgment Agreement.
Section 4.02. Statements to Owner.
Not later than the Remittance Date, the Servicer shall furnish to the
Owner a monthly remittance advice containing loan level information in a
mutually agreeable electronic format containing the data elements indicated on
Exhibit F as to the accompanying remittance and the period ending on the related
Determination Date.
In addition, not more than 60 days after the end of each calendar
year, commencing December 31, 2005, the Servicer shall furnish to each Person
who was an Owner of the Mortgage Loans at any time during such calendar year as
required by applicable law or if not required by applicable law, at the request
of the Owner as to the aggregate of remittances for the applicable portion of
such year.
Such obligation of the Servicer shall be deemed to have been satisfied
to the extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Internal Revenue Code as from time
to time are in force.
Beginning with calendar year 2006, the Servicer shall prepare and file
any and all tax returns, information statements or other filings for the portion
of the tax year 2005 and the portion of subsequent tax years for which the
Servicer has serviced some or all of the Mortgage Loans hereunder as such
returns, information statements or other filings are required to be delivered to
any governmental taxing authority or to the Owner pursuant to any applicable law
with respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Servicer shall provide the Owner with such information concerning
the Mortgage Loans as is necessary for the Owner to prepare its federal income
tax return as the Owner may reasonably request from time to time.
-21-
The Owner's address for purposes of delivering the reports required
pursuant to this section shall be:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
E-mail address: xxxxxxx@xxxxxxxxxxxxxx.xxx
with a copy to:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
E-mail address: xxxxxx@xxxxxxxxxxxxxx.xxx
Section 4.03. Monthly Advances by Servicer.
On the Remittance Date, the Servicer shall deposit in the Custodial
Account from its own funds or from amounts held for future distribution, or
both, an amount equal to the aggregate of all Monthly Advances relating to
Monthly Payments which were due on the Mortgage Loans during the applicable Due
Period and which were delinquent at the close of business on the immediately
preceding Determination Date or which were deferred pursuant to Section 3.01
and/or Section 4.01. Any amounts held for future distribution and so used shall
be replaced by the Servicer by deposit in the Custodial Account on or before any
future Remittance Date if funds in the Custodial Account on such Remittance Date
shall be less than remittances to the Owner required to be made on such
Remittance Date. The Servicer shall keep appropriate records of such amounts.
The Servicer'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 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 unless the Servicer deems such Monthly
Advances to be unrecoverable, as evidenced by an Officer's Certificate of the
Servicer delivered to the Owner. The Servicer shall have no obligations to make
any Monthly Advance which it deems a Nonrecoverable Advance.
ARTICLE V.
GENERAL SERVICING PROCEDURES
Section 5.01. Servicing Compensation.
As consideration for servicing the Mortgage Loans subject to this
Agreement, the Servicer shall retain (a) the relevant Servicing Fee for each
Mortgage Loan remaining subject to
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this Agreement during any month and (b) any Ancillary Income. Such Servicing Fee
shall be payable monthly.
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
With respect to any Mortgage Loans from which the related Liquidation
Proceeds are insufficient to reimburse the Servicer for outstanding Servicing
Advances or Monthly Advances with respect to such loan, the Owner shall
reimburse Servicer for such unreimbursed advances upon the delivery by the
Servicer to the Owner of an invoice with appropriate backup detailing such
unreimbursed amounts.
Section 5.02. Annual Statement as to Compliance.
The Servicer shall deliver to the Owner, on or before March 15 of each
year, beginning March 15, 200_, a Servicing Officer Certificate stating that (i)
a review of the activities of the Servicer during the preceding calendar year
and of the Servicer's performance under this Agreement has been made under such
officer's supervision, and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
Servicing Officer and the nature and status thereof and the action being taken
by the Servicer to cure such default.
Section 5.03. Annual Independent Public Accountants' Servicing Report.
On or before March 15 of each year, beginning March 15, 200__, the
Servicer, at its expense, shall cause a firm of independent public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Owner to the effect that such firm has examined
certain documents and records relating to the servicing of mortgage loans in the
Servicer's portfolio. On the basis of this examination, the CPA firm will
disclose any exceptions or errors relating to the servicing of mortgage loans,
as required by paragraph four (4) of "The Uniform Single Audit Program for
Mortgage Bankers."
Section 5.04. Owner's Right to Examine Servicer Records.
The Owner (and its agents, which shall include but not be limited to
regulators, independent auditors and examiners) shall have the right, at its
expense, upon reasonable notice to the Servicer, during business hours or at
such other times as might be reasonable under applicable circumstances and on
the Servicer's premises, to examine and audit any and all of the books, records
or other information of the Servicer whether held by the Servicer or by another
on behalf of the Servicer, which relate to the performance or observance by the
Servicer of the terms, covenants or conditions of this Agreement, and to discuss
such books, records or other information with an officer or employee of the
Servicer who is knowledgeable about the matters contained therein, upon Owner's
reasonable request.
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ARTICLE VI.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
Section 6.01. Representations, Warranties and Agreements of the
Servicer.
The Servicer, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Owner as of the date hereof:
(a) Due Organization and Authority. The Servicer is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of Delaware and has all licenses, necessary to carry on
its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of such
state require licensing or qualification in order to conduct business of the
type conducted by the Servicer, and in any event the Servicer is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the terms of this Agreement; the Servicer has the full power
and authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have been
duly and validly authorized, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights and to the application of equitable principles in any proceeding, whether
at law or in equity; this Agreement evidences the valid, binding and enforceable
obligation of the Servicer and all requisite action has been taken by the
Servicer to make this Agreement valid and binding upon the Servicer in
accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Servicer;
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will conflict with or result in
a breach of any of the terms, conditions or provisions of the Servicer's
organizational documents or any legal restriction or any agreement or instrument
to which the Servicer is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
the Servicer or its property is subject, or impair the ability of the Servicer
to service the Mortgage Loans, or impair the value of the Mortgage Loans;
(d) Ability to Perform. The Servicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Servicer's knowledge, threatened
against the Servicer
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which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of the right
or ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or which
would draw into question the validity of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or which would be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Servicer of or compliance by the Servicer with
this Agreement, or if required, such consent, approval, authorization or order
shall have been be obtained prior to the date hereof;
(g) Ability to Service. The Servicer is an approved seller/servicer of
conventional residential mortgage loans for Xxxxxx Mae or Xxxxxxx Mac with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The Servicer
is in good standing to service mortgage loans for the Xxxxxx Mae or Xxxxxxx Mac;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading; and
(i) No Commissions to Third Parties. The Servicer has not dealt with
any broker or agent or anyone else who might be entitled to a fee or commission
in connection with this transaction other than the Owner.
Section 6.02. Remedies for Breach of Representations and Warranties of
the Servicer.
It is understood and agreed that the representations and warranties
set forth in Section 6.01 shall survive the engagement of the Servicer to
perform the servicing responsibilities hereunder and the delivery of the
Servicing Files to the Servicer and shall inure to the benefit of the Owner.
Upon discovery by either the Servicer or the Owner of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the ability of the Servicer to perform its duties and obligations under this
Agreement or otherwise materially and adversely affects the value of the
Mortgage Loans, the Mortgaged Property or the priority of the security interest
on such Mortgaged Property or the interest of the Owner, the party discovering
such breach shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
Servicer of any breach of a representation or warranty set forth in Section 6.01
which materially and adversely affects the ability of the Servicer to perform
its duties and obligations under this Agreement or otherwise materially and
adversely affects the value of the Mortgage Loans, the Mortgaged Property or the
priority of the security interest on such Mortgaged Property, the Servicer shall
use
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its Best Efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, the Servicer shall, at the Owner's option, assign
the Servicer's rights and obligations under this Agreement (or respecting the
affected Mortgage Loans) to a successor servicer, subject to the approval of the
Owner, which approval shall be in the Owner's sole discretion. Such assignment
shall be made in accordance with Section 10.01.
In addition, the Servicer shall indemnify the Owner and hold it
harmless against any Costs resulting from any claim, demand, defense or
assertion based on or grounded upon, or resulting from, a breach of the Servicer
representations and warranties contained in this Agreement. It is understood and
agreed that the remedies set forth in this Section 6.02 and in Section 7.01
constitute the sole remedies of the Owner respecting a breach of the foregoing
representations and warranties.
Any cause of action against the Servicer relating to or arising out of
the breach of any representations and warranties made in Section 6.01 shall
accrue upon (i) discovery of such breach by the Servicer or notice thereof by
the Owner to the Servicer, (ii) failure by the Servicer to cure such breach
within the applicable cure period, and (iii) demand upon the Servicer by the
Owner for compliance with this Agreement.
Section 6.03. Representations and Warranties of the Owner.
The Owner, as a condition to the consummation of the transactions
contemplated hereby, makes the following representations and warranties to the
Servicer as of the date hereof:
(a) Due Organization and Authority. The Owner is a business trust duly
organized, validly existing and in good standing under the laws of the state of
Maryland and has all licenses necessary to carry on its business as now being
conducted; the Owner 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 by the Owner and the consummation of
the transactions contemplated hereby have been duly and validly authorized,
subject to the effect of bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights and to the application
of equitable principles in any proceeding, whether at law or in equity; this
Agreement evidences the valid, binding and enforceable obligation of the Owner;
and all requisite corporate action has been taken by the Owner to make this
Agreement valid and binding upon the Owner in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Owner;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the conveyance of the servicing responsibilities to the Servicer or
the transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of the Owner's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Owner is now a party or by which it is bound, or constitute a default or result
in an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment
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or decree to which the Owner or its property is subject, or impair the value of
the servicing contract consummated hereby;
(d) Ability to Perform. The Owner does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the best of the Owner's knowledge, threatened
against the Owner 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 Owner, or in any material impairment of
the right or ability of the Owner to carry on its business substantially as now
conducted, or in any material liability on the part of the Owner, or which would
draw into question the validity of this Agreement or of any action taken or to
be taken in connection with the obligations of the Owner contemplated herein, or
which would be likely to impair materially the ability of the Owner to perform
under the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Owner of or compliance by the Owner with this
Agreement, or if required, such approval has been obtained prior to the date
hereof;
(g) Ownership. As of the related Closing Date, the Owner is the sole
owner and holder of the Mortgage Loans. With respect to each Mortgage Loan
subject to this Agreement, the servicing responsibilities contracted for have
not been assigned or pledged, and, the Owner has good and marketable interest in
the servicing responsibilities, and has full right to transfer the servicing
responsibilities to the Servicer free and clear of any encumbrance, equity,
interest, lien, pledge, charge, claim or security interest, and has full right
and authority subject to no interest, or agreement with, any other party, (other
than any notice required by law, regulation or otherwise, to be delivered to the
Mortgagors) to assign the servicing responsibilities pursuant to this Agreement;
and
(h) No Commissions to Third Parties. The Owner 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 Servicer.
Section 6.04. Remedies for Breach of Representations and Warranties of
the Owner.
It is understood and agreed that the representations and warranties
set forth in Section 6.03 shall survive the engagement of the Servicer to
perform the servicing responsibilities and the delivery of the Servicing Files
to the Servicer and shall inure to the benefit of the Servicer. Upon discovery
by either the Servicer or the Owner of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the servicing contract established herein or the interest of the Servicer,
the party discovering such breach shall give prompt written notice to the other.
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Within 60 days of the earlier of either discovery by or notice to the
Owner of any breach of a representation or warranty set forth in Section 6.03
which materially and adversely affects the value of the servicing contract, the
Owner shall use its Best Efforts promptly to cure such breach in all material
respects.
The Owner shall indemnify the Servicer and hold it harmless against
any Costs resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, (i) a breach of the Owner representations and
warranties contained in this Agreement; (ii) the failure of the Owner to cause
any event to occur which requires its Best Efforts under this Agreement or (iii)
any failure by the Custodian or the Owner to deliver, within the time period and
in the manner set forth in Section 2.04, original mortgage loan documents to the
Servicer upon the Servicer's request. It is understood and agreed that the
obligation of the Owner to indemnify the Servicer pursuant to this Section 6.04
constitutes the sole remedy of the Servicer respecting a breach of the foregoing
representations and warranties.
Any cause of action against the Owner relating to or arising out of
the breach of any representations and warranties made in Section 6.03 shall
accrue upon (i) discovery of such breach by the Owner or notice thereof by the
Servicer to the Owner, (ii) failure by the Owner to cure such breach within the
applicable cure period, and (iii) demand upon the Owner by the Servicer for
compliance with this Agreement.
ARTICLE VII.
INDEMNIFICATION BY THE SERVICER
Section 7.01. Additional Indemnification by the Servicer; Third Party
Claims
The Servicer shall indemnify the Owner and hold it harmless against
any and all Costs that the Owner may sustain in any way related to (i) the
failure of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement or (ii) the failure of the Servicer
to cause any event to occur which requires its Best Efforts under this
Agreement. The Servicer shall immediately notify the Owner if a claim is made by
a third party with respect to this Agreement or the Mortgage Loans, shall assume
(with the prior written consent of the Owner) the defense of any such claim and
pay all expenses in connection therewith, including counsel fees, promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Owner in respect of such claim and follow any written instructions received
from the Owner in connection with such claim. The Owner promptly shall reimburse
the Servicer for all amounts advanced by it pursuant to the preceding sentence
except when the claim is in any way related to the Servicer's indemnification
pursuant to Section 6.02 or the first sentence of this Section 7.01, or the
failure of the Servicer to service and administer the Mortgage Loans in
compliance with the terms of this Agreement. In the event a dispute arises
between the Servicer and the Owner with respect to any of the rights and
obligations of the parties pursuant to this Agreement, and such dispute is
adjudicated in a court of law, by an arbitration panel or any other judicial
process, then the losing party shall indemnify and reimburse the winning party
for all attorney's fees and other costs and expenses related to the adjudication
of said dispute.
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ARTICLE VIII.
THE SERVICER
Section 8.01. Merger or Consolidation of the Servicer.
The Servicer shall keep in full effect its existence, rights and
franchises as a limited liability company, and shall obtain and preserve its
qualification to do business as a foreign entity in each jurisdiction in which
such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any limited liability company or corporation resulting from any merger,
conversion or consolidation to which the Servicer shall be a party, or any
Person succeeding to the business of the Servicer, shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided, however, that the successor or surviving Person shall
be an institution (i) having a net worth of not less than $5,000,000, and (ii)
which is a Xxxxxx Mae or a Xxxxxxx Mac-approved servicer in good standing.
Section 8.02. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or
agents of the Servicer shall be under any liability to the Owner for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment, provided, however, that this
provision shall not protect the Servicer or any such person against any breach
of warranties or representations made herein. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Servicer may, with the consent of the Owner,
undertake any such action which it may deem necessary or desirable in respect of
this Agreement and the rights and duties of the parties hereto. In such event,
the Servicer shall be entitled to reimbursement from the Owner for the
reasonable legal expenses and costs of such action.
Section 8.03. Limitation on Resignation and Assignment by the
Servicer.
The Owner has entered into this Agreement with the Servicer and
subsequent transferees of the Owner will purchase the Mortgage Loans in reliance
upon the independent status of the Servicer, and the representations as to the
adequacy of its servicing facilities, plant, personnel, records and procedures,
its integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Servicer shall not assign this Agreement or the servicing
responsibilities hereunder or delegate its rights or duties hereunder or any
portion hereof without
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the prior written consent of the Owner. Notwithstanding anything set forth
herein, the Servicer may employ vendors and subservicers to carry out its
obligations under this Agreement, provided, that the use by the Servicer of any
such vendors or subservicer shall not release the Servicer from any of its
obligations hereunder and the Servicer shall remain responsible hereunder for
all acts and omissions of such vendors and subservicers as fully as if such acts
and omissions were those of the Servicer. Except as set forth in this Agreement,
the Servicer shall pay all fees and expenses of its third party vendors or
subservicers from its own funds.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 10.01.
ARTICLE IX.
TERMINATION
Section 9.01. Termination for Cause.
(a) This Agreement shall be terminable at the sole option of the
Owner, if any of the following events of default (each, an "Event of Default")
exist on the part of the Servicer:
(i) any failure by the Servicer to remit to the Owner any payment
required to be made under Section 4.01 or other payment required to be made
under the terms of this Agreement which continues unremedied for a period of
three Business Days after the earlier of (1) the date that the Servicer has
actual knowledge of such failure and (2) the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Owner; or
(ii) failure by the Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period of
30 days; or
(iii) failure by the Servicer to maintain its license to do
business or service residential mortgage loans in any jurisdiction where the
Mortgaged Properties are located; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment of debt, including bankruptcy,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered
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against the Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency, bankruptcy or reorganization statute, make an assignment
for the benefit of its creditors, voluntarily suspend payment of its obligations
or cease its normal business operations for three Business Days; or
(vii) the Servicer ceases to meet the qualifications of a Xxxxxx
Xxx seller/servicer; or
(viii) the Servicer fails to maintain a minimum net worth of
$5,000,000.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatever rights the Owner may have at law or
equity to damages, including injunctive relief and specific performance, the
Owner, by notice to the Servicer, may terminate all the rights and obligations
of the Servicer under this Agreement and in and to the servicing contract
established hereby and the proceeds thereof.
Upon receipt by the Servicer of such notice, all authority and power
of the Servicer under this Agreement, whether with respect to the Mortgage Loans
or otherwise, shall pass to and be vested in a successor servicer appointed by
the Owner pursuant to Section 10.01 hereof. Upon written request from the Owner,
the Servicer shall promptly prepare, execute and deliver to the successor entity
designated by the Owner any and all documents and other instruments, place in
such successor's possession all Servicing Files, and do or cause to be done all
other acts or things necessary or appropriate to effect the purposes of such
notice of termination, including but not limited to the transfer and endorsement
or assignment of the Mortgage Loans and related documents, at the Servicer's
sole expense. The Servicer shall cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
By a notice, the Owner may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences. Upon any waiver
of a past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
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With respect to any termination pursuant to this Section 9.01, the
Owner shall reimburse the Servicer on the related transfer date for all
previously unreimbursed Servicing Fees, Servicing Advances and Monthly Advances
made by Servicer under this Agreement and other reasonable expenses of the
Servicer, including those fees, advances and expenses incurred by the Servicer
but not yet billed as of the related transfer date.
Section 9.02. Termination Without Cause.
This Agreement shall terminate upon: (i) the later of (a) the
distribution of the final payment or liquidation proceeds on the last Mortgage
Loan to the Owner (or advances by the Servicer for the same), and (b) the
disposition of all REO Property acquired upon foreclosure of the last Mortgage
Loan and the remittance of all funds due hereunder, or (ii) mutual consent of
the Servicer and the Owner in writing or (iii) upon sixty days notice from the
Owner. The Owner and the Servicer shall comply with the termination procedures
set forth in Sections 9.01, 9.02 and 10.01 hereof. In the event that Servicer is
terminated as servicer pursuant Subsection 9.02(b)(iii) above, the Owner shall
pay a termination fee to the Servicing Rights Owner equal to six (6) times the
applicable Servicing Fee Rate of the unpaid principal balance of the Mortgage
Loans then being serviced pursuant to this Agreement.
Notwithstanding and in addition to the foregoing, the Servicing Rights
Owner shall have the right to terminate the Servicer's rights and obligations as
servicer under this Agreement on sixty days notice and upon appointment of a
successor servicer reasonably acceptable to the Owner. With respect to a
termination pursuant to the previous sentence the Servicer shall not be entitled
to a termination fee.
With respect to any termination pursuant to this Section 9.02, the
Owner shall reimburse the Servicer on the related transfer date for all
previously unreimbursed Servicing Fees, Servicing Advances and Monthly Advances
made by Servicer under this Agreement and other reasonable expenses of the
Servicer, including those fees, advances and expenses incurred by the Servicer
but not yet billed as of the related transfer date.
Notwithstanding and in addition to the foregoing, in the event a
Mortgage Loan is repurchased by the original owner, such Mortgage Loan shall
cease to be subject to the terms and conditions of this Agreement.
ARTICLE X.
MISCELLANEOUS PROVISIONS
Section 10.01. Successor to the Servicer.
Simultaneously with the termination of the Servicer's responsibilities
and duties under this Agreement pursuant to Sections 6.02, 8.03, 9.01 or 9.02,
the Owner shall appoint a successor servicer which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such
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appointment and assumption, the Owner 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 Servicer's duties, responsibilities
and liabilities under this Agreement should be terminated pursuant to the
aforementioned sections, the Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof with the same degree of diligence
and prudence which it is obligated to exercise under this Agreement, and shall
take no action whatsoever that might impair or prejudice the rights or financial
condition of its successor or the value of the Mortgage Loans or any other
assets or accounts related thereto. The resignation or removal of the Servicer
pursuant to the aforementioned sections shall not become effective until a
successor shall be appointed pursuant to this Section 10.01 and shall in no
event relieve the Servicer or the Owner of the representations and warranties
made pursuant to Sections 6.01 and 6.03, respectively, and the remedies
available to the Owner and the Servicer under Sections 6.02 and 6.04,
respectively, it being understood and agreed that the provisions of such
Sections 6.01, 6.02, 6.03 and 6.04 shall be applicable to the Servicer and the
Owner, as applicable, notwithstanding any such resignation or termination of the
Servicer, or the termination of this Agreement.
Within a reasonable period of time, but in no event longer than 30
days of the appointment of a successor entity by the Owner, the Servicer shall
prepare, execute and deliver to the successor entity any and all documents and
other instruments, place in such successor's possession all Servicing Files, and
do or cause to be done all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, including but not limited to
the transfer and endorsement of the Mortgage Notes and related documents, and
the preparation and recordation of Assignments of Mortgage, at the discretion of
the Owner and, at the Owner's sole expense. The Servicer shall cooperate with
the Owner and such successor in effecting the termination of the Servicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor servicer, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Servicer to the Custodial Account or Escrow
Account or thereafter received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Owner an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Servicer or termination of this Agreement
pursuant to Sections 6.02, 8.03, 9.01 or 9.02 shall not affect any claims that
the Owner may have against the Servicer arising out of the Servicer's actions or
failure to act prior to any such termination or resignation.
The Servicer shall deliver promptly to the successor servicer the
funds in the Custodial Account and Escrow Account and all Mortgage Loan
documents and related documents and statements held by it hereunder and the
Servicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer. At the time that
Servicer delivers the
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Mortgage Loan documents, Servicing Files, records and funds in the Custodial
Account and Escrow Account to the successor servicer, the Servicer will be
entitled to reimbursement of all unreimbursed Servicing Advances made by the
Servicer with respect to the Mortgage Loans including those fees, advances and
expenses incurred by the Servicer but not yet billed as of the related Transfer
Date.
Notwithstanding anything to the contrary set forth herein, the Owner
or any successor servicer appointed by the Owner upon the termination or
resignation of the Servicer shall succeed to and assume the responsibilities,
rights, duties and obligations under this Agreement on a going forward basis,
and the Servicer shall remain liable for all of its responsibilities and
obligations under this Agreement arising prior to such termination or
resignation.
Section 10.02. Closing.
At the Owner's option, each closing for the engagement of the Servicer
with respect to a Mortgage Loan Package as herein provided shall be either: by
telephone, by facsimile, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
Each closing with respect to a Mortgage Loan Package shall be subject
to each of the following conditions:
(a) all of the representations and warranties of the Servicer and the
Owner 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;
(b) the Owner and Servicer each shall have received, all closing
documents as specified in Section 10.03 hereof, in such forms as are agreed upon
and acceptable to the Servicer and the Owner, duly executed by all signatories
as required pursuant to the respective terms thereof; and
(c) all other terms and conditions of this Agreement shall have been
complied with.
Section 10.03. Closing Documents.
The closing documents for the initial closing shall consist of fully
executed originals of the following documents:
(a) this Agreement;
(b) a Custodial Account Letter Agreement in the form of Exhibit C
hereto; and
(c) an Escrow Account Letter Agreement in the form of Exhibit D
hereto.
-34-
The closing documents for each closing, including the initial closing,
shall consist of a fully executed original of an Acknowledgment Agreement.
Section 10.04. Costs.
The Owner shall pay any commissions due its salesmen and the legal
fees and expenses of its attorneys.
Section 10.05. Notices.
All demands, notices, requests and communications hereunder shall be
in writing and shall be deemed to have been duly given if sent by facsimile,
electronic transmission or mailed by overnight courier, addressed as follows (or
such other address as may hereafter be furnished to the other party by like
notice):
(i) if to the Owner:
Taberna Realty Holdings Trust
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
E-mail address: xxxxxxx@xxxxxxxxxxxxxx.xxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
with a copy to:
Taberna Realty Holdings Trust
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
E-mail address: xxxxxx@xxxxxxxxxxxxxx.xxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(ii) if to the Servicer:
Aurora Loan Services LLC
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: E. Xxxx Xxxxxxxxxx
Mail Stop -- 3195
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
-35-
with a copy to:
Aurora Loan Services LLC
000 Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Manager, Loan Administration
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
(iii) if to the Servicing Rights Owner:
Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings Inc.
000 Xxxxxxx Xxxxxx
0x Xxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Manager, Contract Finance
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Any such demand, notice or communication hereunder shall be deemed to have been
received on the date delivered to or received at the premises of the addressee.
Section 10.06. Severability Clause.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
Section 10.07. No Personal Solicitation.
The Servicer hereby agrees that it will not take any action or permit
or cause any action to be taken by any of its agents or affiliates, or by any
independent contractors on the Servicer's behalf, to personally, by telephone or
mail, solicit the borrower or obligor under any Mortgage Loan (on a targeted
basis) for any purposes of prepayment, refinancing or modification
-36-
of the related Mortgage Loan, provided, however, that this limitation shall not
prohibit the Servicer from soliciting such Mortgagor for purposes of prepayment,
refinance or modification of any loan owned or serviced by the Servicer other
than a Mortgage Loan. Notwithstanding the foregoing, it is understood and agreed
that, among other marketing activities, promotions and solicitations undertaken
by the Servicer which are directed of the general public at large or which are
directed generally to a segment of the then existing customers of the Servicer
or any of its affiliates (including, without limitation, the mailing of
promotional materials to the Servicer's or its affiliates' deposit customers by
inserting such materials into customer account statements, mass mailings based
on commercially acquired mailing lists and newspaper, radio and television
advertisements and solicitations made on the basis of information acquired by
the Servicer or its affiliates that indicates that a borrower may be planning to
refinance) shall not constitute solicitation under this section.
Section 10.08. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
Section 10.09. Place of Delivery and Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Owner in the State of New York and shall
be deemed to have been made in the State of New York. The 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 the laws of the State of New York, except to the extent
preempted by Federal law.
Section 10.10. Further Agreements.
The Owner and the Servicer each agree to execute and deliver to the
other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Section 10.11. Successors and Assigns; Assignment of Flow Servicing
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Servicer and the Owner and the respective successors and
assigns of the Servicer and the Owner; provided that, the Owner may not assign
its rights hereunder to more than 2 Persons and each such Person must execute
and deliver an Assignment and Assumption Agreement in the form of Exhibit B
hereto. This Agreement shall not be assigned, pledged or hypothecated by the
Servicer to a third party without the prior written consent of the Owner, which
consent shall be given at the sole discretion of the Owner.
Notwithstanding any limitations on the assignment of this Agreement,
the Servicing Rights Owner may assign the Servicing Rights on written notice to
the Owner.
-37-
Section 10.12. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
Section 10.13. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 10.14. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean by reason of
enumeration.
Section 10.15. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any
-38-
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 10.16. Reconstitution
The Servicer hereby agrees and acknowledges that the Owner may
securitize or otherwise transfer some or all of the Mortgage Loans (each, a
"Transfer"), and the Servicer shall consent thereto; provided that the Servicer
shall not consent to more than two Transfers. Each Transfer may entail the Owner
assigning its rights under this Agreement to a securitization trust or other
entity, and may require the Servicer to enter into a reconstituted Flow
Servicing Agreement (a "Reconstitution Agreement") acceptable to the Servicer,
with terms and provisions which are no more onerous to the Servicer than those
set forth in a typical securitization transaction of mortgage loans similar to
the Mortgage Loans. The Servicer and the Owner shall each use reasonable efforts
to mutually determine whether a particular Reconstitution Agreement has terms
and provisions that are more onerous to the Servicer than those set forth in a
typical securitization transaction of mortgage loans similar to the Mortgage
Loans; provided, that, the Servicer and the Owner agree that any Reconstitution
Agreement with provisions that are substantially similar to an Existing
Reconstitution Agreement (as defined below) shall automatically be deemed not to
contain more onerous terms and provisions. For the purposes of this Section
10.16, "Existing Reconstitution Agreement" shall mean any servicing agreement
dated on or before the date of this Agreement pursuant to which Aurora services
mortgage loans similar to the Mortgage Loans for any of Xxxxxx Brothers, Xxxxxxx
Xxxxx or Bayview and any of their respective affiliates. If the Servicer and the
Owner agree that such provisions are more onerous, the Servicer and the Owner
agree to (i) if a servicing fee increase will adequately compensate the Servicer
for complying with such more onerous provisions, negotiate in good faith to
increase the servicing fee due to the Servicer under the related Reconstitution
Agreement to a mutually agreeable amount (which amount in any event shall be
greater than the Servicing Fee) or (ii) if a servicing fee increase will not
adequately compensate the Servicer for complying with such more onerous
provisions, this Agreement shall terminate with respect to those loans being
reconstituted and the Servicer shall be entitled to the termination fee set
forth in Section 9.02. If the Servicer and the Owner agree that such provisions
are not more onerous, and, notwithstanding such agreement, the Servicer refuses
to enter into the related Reconstitution Agreement, this agreement shall
terminate with respect to those loans being reconstituted and the Servicer shall
not be entitled to any termination fee. All Mortgage Loans subject to any
Transfer will continue to be subject to the terms of this Agreement, as modified
by the related Reconstitution Agreement. The Owner, in its sole discretion, may
appoint a master servicer (a "Master Servicer") in connection with any Transfer.
The Servicer hereby agree to remit to and report to the Master Servicer, if so
directed pursuant to a Reconstitution Agreement. If a Master Servicer has been
appointed, the Master Servicer shall become the designee of the Owner under the
Reconstitution Agreement and may enforce the Servicer's representations,
covenants and warranties set forth in this Agreement.
(i) For so long as a certificate under the Xxxxxxxx-Xxxxx Act of
2003, as amended, ("Xxxxxxxx-Xxxxx") is required to be given on behalf of the
trust fund pursuant to any Transfer, no later than March 15th of each year (or
if not a Business Day, the immediately succeeding Business Day) and the related
Transfer, and upon thirty (30) days written request of
-39-
the party required to provide a certification directly to the Securities and
Exchange Commission pursuant to Xxxxxxxx-Xxxxx (the "Sarbanes Certifying
Party"), an officer of the Servicer shall execute and deliver to such Sarbanes
Certifying Party an officer's certificate which is substantially in the form
attached as Exhibit E hereto, or otherwise in accordance with any law. Rule or
regulation as the same may be applicable from time to time.
Section 10.17. Confidentiality
The Servicer shall keep confidential and shall not divulge to any
party, without the Owner's prior written consent, the price paid by the Owner
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Servicer to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
Section 10.18. Safeguarding Customer Information
The Owner and the Servicer agree they (i) shall comply with all
applicable laws and regulations regarding the privacy or security of Customer
Information, (ii) shall not collect, create, use, store, access, disclose or
otherwise handle Customer Information in any manner inconsistent with any
applicable laws or regulations regarding the privacy or security of Customer
Information, (iii) shall not disclose Customer Information to any affiliated or
non-affiliated third party except to enforce or preserve its rights or to offer
Mortgagors various non-mortgage products offered to various customers of the
Servicer, as otherwise permitted or required by applicable law (or by regulatory
authorities having jurisdiction in the premises) or, in the case of the
Servicer, at the specific written direction of the Owner, (iv) shall maintain
appropriate administrative, technical and physical safeguards to protect the
security, confidentiality and integrity of customer information, including
security measures designed to meet the objectives of the Interagency Guidelines
Establishing Information Security Standards, published in final form on December
28, 2004, 69 Fed. Reg. 77610, as amended from time to time and (v) shall
promptly notify the other party in writing upon becoming aware of any actual
breach and of any suspected breach of this section. The Servicer shall promptly
provide the Owner's regulators information regarding such security measures upon
the reasonable written request of the Owner. Each party shall indemnify and
defend the other party against, and shall hold the other party harmless from,
any cost, expense, loss, claim or other liability that such other party may
suffer as a result of or in connection with its failure to comply with or
perform the obligations set forth in this section. The restrictions set forth
herein shall survive the termination of this Agreement.
[SIGNATURES APPEAR ON NEXT PAGE]
-40-
IN WITNESS WHEREOF, the Servicer, the Servicing Rights Owner and the
Owner have caused their names to be signed hereto by their respective officers
thereunto duly authorized as of the date first above written.
TABERNA REALTY HOLDINGS TRUST
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
AURORA LOAN SERVICES LLC
(Servicer)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC.
(Servicing Rights Owner)
By:
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Authorized Signatory
-41-
EXHIBIT A
ACKNOWLEDGMENT AGREEMENT
On this ____ day of ____________, 200_, Taberna Realty Holdings Trust,
(the "Owner") as owner under that certain Flow Servicing Agreement dated as of
September 30, 2005, (the "Agreement"), and Xxxxxx Capital, A Division of Xxxxxx
Brothers Holdings Inc. (the "Servicing Rights Owner"), as servicing rights owner
under the Agreement, do hereby contract with Aurora Loan Services LLC (the
"Servicer") as servicer under the Agreement, for the servicing responsibilities
related to the Mortgage Loans listed on the Mortgage Loan Schedule attached as
Annex 1 hereto. The Servicer hereby accepts the servicing responsibilities
transferred hereby and on the date hereof assumes all servicing responsibilities
related to the Mortgage Loans identified on the attached Mortgage Loan Schedule
all in accordance with the Agreement. The contents of each Servicing File
required to be delivered to service the Mortgage Loans pursuant to the Agreement
have been or shall be delivered to the Servicer by the Owner in accordance with
the terms of the Agreement.
With respect to the Mortgage Loans made subject to the Agreement
hereby:
(a) the Closing Date shall be ___________________;
(b) the Servicing Fee Rate shall be _______________;
(c) the Custodian shall be ___________________ and the address of the
Custodian is _________; and
(d) the wire transfer instructions for purposes of all remittances and
payments related to the Mortgage Loans and the Servicing Agreement are
_______________________________________________________________.
All other terms and conditions of this transaction shall be governed
by the Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
This Acknowledgment Agreement may be executed simultaneously in any
number of counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
A-1
IN WITNESS WHEREOF, the Owner, the Servicing Rights Owner and the
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
TABERNA REALTY HOLDINGS TRUST
(Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
AURORA LOAN SERVICES LLC (Servicer)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXX CAPITAL, A DIVISION OF XXXXXX
BROTHERS HOLDINGS INC.
(Servicing Rights Owner)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
X-0
XXXXX 0
XXXXXXXX XXXX XXXXXXXX
[Intentionally Omitted]
EXHIBIT B
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION, dated _________ __, 200__, between
___________________________ having an office at ____________________________
("Assignor") and _____________, having an office at
______________________________ ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all
of the right, title and interest of Assignor, as owner, in, to and under that
certain Flow Servicing Agreement, Residential Fixed [and Adjustable] Rate
Mortgage Loans, Group No. 2005-FLOW (the "Flow Servicing Agreement"), dated as
of September 30, 2005, by and between the Assignor, and Aurora Loan Services LLC
(the "Servicer") and Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., as servicing rights owner.
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Servicer with
respect to the Flow Servicing Agreement;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Flow Servicing Agreement,
including without limitation the transfer of the servicing obligations under the
Flow Servicing Agreement; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans or the
Flow Servicing Agreement, any interest in the Mortgage Loans, the Flow Servicing
Agreement or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans, the Flow Servicing Agreement or any other
similar security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, the Flow Servicing Agreement, any interest in the 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 of 1933 (the "33 Act") or which would render the
disposition of the Mortgage Loans a violation of Section 5 of the 33 Act or
require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Servicer that:
B-1
a. The Assignee agrees to be bound, as "Owner", by all of the terms,
covenants and conditions of the Flow Servicing Agreement, and from and after the
date hereof, the Assignee assumes for the benefit of each of the Servicer and
the Assignor all of the Assignor's obligations as "Owner" thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage
Loans are in excess of $250,000 and will be paid by cash remittance of the full
purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for its
own account only and not for any other person. In this connection, neither the
Assignee nor any Person authorized to act therefor has offered the Mortgage
Loans by means of any general advertising or general solicitation within the
meaning of Rule 502(c) of U.S. Securities and Exchange Commission Regulation D,
promulgated under the 33 Act;
e. The Assignee 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;
f. The Assignee has been furnished with all information regarding the
Mortgage Loans, the Flow Servicing Agreement that it has requested from the
Assignor or the Servicer;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the 33 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 33 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
h. Either: (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result
in a prohibited transaction under section 406 of ERISA or section 4975 of the
Code.
B-2
(i) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Flow Servicing Agreement
is:
______________________________
______________________________
E-mail address: ______________
Attention: ___________________
The Custodian's address for purposes of all notices and correspondence
related to the Mortgage Loans is:
______________________________
______________________________
E-mail address: ______________
Attention: ___________________
The Assignee's address for purposes of all remittance reports is:
______________________________
______________________________
E-mail address: ______________
Attention: ___________________
The Assignee's address for purposes of all REO Property reports is:
______________________________
______________________________
E-mail address: ______________
Attention: ___________________
The Assignee's address for purposes of all foreclosure and chargeoff
consent requests is:
______________________________
______________________________
E-mail address: ______________
Attention: ___________________
The Assignee's wire transfer instructions for purposes of all
remittances and payments related to the Mortgage Loans and the Flow Servicing
Agreement are:
______________________________
______________________________
______________________________
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
B-3
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption to be executed by their duly authorized officers as of the date first
above written.
------------------------------------- ----------------------------------------
Assignor Assignee
By: By:
--------------------------------- ------------------------------------
Its: Its:
-------------------------------- -----------------------------------
B-4
EXHIBIT C
CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 200_
Aurora Loan Services LLC hereby certifies that it has established the account
described below as a Custodial Account pursuant to Section 3.03 of the Flow
Servicing Agreement, dated as of September 30, 2005, Residential Fixed [and
Adjustable] Rate Mortgage Loans, Group No. 2005-FLOW.
Title of Account: Aurora Loan Services LLC in trust for the Owner of Residential
Mortgage Loans, Group No. 2005-FLOW.
Account Number: _______________
Address of office or branch of the firm at which Account is maintained:
_____________________________________________________
_____________________________________________________
_____________________________________________________
AURORA LOAN SERVICES LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
C-1
EXHIBIT D
ESCROW ACCOUNT LETTER AGREEMENT
_______ ___, 200_
Aurora Loan Services LLC hereby certifies that it has established the account
described below as a Escrow Account pursuant to Section 3.05 of the Flow
Servicing Agreement, dated as of September 30, 2005, Residential Mortgage Loans,
Group No. [200_FLOW].
Title of Account: Aurora Loan Services LLC in trust for the Owner of Residential
Mortgage Loans, Group No. 2005-FLOW, and various Mortgagors.
Account Number: _______________
Address of office or branch of the firm at which Account is maintained:
_____________________________________________________
_____________________________________________________
_____________________________________________________
AURORA LOAN SERVICES LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
D-1
EXHIBIT E
ANNUAL CERTIFICATION
[SARBANES CERTIFYING PARTY]
[ADDRESS]
Reference is made to the [________] dated as of __________ (the
"Agreement"), by and between Aurora Loan Services LLC, as servicer (the
"Servicer"), and [___________], as [_______] (the "[_____]"). I, [identify the
certifying individual], a [TITLE] of the Servicer, hereby certify to [PARTY
PROVIDING CERTIFICATION TO SEC] ("Certifying Party") and its respective
officers, directors and affiliates, and with the knowledge and intent that it
will rely upon this certification, that:
1. I have reviewed the information required to be delivered to the
Certifying Party pursuant to the Agreement (the "Servicing Information");
2. Based on my knowledge, the Servicing Information has been provided
to the Certifying Party when and as required under the Agreement;
3. Based on my knowledge, the Servicing Information does not contain
any material untrue information or omit to state information necessary to make
the Servicing Information, in light of the circumstances under which such
information was provided, not misleading as of the date of this certification;
and
4. I am responsible for reviewing the activities performed by the
Servicer under the Agreement, and based upon my knowledge and the review
required under the Agreement, and except as disclosed in writing to you on or
prior to the date of this certification either in the accountants' report
required under the Agreement or in disclosure a copy of which is attached
hereto, the Servicer has, as of the date of this certification, fulfilled its
obligations under the Agreement.
AURORA LOAN SERVICES LLC
By:
------------------------------------
Name
-----------------------------------
Title
----------------------------------
Date:
----------------------------------
E-1
EXHIBIT F
MONTHLY REMITTANCE DATA ELEMENTS
Loan Number
Investor Number
Category
Investor Loan Number
Interest Rate
Due Date
Beginning Principal Balance
Remittance
ARM
Beginning Scheduled Principal Balance
Scheduled Principal
Servicing Fee Rate
NET Interest Rate
P&I constant
Net Scheduled Interest
Ending Principal Balance
Principal Collected
Interest Collected
Servicing Fee Collected
Buydown
F-1
